Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply: (A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates; (B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained; (C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; (D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located; (E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and (F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance. (b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy. (c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance. (d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2011-C5), Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2011-C5)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Serviced Mortgage LoanLoan or Serviced Loan Combination, the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Serviced Mortgage Loan and or Serviced Loan Combination or (ii) the outstanding principal balance of such Serviced Mortgage LoanLoan or Serviced Loan Combination, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or (subject to the Servicing Standard) that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Serviced Mortgage Loan or Serviced Loan Combination unless such insurance policy was in effect at the time of the origination of such Serviced Mortgage Loan or Serviced Loan Combination pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable ratesrates and the Trustee has an insurable interest;
(B) if and to the extent that any Serviced Mortgage Loan or Serviced Loan Combination grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Serviced Mortgage Loan or Serviced Loan Combination to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower under any Serviced Mortgage Loan or Serviced Loan Combination to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower under any Serviced Mortgage Loan or Serviced Loan Combination to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower under any Serviced Mortgage Loan or Serviced Loan Combination does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower under any Serviced Mortgage Loan or Serviced Loan Combination fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (A) with respect to the Mortgage Loans other than the St. ▇▇▇▇▇ Town Center Loan Combination (during any Subordinate Control Period), with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) having consulted with the Subordinate Class Representative, (B) with respect to the St. ▇▇▇▇▇ Town Center Loan Combination prior to the occurrence and continuance of a Class SJ Control Appraisal Period with respect to the senior-most Class of Control-Eligible Loan-Specific Certificates, with the consent of the Loan-Specific Subordinate Class Representative, or (C) with respect to the St. ▇▇▇▇▇ Town Center Loan Combination after the occurrence and during the continuance of a Class SJ Control Appraisal Period with respect to the senior-most Class of Control-Eligible Loan-Specific Certificates (during any Subordinate Control Period), with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative or Loan-Specific Subordinate Class Representative, as applicable, and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, provided that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or the Loan-Specific Subordinate Class Representative, as applicable, or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder Certificateholder, or, if the St. ▇▇▇▇▇ Town Center Loan Combination is involved, prior to the occurrence and continuance of a Class SJ Control Appraisal Period in respect of the senior-most Class of Control-Eligible Loan-Specific Certificates, the Loan-Specific Subordinate Class Representative, and, if a Serviced Loan Combination is involved, the related Serviced Pari Passu Companion Loan Holder(s), if the Master Servicer determines that any Borrower under a Serviced Mortgage Loan or Serviced Loan Combination has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower under a Serviced Mortgage Loan or Serviced Loan Combination has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan or Serviced Loan Combination and/or the interest of the Trust or the Serviced Pari Passu Companion Loan Holders in the related Mortgaged Property. .
(b) Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each Administered REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such Administered REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million 1,000,000 per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months (or at least eighteen (18) months, in the case of an Administered REO Property whose related REO Mortgage Loan had an initial principal balance exceeding $35,000,000), in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, provided that both of the following conditions and/or limitations shall apply:
(A) the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what above unless the Trustee has an insurable interest; and
(B) the Special Servicer shall not be required to maintain or obtain the insurance coverage otherwise described above to the extent that the coverage is not available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer (or the applicable sub-servicer) on behalf of the Trustee, in the case of insurance maintained in respect of a Serviced Mortgage LoanLoan or Serviced Loan Combination, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an Administered REO Property. 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account (or, to the extent the loss affects a Serviced Pari Passu Companion Loan Holder or the Holders of the Loan-Specific Certificates, in the Serviced Pari Passu Companion Loan Custodial Account or the Trust Subordinate Companion Loan Custodial Account, as applicable), in each case as appropriate in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Serviced Mortgage LoanLoan or Serviced Loan Combination, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage LoanLoan or Serviced Loan Combination, notwithstanding that the terms of such Serviced Mortgage Loan or Serviced Loan Combination so permit; provided, however, provided that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust (and, if applicable, any related Serviced Pari Passu Companion Loan Holders) to enforce any obligations of the related Borrower under such Serviced Mortgage LoanLoan or Serviced Loan Combination. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bc) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the any Serviced Mortgage Loans Loans, Serviced Loan Combination or Administered REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or the Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2A-” by Fitch (or, if not rated by Fitch, an equivalent rating by (A) at least two NRSROs (which may include KBRA and/or ▇▇▇▇▇’▇) or (B) one NRSRO (which may include KBRA and/or ▇▇▇▇▇’▇) and A.M. Best Company), “A3” by ▇▇▇▇▇’▇ and (or, if not rated by ▇▇▇▇▇’▇, at least “AA-” by Fitch S&P (or, if not rated by S&P, an equivalent rating by (A) at least two NRSROs (which may include KBRA and/or Fitch) or (B) one NRSRO (which may include KBRA and/or Fitch) and A.M. Best Company)) and an equivalent rating by KBRA (if then rated by KBRA), or it has received a Rating Agency Confirmation from each Rating Agency with respect to which such rating is not satisfied, and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Serviced Mortgage Loan, Serviced Loan Combination or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaSect
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2014-C25), Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2014-C24)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the Master The Servicer shall use its reasonable best efforts consistent with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to by the terms of the related Mortgage Note, or if the Mortgagor does not so maintain, shall itself maintain, for each Mortgage Loan Documents all Insurance Policy coverage as is required under the related Mortgage (to the extent that the Trustee has an insurable interest and such Insurance Policy coverage is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon if any Mortgage permits the Special Servicer’s determinationholder thereof to dictate to the Mortgagor the Insurance Policy coverage to be maintained on such Mortgaged Property, the Servicer shall impose such insurance requirements as are consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyStandards. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with maintain for each REO Property no less Insurance Policy coverage than was previously required of the Servicing Standard, to maintain with Qualified Insurers having Mortgagor under the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of related Mortgage Loan. All such Insurance Policies shall (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) contain a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage LoanLoans other than REO Properties), or shall (ii) be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, (iii) include coverage in an amount not less than the lesser of the full replacement cost of the REO PropertyProperty or the outstanding principal balance owing on the related REO Loan, (iv) include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents) and (v) be issued by a Qualified Insurer authorized under applicable law to issue such Insurance Policies. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies Insurance Policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing StandardStandards and the provisions of the related Mortgage Loan) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c3.05(a), in the case of amounts received in respect of an REO Property. Any cost costs incurred by the Master Servicer or Special Servicer in maintaining any such insurance Insurance Policies in respect of Mortgage Loans (other than REO Properties)
(i) if the Mortgagor defaults on its obligation to do so, shall be advanced by the Servicer as a Servicing Advance and will be charged to the related Mortgagor and (ii) shall not, for purposes hereofthereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit . Any cost incurred by the rights of the Master Servicer or Special Servicer on behalf in maintaining any such Insurance Policies with respect to REO Properties shall be an expense of the Trust to enforce any obligations payable out of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies REO Account pursuant to this Section 3.07 shall (subject to Section 3.11(h3.16(c) and Section 3.19(b)) be paid byor, and reimbursable toif the amount on deposit therein is insufficient therefor, advanced by the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy Insurance Policy with a Qualified Insurer insuring against fire and hazard losses on all of the Mortgage Loans or REO Properties, as applicablethe case may be, required to be serviced and administered hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) Insurance Policy provides protection equivalent to the individual policies otherwise required herein and in required, the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause fire and hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy Insurance Policy may contain a deductible clause (not in excess of a customary amount)clause, in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, Servicer shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a fire and hazard insurance policy Insurance Policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyInsurance Policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with of such loss or losses that would have been covered under the individual policy but are not covered under the blanket Insurance Policy because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (orLoan, or in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master In connection with its activities as administrator and servicer of the Mortgage Loans, the Servicer and the Special Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it Insurance Policy in a timely fashion in accordance with the terms of such policy. The Special Servicer, to the extent consistent with the Servicing Standards, may maintain, at its own expense, earthquake insurance on REO Properties, provided coverage is available at commercially reasonable rates.
(ii) If the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by a master single interest insurance policy with a Qualified Insurer naming the Servicer or the Special Servicer on behalf of the Trustee as the loss payee, then to the extent such Insurance Policy provides protection equivalent to the individual policies otherwise required, the Servicer or the Special Servicer shall conclusively be deemed to have satisfied its obligation to cause such insurance to be maintained on the related Mortgage Properties and REO Properties. In the event the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by such master single interest insurance policy, the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) shall be paid by the Servicer as a Servicing Advance. Such master single interest policy may contain a deductible clause, in which case the Servicer or the Special Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such policy had it been maintained, deposit into the Certificate Account from its own funds the amount not otherwise payable under the master single interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing Standard.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master term of this Agreement a blanket fidelity bond and an errors and omissions Insurance Policy with a Qualified Insurer covering the Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard 's and the terms Special Servicer's, as applicable, officers and conditions employees and other persons acting on behalf of such Environmental Insurance Policy to make a claim thereunder the Servicer and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim its activities under an Environmental Insurance Policy described above this Agreement with a deductible clause that in no event exceeds the greater of (whether by i) $100,000 or (ii) 5% of the Master face amount of the Fidelity Bond or errors and omission policy as the case may be. The Servicer or the Special Servicer, as applicable, shall cause the Trustee, on behalf of the Trust, to be named as a loss payee on each such fidelity bond and errors and omissions policy. Notwithstanding the foregoing, so long as the long term debt or the deposit obligations or claims-paying ability of the Servicer (or its immediate or remote parent) is rated at least "A" by ___ and "A" by ___ (if rated by ___), the Servicer shall be allowed to provide self-insurance with respect to a fidelity bond. The amount of coverage shall be at least equal to the coverage that would be required by FNMA or FHLMC, whichever is greater, with respect to the Servicer or the Special Servicer if the Servicer or the Special Servicer, as applicable, were servicing and administering the Mortgage Loans or Specially Serviced Mortgage Loans, as applicable, for FNMA or FHLMC. Coverage of the Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of the Servicer or the Special Servicer and providing the coverage required by this Section 3.07(c) shall be (subject satisfy the requirements of this Section 3.07(c). The Special Servicer and the Servicer will promptly report in writing to Section 3.11(h) the Trustee any material changes that may occur in their respective fidelity bonds, if any, and/or their respective errors and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Serviceromissions Insurance Policies, as the case may be, and will furnish to the Trustee copies of all binders and policies or certificates evidencing that such bonds, if any, and insurance policies are in full force and effect.
(d) During all such times as any Mortgaged Property shall be in a federally designated special flood hazard area (and such flood insurance has been made available), the Servicer will use its reasonable best efforts to cause the related Mortgagor (in accordance with applicable law and the terms of the Mortgage Loan documents) to maintain, and, if the related Mortgagor shall default in its obligation to so maintain, shall itself maintain to the extent available at commercially reasonable rates (as determined by the Servicer in accordance with the Servicing Standards), flood insurance in respect thereof, but only to the extent the related Mortgage Loan permits the mortgagee to require such coverage and the maintenance of such coverage is consistent with the Servicing Standards. 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 insurance which is available under the Flood Disaster Protection Act of 1973, as amended. If the cost of any insurance described above is not borne by the Mortgagor, the Servicer shall promptly make a Servicing Advance for such costs, subject to Section 3.03(c).
(e) During all such times as any REO Property shall be located in a federally designated special flood hazard area, the Special Servicer will cause to be maintained, to the extent available at commercially reasonable rates (as determined by the Special Servicer in accordance with the Servicing Standards), a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration in an amount representing coverage not less than the maximum amount of insurance which is available under the Flood Disaster Protection Act of 1973, as amended. The cost of any such flood insurance with respect to an REO Property shall be an expense of the Trust payable out of the related REO Account pursuant to Section 3.16(c) or, if the amount on deposit therein is insufficient therefor, paid by the Servicer as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (Chase Commercial Mortgage Securities Corp), Pooling and Servicing Agreement (Jp Morgan Chase Commercial Mortgage Securities Corp)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Master Servicer, with respect to each of the case of each Mortgage LoanLoans, including Specially Serviced Mortgaged Loans, and the Master Servicer Special Servicer, with respect to REO Properties, shall use reasonable efforts efforts, consistent with the Servicing Standard Standard, to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to by the terms of the related Mortgage Loan Documents and documents, or if the Mortgagor does not maintain, shall itself maintain for each Mortgaged Property all insurance coverage as is available at commercially reasonable rates;
(B) required under the related Mortgage; provided that if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not exercise such discretion in a manner consistent with the Servicing Standard and subject to the terms of this Section 3.07; and provided, further that, if and to the extent that a Mortgage so permits, the related Mortgagor shall be required to maintain insurance other than what is available exercise its reasonable efforts to obtain the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty required insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific from Qualified Insurers and required insurance coverage with respect to damages or casualties caused obtained by terrorist or similar acts, the Master Servicer shall be from Qualified Insurers. The cost of any such insurance coverage obtained by either the Master Servicer or the Special Servicer shall be a Servicing Advance to be paid by the Master Servicer pursuant to Section 3.03. If not required under the terms of the Mortgage or the Mortgage Loan documents, the Special Servicer may require that earthquake insurance be secured for one or more Serviced Mortgaged Properties at the expense of the Trust Fund (including the Special Servicer's costs and expenses incurred in obtaining such insurance). Subject to Section 3.17(a), the Special Servicer shall also cause to be maintained for each REO Property no less insurance coverage than was required of the Mortgagor under the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place Mortgage as of the Closing Date; provided that all such insurance shall be obtained from Qualified Insurers. All such insurance policies maintained by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to property and do not relate to an REO Property) a "standard" mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee (and, in the case of a Loan Combination, the related Non-Trust Noteholder(s)) (in the case of insurance maintained in respect of Mortgage Loans); (ii) shall be in the name of the Special Servicer (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan documents; (vii) to the extent that the Mortgage or other Mortgage Loan documents specifically require terrorism coverage or the Mortgage requires the related Mortgagor to carry "all risk" coverage, shall include terrorism coverage, unless the failure to obtain such terrorism coverage constitutes an Acceptable Insurance Default; and (viii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Notwithstanding the foregoing, the Master Servicer or the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standardshall not be required to obtain, and (during shall not be in default hereunder for failing to obtain, any Subordinate Control Period) with the consent insurance coverage that was previously required of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with Mortgagor under the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either related Mortgage if (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or any rate; (b) such insurance is not available at any rate from a Qualified Insurer (failure to maintain required insurance due to either of clause (a) provided that the Master Servicer or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisorthe Special Servicer, as applicable, will have no more than thirty shall obtain such insurance from the next highest rated insurer offering such insurance at commercially reasonable rates); (30c) days subject to respond to the prior approval of the Controlling Class Representative (which approval is deemed granted if not denied within 10 Business Days after its receipt of the Master Servicer's or the Special Servicer’s 's request for such consent approval), such insurance is not available at commercially reasonable rates and, as determined by the Master Servicer or consultation; provided, however, that upon the Special Servicer’s determination, Servicer following due inquiry conducted in a manner consistent with the Servicing Standard, the subject hazards are not commonly insured against by prudent owners of similar real properties in similar locales (but only by reference to such insurance that exigent circumstances do not allow has been obtained by such owners at the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety then current market rates); or (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance underd) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the Trustee does not have an insurable interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage LoanLoan (other than a Loan Combination), or in the related Loan Combination Custodial Account, subject to withdrawal pursuant to Section 3.05(e), in the case of amounts received in respect of a Loan Combination, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided. Notwithstanding the foregoing, however, that this sentence shall with respect to the Mortgage Loans which either (x) require the Mortgagor to maintain "all risk" property insurance (and do not limit expressly permit an exclusion for terrorism) or (y) contain provisions generally requiring the rights applicable Mortgagor to maintain insurance in types and against such risks as the holder of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs Loan reasonably requires from time to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant time in order to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toprotect its interests, the Master Servicer will be required to (A) use reasonable efforts to monitor whether the insurance policies for the related Mortgaged Property contain Additional Exclusions, (B) request the Mortgagor to either purchase insurance against the risks specified in the Additional Exclusions or provide an explanation as to its reasons for failing to purchase such insurance and (C) notify the Special ServicerServicer if any insurance policy contains Additional Exclusions or if any Mortgagor fails to purchase the insurance requested to be purchased by the Master Servicer pursuant to clause (B) above. If the Special Servicer determines in accordance with the Servicing Standard that such failure is not an Acceptable Insurance Default, the Special Servicer shall notify the Master Servicer and the Master Servicer shall cause such insurance to be maintained. Furthermore, the Special Servicer shall inform the Rating Agencies as to such conclusions for those Mortgage Loans that (i) have one of the case may be10 highest outstanding Stated Principal Balances of all of the Mortgage Loans then included in the Trust Fund or (ii) comprise more than 5% of the outstanding Stated Principal Balance of the Mortgage Loans then included in the Trust Fund (and, if a Loan Combination satisfies clause (i) and/or clause (ii), the Special Servicer shall also inform the related Non-Trust Noteholder(s) as to such conclusion). During the period that the Special Servicer is evaluating the availability of such insurance, the Master Servicer will not be liable for any loss related to its failure to require the Mortgagor to maintain such insurance and will not be in default of its obligations as a Servicing Advanceresult of such failure and the Master Servicer will not itself maintain such insurance or cause such insurance to be maintained.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Serviced Mortgaged Properties or and/or REO Properties. In the event that the Special Servicer causes any REO Property to be covered by such blanket policy, the incremental cost of such insurance applicable to such REO Property (other than any minimum or standby premium payable for such policy whether or not any REO Property is covered thereby) shall be paid by the Master Servicer as applicablea Servicing Advance pursuant to Section 3.03. Such a blanket policy or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by (or, in the Master Servicercase of a Loan Combination Mortgaged Property or any Loan Combination REO Property, into the related Loan Combination Custodial Account) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket policy or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any the amount of such deductible exceeds the deductible limitation that pertained to permitted under the related Mortgage Loan documents (oror if the related Mortgage Loan documents are silent regarding a permitted deductible, in the absence of any such a deductible limitation, the deductible limitation for an individual policy which that is consistent with the Servicing Standard). The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholdersthe Certificateholders (and, in the case of a Loan Combination, the related Non-Trust Noteholder(s)), claims under any such blanket policy or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause an Adverse Rating Event or a Glendale Galleria Related MBS Adverse Rating Event (as evidenced in writing from each Rating Agency). Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not result in an Adverse Rating Event or a Glendale Galleria Related MBS Adverse Rating Event (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without ten (10) for 10 days’ prior ' written notice to the TrusteeTrustee prior to cancellation. So The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in an Adverse Rating Event or a Glendale Galleria Related MBS Adverse Rating Event, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this Section 3.07.
(d) Within 90 days of the Closing Date, with respect to each of the Mortgage Loans identified on Schedule II as being covered by an environmental insurance policy, the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) shall notify the insurer under such environmental insurance policy and take all other action necessary for the Trustee, on behalf of the Certificateholders (and in the case of a Loan Combination, the related Non-Trust Noteholder(s)), to be an insured (and for the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan), on behalf of the Trust Fund (and in the case of a Loan Combination, the related Non-Trust Noteholder(s)), to make claims) under such environmental insurance policy. In the event that the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) has actual knowledge of any event (an "Insured Environmental Event") giving rise to a claim under any environmental insurance policy in respect of any Mortgage Loan covered thereby, the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) shall, in accordance with the terms of such environmental insurance policy and the Servicing Standard, timely make a claim thereunder with the appropriate insurer and shall take such other actions in accordance with the Servicing Standard which are necessary under such environmental insurance policy in order to realize the full value thereof for the benefit of the Certificateholders (and in the case of a Loan Combination, the related Non-Trust Noteholder(s)). Any legal fees, premiums or other out-of-pocket costs incurred in connection with any such claim under an environmental insurance policy shall be paid by the Master Servicer and shall be reimbursable to it as a Servicing Advance. With respect to each environmental insurance policy that relates to one or more Mortgage Loans, the Master Servicer shall review and fam
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (Merrill Lynch Mortgage Trust 2005-Cki1), Pooling and Servicing Agreement (Merrill Lynch Mortgage Trust 2005-Cki1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Master Servicer (with respect to Mortgage Loans and Companion Loans to the case of each extent that the Trust Fund has an insurable interest, but other than with respect to the 2007-C30 Serviced Mortgage Loans, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 2007-IQ14 Serviced Mortgage Loan, the Master GECMC 2007-C1 Serviced Mortgage Loan and their related Companion Loans, as applicable) and the Special Servicer shall use reasonable efforts (with respect to REO Properties to the extent that the Trust Fund has an insurable interest, but other than with respect any REO Property related to the 2007-C30 Serviced Mortgage Loans, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 2007-IQ14 Serviced Mortgage Loan or the GECMC 2007-C1 Serviced Mortgage Loan, as applicable) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, howeverfurther, if and to the extent that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisora Mortgage so permits, the Special Servicer will not related Mortgagor shall be required to do so. If any such approval of exercise its reasonable best efforts to obtain the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt required insurance coverage from the Master Servicer of the Master Servicer’s determination Qualified Insurers and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation required insurance coverage obtained by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable from Qualified Insurers. For the avoidance of doubt, REO Property with respect to the Non-Serviced Mortgage Loans is excluded for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insuranceall purposes from this Section 3.07. The cost of any such insurance coverage obtained by either the Master Servicer shall notify or the Special ServicerServicer shall be a Servicing Advance to be paid by the Master Servicer pursuant to Section 3.03. Whether or not the applicable Mortgage Loan documents require such insurance, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if may request that earthquake insurance be secured for one or more Mortgaged Properties at the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest expense of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyMajority Subordinate Certificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, also cause to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan DocumentsMortgage; provided, however, provided that the Special Servicer all such insurance shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardobtained from Qualified Insurers. All such insurance policies maintained as described above by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “standard” mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, or Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days’ prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan document; and (vii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan or Companion Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loans so permit; provided, however, that this sentence shall not limit . Notwithstanding the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toforegoing, the Master Servicer or Special Servicer, as applicable, will not be required to maintain (and in the case may beof the Special Servicer, with respect to any Specially Serviced Mortgage Loan), and shall not cause a Mortgagor to be in default with respect to the failure of the related Mortgagor to obtain, all-risk casualty insurance which does not contain any carve-out for terrorist or similar acts, if and only if the Special Servicer, in consultation with the Controlling Class Representative, and, with respect to each Co-Lender Loan (other than the Non-Serviced Mortgage Loans), in consultation with the related Companion Holder if required under the applicable Intercreditor Agreement, has determined in accordance with the Servicing Standard that either (a) such insurance is not available at any rate or (b) such insurance is not available at commercially reasonably rates and that such hazards are not at the time commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which such Mortgaged Property is located; provided, however, the Controlling Class Representative shall not have more than three Business Days to respond to the Special Servicer’s request for consultation; provided, further, that upon the Special Servicer’s determination, as applicable, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Controlling Class Representative or Companion Holder, if applicable, the Special Servicer shall not be required to do so; provided, further, that, during the period that the Special Servicer is evaluating such insurance hereunder, the Master Servicer shall not be liable for any loss related to its failure to require the Mortgagor to maintain terrorism insurance and shall not be in default of its obligations hereunder as a Servicing Advanceresult of such failure. The Special Servicer shall promptly notify the Master Servicer of each determination under this paragraph.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans, Companion Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without for ten (10) days’ prior written notice to the TrusteeTrustee prior to any cancellation. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification, downgrade or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten days’ written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct or indirect parent), are rated at least “A” or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (Wachovia Bank Commercial Mortgage Trust Series 2007-C31), Pooling and Servicing Agreement (Wachovia Bank Commercial Mortgage Trust Series 2007-C31)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Master Servicer, with respect to each of the case of each Mortgage LoanLoans, including Specially Serviced Mortgaged Loans, and the Master Servicer Special Servicer, with respect to REO Properties, shall use reasonable efforts efforts, consistent with the Servicing Standard Standard, to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to by the terms of the related Mortgage Loan Documents and documents, or if the Mortgagor does not maintain, shall itself maintain for each Mortgaged Property all insurance coverage as is available at commercially reasonable rates;
(B) required under the related Mortgage; provided that if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not exercise such discretion in a manner consistent with the Servicing Standard and subject to the terms of this Section 3.07; and provided, further that, if and to the extent that a Mortgage so permits, the related Mortgagor shall be required to maintain insurance other than what is available exercise its reasonable efforts to obtain the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty required insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific from Qualified Insurers and required insurance coverage with respect to damages or casualties caused obtained by terrorist or similar acts, the Master Servicer shall be from Qualified Insurers. The cost of any such insurance coverage obtained by either the Master Servicer or the Special Servicer shall be a Servicing Advance to be paid by the Master Servicer pursuant to Section 3.03. If not required under the terms of the Mortgage or the Mortgage Loan documents, the Special Servicer may require that earthquake insurance be secured for one or more Mortgaged Properties at the expense of the Trust Fund (including the Special Servicer's costs and expenses incurred in obtaining such insurance). Subject to Section 3.17(a), the Special Servicer shall also cause to be maintained for each REO Property no less insurance coverage than was required of the Mortgagor under the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place Mortgage as of the Closing Date; provided that all such insurance shall be obtained from Qualified Insurers. All such insurance policies maintained by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to property and do not relate to an REO Property) a "standard" mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee (and, in the case of a Loan Combination, the related Non-Trust Noteholder(s)) (in the case of insurance maintained in respect of Mortgage Loans); (ii) shall be in the name of the Special Servicer (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan documents; (vii) to the extent that the Mortgage or other Mortgage Loan documents specifically require terrorism coverage or the Mortgage requires the related Mortgagor to carry "all risk" coverage, shall include terrorism coverage, unless the failure to obtain such terrorism coverage constitutes an Acceptable Insurance Default; and (viii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Notwithstanding the foregoing, the Master Servicer or the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standardshall not be required to obtain, and (during shall not be in default hereunder for failing to obtain, any Subordinate Control Period) with the consent insurance coverage that was previously required of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with Mortgagor under the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either related Mortgage if (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or any rate; (b) such insurance is not available from a Qualified Insurer (provided that the Special Servicer shall obtain such insurance from the next highest rated insurer offering such insurance at any rate commercially reasonable rates); (failure c) subject to maintain required insurance due to either the prior approval of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate the Controlling Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to which approval is deemed granted if not denied within 10 Business Days after its receipt of the Master Servicer's or the Special Servicer’s 's request for such consent approval), such insurance is not available at commercially reasonable rates and, as determined by the Master Servicer or consultation; provided, however, that upon the Special Servicer’s determination, Servicer following due inquiry conducted in a manner consistent with the Servicing Standard, the subject hazards are not commonly insured against by prudent owners of similar real properties in similar locales (but only by reference to such insurance that exigent circumstances do not allow has been obtained by such owners at the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety then current market rates); or (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance underd) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the Trustee does not have an insurable interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage LoanLoan (other than a Loan Combination), or in the related Loan Combination Custodial Account, subject to withdrawal pursuant to Section 3.05(e), in the case of amounts received in respect of a Loan Combination, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided. Notwithstanding the foregoing, however, that this sentence shall with respect to the Mortgage Loans which either (x) require the Mortgagor to maintain "all risk" property insurance (and do not limit expressly permit an exclusion for terrorism) or (y) contain provisions generally requiring the rights applicable Mortgagor to maintain insurance in types and against such risks as the holder of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs Loan reasonably requires from time to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant time in order to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toprotect its interests, the Master Servicer will be required to (A) use reasonable efforts to monitor whether the insurance policies for the related Mortgaged Property contain Additional Exclusions, (B) request the Mortgagor to either purchase insurance against the risks specified in the Additional Exclusions or provide an explanation as to its reasons for failing to purchase such insurance and (C) notify the Special ServicerServicer if any insurance policy contains Additional Exclusions or if any Mortgagor fails to purchase the insurance requested to be purchased by the Master Servicer pursuant to clause (B) above. If the Special Servicer determines in accordance with the Servicing Standard that such failure is not an Acceptable Insurance Default, the Special Servicer shall notify the Master Servicer and the Master Servicer shall cause such insurance to be maintained. Furthermore, the Special Servicer shall inform the Rating Agencies as to such conclusions for those Mortgage Loans that (i) have one of the case may be10 highest outstanding Stated Principal Balances of all of the Mortgage Loans then included in the Trust Fund or (ii) comprise more than 5% of the outstanding Stated Principal Balance of the Mortgage Loans then included in the Trust Fund (and, if a Loan Combination satisfies clause (i) and/or clause (ii), the Special Servicer shall also inform the related Non-Trust Noteholder(s) as to such conclusion). During the period that the Special Servicer is evaluating the availability of such insurance, the Master Servicer will not be liable for any loss related to its failure to require the Mortgagor to maintain such insurance and will not be in default of its obligations as a Servicing Advanceresult of such failure and the Master Servicer will not itself maintain such insurance or cause such insurance to be maintained.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties. In the event that the Special Servicer causes any REO Property to be covered by such blanket policy, the incremental cost of such insurance applicable to such REO Property (other than any minimum or standby premium payable for such policy whether or not any REO Property is covered thereby) shall be paid by the Master Servicer as applicablea Servicing Advance pursuant to Section 3.03. Such a blanket policy or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by (or, in the Master Servicercase of a Loan Combination Mortgaged Property or any Loan Combination REO Property, into the related Loan Combination Custodial Account) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket policy or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any the amount of such deductible exceeds the deductible limitation that pertained to permitted under the related Mortgage Loan documents (oror if the related Mortgage Loan documents are silent regarding a permitted deductible, in the absence of any such a deductible limitation, the deductible limitation for an individual policy which that is consistent with the Servicing Standard). The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholdersthe Certificateholders (and, in the case of a Loan Combination, the related Non-Trust Noteholder(s)), claims under any such blanket policy or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause an Adverse Rating Event or a Westchester Related MBS Adverse Rating Event (as evidenced in writing from each Rating Agency). Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not result in an Adverse Rating Event or a Westchester Related MBS Adverse Rating Event (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without ten (10) for 10 days’ prior ' written notice to the TrusteeTrustee prior to cancellation. So The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in an Adverse Rating Event or a Westchester Related MBS Adverse Rating Event, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this Section 3.07.
(d) Within 90 days of the Closing Date, with respect to each of the Mortgage Loans identified on Exhibit J as being covered by an environmental insurance policy, the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) shall notify the insurer under such environmental insurance policy and take all other action necessary for the Trustee, on behalf of the Certificateholders (and in the case of a Loan Combination, the related Non-Trust Noteholder(s)), to be an insured (and for the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan), on behalf of the Trust Fund (and in the case of a Loan Combination, the related Non-Trust Noteholder(s)), to make claims) under such environmental insurance policy. In the event that the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) has actual knowledge of any event (an "Insured Environmental Event") giving rise to a claim under any environmental insurance policy in respect of any Mortgage Loan covered thereby, the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) shall, in accordance with the terms of such environmental insurance policy and the Servicing Standard, timely make a claim thereunder with the appropriate insurer and shall take such other actions in accordance with the Servicing Standard which are necessary under such environmental insurance policy in order to realize the full value thereof for the benefit of the Certificateholders (and in the case of a Loan Combination, the related Non-Trust Noteholder(s)). Any legal fees, premiums or other out-of-pocket costs incurred in connection with any such claim under an environmental insurance policy shall be paid by the Master Servicer and shall be reimbursable to it as a Servicing Advance. With respect to each environmental insurance policy that relates to one or more Mortgage Loans, the Master Servicer shall review and familiarize itself with the terms and conditions relating to enforcement of clai
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (Merrill Lynch Mortgage Trust 2005-McP1), Pooling and Servicing Agreement (Merrill Lynch Mortgage Trust 2005-McP1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and or (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Mortgage Loan unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Mortgage Loan to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower under any Mortgage Loan to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower under any Mortgage Loan to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower under any Mortgage Loan does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower under any Mortgage Loan fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower under a Mortgage Loan has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower under a Mortgage Loan has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer (or the applicable sub-servicer) on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “AA-” by Fitch Fitch, and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporabon
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2012-C9), Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2012-C9)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower each Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage maintain, and, if such Borrower the Mortgagor does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) maintained, for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due including each Mortgaged Property relating to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such any Specially Serviced Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably requirerequired, subject to applicable law, under the related Mortgage Loan Documentsloan documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any Mortgage Loan grants such loan documents permit the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Mortgagor is required to obtain the requisite insurance coveragemaintain, the Master Servicer shall (exercise such discretion in a manner consistent with the Servicing Standard and, prior to the date such existing insurance expires or is required to be renewed, the Master Servicer may, to the extent consistent with the Servicing Standard, take into account insurance in place at loan origination, with a view towards requiring insurance comparable to that required under other Mortgage Loans with express provisions governing such matters and including business interruption or rental loss insurance for at least 12 months; provided, further, that the Master Servicer shall be required to maintain such insurance coverage upon the related Mortgagor’s failure to do so only to the extent that such insurance is available at commercially reasonable rates and the Trustee, on behalf of the Trust, as mortgagee has an insurable interest. Subject to Section 3.17(b), the Special Servicer shall also cause to be maintained for each REO Property no less insurance coverage (to the extent available at commercially reasonable rates) use efforts (A) than was previously required of the related Mortgagor under the related loan documents and (B), at a minimum, (i) hazard insurance with a replacement cost rider, (ii) business interruption or rental loss insurance for at least 12 months, and (iii) commercial general liability insurance, in each case, in an amount customary for the type and geographic location of such REO Property and consistent with the Servicing Standard Standard; provided that all such insurance required to cause the related Borrower to obtain the requisite insurance coverage be maintained by Master Servicer or Special Servicer shall be obtained from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have a financial strength or claims-paying rating no obligation beyond using its reasonable efforts consistent with lower than two rating categories below the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standardhighest rated Certificates outstanding, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain no lower than “[_]” from [_] and “[_]” from [_] (or obtain in such other form and amount or issued by an insurer with such other financial strength or claims-paying ability as would not, as confirmed in writing by the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardrelevant Rating Agency, result in an Adverse Rating Event. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a the Mortgage LoanLoans), or shall name the Trustee Trustee) as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of REO Properties), and shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in into the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), or Section 3.05(f), as applicable, in the case of amounts received in respect of a Mortgage Loan, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an a REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower Mortgagor under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, by and reimbursable to, to the Master Servicer or the Special Servicer, as the case may be, as a Servicing Advance. Notwithstanding the foregoing, if as of the Closing Date the loan documents specifically and expressly set forth terms requiring insurance coverage against terrorist or similar acts for a Mortgage Loan with a Stated Principal Balance greater than $[_________], then the Master Servicer and the Special Servicer shall enforce the terms of the related loan documents in accordance with the Servicing Standard, and if the Mortgagor fails to maintain such insurance, such failure shall constitute a Servicing Transfer Event. To the extent the loan documents do not set forth specific terms requiring insurance coverage against terrorist or similar acts and a Mortgage Loan (x) requires a Mortgagor to maintain insurance policies covering some or all of the risks contained in the Additional Exclusions or (y) in accordance with the Servicing Standard, the Master Servicer (in consultation with the Special Servicer (in consultation with the Directing Certificateholder)) has determined that the loan documents permit the lender to require the Mortgagor to maintain insurance policies covering some or all the risks contained in the Additional Exclusions (the covered risks required to be covered or that the lender has the discretion to require to be covered being referred to as “Covered Risks”), the Master Servicer shall use reasonable efforts in accordance with the Servicing Standard to determine whether, upon renewal of the Mortgagor’s property or casualty insurance (including any all-risk insurance policy), any of the Covered Risks are excluded from coverage. If any of the Covered Risks are determined by the Master Servicer to be excluded from coverage, the Master Servicer shall request the Mortgagor to either (i) purchase insurance acceptable to the Master Servicer in accordance with the Servicing Standard and in accordance with the related loan documents covering such Covered Risks or (ii) provide a written explanation as to its reasons for failing to purchase such insurance. Notwithstanding the foregoing, with the written consent of the Special Servicer in accordance with the Servicing Standard the Master Servicer may waive the requirement to procure insurance covering any of the Covered Risks if the Master Servicer determines in accordance with the Servicing Standard that (1) insurance covering any such Covered Risks is not available at a commercially reasonable price, or (2) based on information reasonably available to the Master Servicer, after due inquiry, any such Covered Risks are at that time not commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which the Mortgaged Property is located unless the Stated Principal Balance of the Mortgage Loan is greater than $[_________]. If the Stated Principal Balance of the Mortgage Loan is greater than $[_________], then the Master Servicer must determine that the circumstances in both clauses (1) and (2) of the immediately preceding sentence apply prior to waiving the Mortgagor’s requirement to procure insurance with respect to any Covered Risks. If the Special Servicer fails to give a response to the Master Servicer as referenced in the second preceding sentence within [___] Business Days of the Master Servicer initially notifying the Special Servicer in writing of such request, the Master Servicer shall promptly notify the Directing Certificateholder of such failure of the Special Servicer to respond to such request. If the Directing Certificateholder and/or the Special Servicer have not responded to the Master Servicer within [___] Business Days of the notice referenced in the immediately preceding sentence, the Master Servicer shall determine in accordance with the Servicing Standard whether to require (or not require) the Mortgagor to maintain such insurance; provided that during the period that the Special Servicer and/or the Directing Certificateholder are evaluating such insurance, none of the Master Servicer, the Special Servicer and/or the Directing Certificateholder shall be liable for any loss related to its failure to require a Mortgagor to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure. If the Master Servicer requires the Mortgagor to maintain such insurance and the Mortgagor fails to maintain such insurance, to the extent such insurance is then reasonably available, the Master Servicer shall then procure such insurance in accordance with the Servicing Standard and such failure by the Mortgagor shall constitute a Servicing Transfer Event. For purposes of computing whether the $[_________] threshold described herein is met for a particular Mortgage Loan, if a Mortgage Loan is secured by multiple Mortgaged Properties, then the amount subject to the $[_________] threshold shall be the portion of the Stated Principal Balance of the related Mortgage Loan prorated based on an individual Mortgaged Property’s appraised value as a percentage of the total appraised value of all of the related Mortgaged Properties.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-force placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, that it is required to service and administer hereunder, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having a financial strength or claims-paying rating no lower than “[_]” from [_] and “[_]” from [_] or having such other financial strength or claims-paying ability rating as would not, as confirmed in writing by the Required Claims-Paying Ratingsrelevant Rating Agency, result in an Adverse Rating Event and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-force placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which that is consistent with the Servicing Standard). The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-forced placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or or REO Properties for which it is responsible exist as part of the Trust Fund) keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the Required Claims-Paying Ratingshighest rated Certificates outstanding, and in any event no lower than “[_]” from [_] (or, if not rated by [_], “[_]” by [_]) and “[_]” from [_], a fidelity bond in such form and amount as are consistent would permit it to be a qualified ▇▇▇▇▇▇ ▇▇▇ seller-servicer of multifamily mortgage loans (or in such other form and amount or issued by an insurer with such other financial strength or claims-paying ability rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Servicing StandardTrustee by the relevant Rating Agency)). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten [ten] days’ prior written notice to the Trustee. Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (10or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties for which it is responsible exist as part of the Trust Fund) also keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than “[_]” from [_] (or, if not rated by [_], “[_]” by [_]) and “[_]” from [_], a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified ▇▇▇▇▇▇ Mae seller-servicer of multifamily mortgage loans (or in such other form and amount or issued by an insurer with such other financial strength or claims-paying rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Trustee by the relevant Rating Agency)). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without [ten] days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or the Special Servicer (or its direct or indirect parent company), as applicable, are rated not lower than “[_]” from [_] and “[_]” from [_], the Master Servicer or Special Servicer, as applicable, may self-insure with respect to either or both of the fidelity bond coverage and the errors and omissions coverage required as described above, in which case it shall not be required to maintain an insurance policy with respect to such party’s corporacoverage.
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (Banc of America Merrill Lynch Commercial Mortgage Inc.), Pooling and Servicing Agreement (Banc of America Merrill Lynch Commercial Mortgage Inc.)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Serviced Mortgage LoanLoan or Serviced Loan Combination, the applicable Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the applicable Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Serviced Mortgage Loan and or Serviced Loan Combination or (ii) the outstanding principal balance of such Serviced Mortgage LoanLoan or Serviced Loan Combination, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or (subject to the Servicing Standard) that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the applicable Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Serviced Mortgage Loan or Serviced Loan Combination unless such insurance policy was in effect at the time of the origination of such Serviced Mortgage Loan or Serviced Loan Combination pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable ratesrates and the Trustee has an insurable interest;
(B) if and to the extent that any Serviced Mortgage Loan or Serviced Loan Combination grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the applicable Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the applicable Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Serviced Mortgage Loan to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the applicable Master Servicer be required to cause the Borrower under any Serviced Mortgage Loan to maintain, or itself obtain, insurance coverage that the applicable Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the applicable Master Servicer to cause the Borrower under any Serviced Mortgage Loan to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the such Master Servicer on a force-placed basis; and
(F) to the extent the applicable Master Servicer itself is required to maintain insurance that the Borrower under any Serviced Mortgage Loan does not maintain, the applicable Master Servicer shall not be required to maintain insurance other than what is available to the applicable Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower under any Serviced Mortgage Loan fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the applicable Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the applicable Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the applicable Special Servicer’s request for such consent or consultation; provided, however, provided that upon the applicable Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the applicable Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the applicable Special Servicer will not be required to do so. If any such approval of the applicable Special Servicer has not been expressly denied within ninety (90) days of the applicable Special Servicer’s receipt from the applicable Master Servicer of the applicable Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the applicable Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the applicable Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the applicable Special Servicer (or, to the extent applicable, during the period that the applicable Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the applicable Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The applicable Master Servicer shall notify the applicable Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder and (if a Serviced Loan Combination is involved) the related Serviced Pari Passu Companion Loan Holder(s) if the applicable Master Servicer determines that any Borrower under a Serviced Mortgage Loan has failed to maintain insurance required under (or that the such Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower under a Serviced Mortgage Loan has notified the applicable Master Servicer in writing that such Borrower does not intend to maintain such insurance and the applicable Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. .
(b) Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each Administered REO Property, the applicable Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such Administered REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million 1,000,000 per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months (or at least eighteen (18) months, in the case of an Administered REO Property whose related REO Mortgage Loan had an initial principal balance exceeding $35,000,000), in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, provided that both of the following conditions and/or limitations shall apply:
(A) the applicable Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what above unless the Trustee has an insurable interest; and
(B) the applicable Special Servicer shall not be required to maintain or obtain the insurance coverage otherwise described above to the extent that the coverage is not available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the applicable Master Servicer (or the applicable sub-servicer) on behalf of the Trustee, in the case of insurance maintained in respect of a Serviced Mortgage LoanLoan or Serviced Loan Combination, or shall name the Trustee as the insured, with loss payable to the applicable Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an Administered REO Property. Any amounts collected by the applicable Master Servicer or the applicable 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account or, to the extent the loss affects a Serviced Pari Passu Companion Loan Holder, in the Serviced Pari Passu Companion Loan Custodial Account, as applicable, in each case as appropriate in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Serviced Mortgage Loan, or in the REO Account of the applicable Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the applicable Master Servicer or applicable Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage LoanLoan or Serviced Loan Combination, notwithstanding that the terms of such Serviced Mortgage Loan or Serviced Loan Combination so permit; provided, however, provided that this sentence shall not limit the rights of the applicable Master Servicer or applicable Special Servicer on behalf of the Trust (and, if applicable, any related Serviced Pari Passu Companion Loan Holders) to enforce any obligations of the related Borrower under such Serviced Mortgage LoanLoan or Serviced Loan Combination. Costs to the applicable Master Servicer or the applicable Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the applicable Master Servicer or applicable Special Servicer, as the case may be, as a Servicing Advance.
(bc) If (i) the applicable Master Servicer or the applicable Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the any Serviced Mortgage Loans Loans, Serviced Loan Combinations or Administered REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the applicable Master Servicer or applicable Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2A (low)” by DBRS (or, if not rated by DBRS, an equivalent (or higher) rating by any two other NRSROs (which may include KBRA and M▇▇▇▇’▇)), “A3” by M▇▇▇▇’▇ and “A” an equivalent rating by Fitch KBRA (if then rated by KBRA), or it has received a Rating Agency Confirmation from each Rating Agency with respect to which such rating is not satisfied, and the applicable Master Servicer or the applicable Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the applicable Master Servicer or the applicable Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the applicable Master Servicer or the applicable Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Serviced Mortgage Loan, Serviced Loan Combination or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account (or, to the extent the loss affects any Serviced Pari Passu Companion Loan Holder(s), in the Serviced Pari Passu Companion Loan Custodial Account, as applicable) maintained by the applicable Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Serviced Mortgage Loan or Serviced Loan Combination (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The applicable Master Servicer and the applicable Special Servicer shall each prepare and present, on behalf of itself, the Trustee and CertificateholdersCertificateholders and, if applicable, any related Serviced Pari Passu Companion Loan Holders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cd) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special applicable Master Servicer has actual knowledge of any event giving rise to a claim under (an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora“Insured Environment
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2014-Lc16), Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2014-C20)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case Each of each Mortgage Loan, the Master Servicer shall and the Special Servicer shall, as to those Mortgage Loans it is obligated to service hereunder, use reasonable its best efforts consistent in accordance with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower the related Mortgagor does not so maintain, the Master Servicer will (even in the case of Specially Serviced Mortgage Loans) shall itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property maintain (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal subject to the lesser provisions of (i) the full replacement cost of improvements securing such Mortgage Loan this Agreement regarding Nonrecoverable Advances, and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, further subject to applicable lawSection 3.11(h) hereof), under to the related Mortgage Loan Documents; provided that all extent the Trustee, as mortgagee on behalf of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant Certificateholders, has an insurable interest and to the terms of the related Mortgage Loan Documents and is extent available at commercially reasonable rates;
) all insurance coverage as is required under the related Mortgage (B) subject to applicable law); provided that if and any Mortgage permits the holder thereof to dictate to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to Mortgagor the insurance provider from whom the related Borrower is coverage to obtain the requisite insurance coveragebe maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall (to the extent impose such insurance requirements as are consistent with the Servicing Standard) use efforts consistent with the Servicing Standard . The Special Servicer shall cause to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thatbe maintained for each REO Property, in each case, have case with an insurer that possesses the Required Claims-Paying Ratings at the time such policy is purchased, no less insurance coverage is obtained;
(C) than was previously required of the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, related Mortgagor under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty Mortgage did not so require, hazard insurance, public liability insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist and business interruption or similar acts, and/or (ii) specific rent loss insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, in such insurance upon terms not materially less favorable than those in place amounts as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry are consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with be reimbursed for the premium costs thereof as a Servicing Standard, Advance pursuant to maintain with Qualified Insurers having and to the Required Claims-Paying Ratings extent permitted under Section 3.05
(a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, the Mortgaged Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer Servicer, as applicable, in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy insuring against hazard losses on any or all of the Mortgage Loans Mortgaged Properties (in the case of the Master Servicer) or REO Properties, as applicableProperties (in the case of the Special Servicer), then, to the extent such policy (Ai) is obtained from a Qualified Insurer having that possesses the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable, so covered, and the premium costs thereof shall be, if and to the extent they are specifically attributable either to a specific Mortgaged Property during any period that the related Mortgagor has failed to maintain the hazard insurance required under the related Mortgage Loan in respect of such Mortgaged Property or to a specific REO Property, a Servicing Advance reimbursable pursuant to and to the extent permitted under Section 3.05(a); provided that, to the extent that such premium costs are attributable to properties other than Mortgaged Properties and/or REO Properties or are attributable to Mortgaged Properties as to which the hazard insurance required under the related Mortgage Loan is being maintained, they shall be borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder Property, as applicable, a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyproperty specific policy (taking into account any deductible clause that would have been permitted therein), promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds (without any right of reimbursement from the Trust, reimbursement) the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such losses up to the difference between the amount of the deductible clause to in such blanket policy and the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence amount of any deductible clause that would have been permitted under such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)property specific policy. The Master Servicer and the Special Servicer shall each agree to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cii) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if If the Master Servicer has actual knowledge shall cause any Mortgaged Property or the Special Servicer shall cause any REO Property to be covered by a master single interest insurance policy naming the Master Servicer or the Special Servicer, as applicable, on behalf of any event the Trustee as the loss payee, then to the extent such policy (an “Insured Environmental Event”i) giving rise is obtained from a Qualified Insurer that possesses the Required Claims-Paying Ratings and (ii) provides protection equivalent to a claim under an Environmental Insurance Policythe individual policies otherwise required, the Master Servicer shall notify or the Special Servicer Servicer, as applicable, shall conclusively be deemed to have satisfied its obligation to cause such effect and insurance to be maintained on such Mortgaged Property (in the case of the Master Servicer) or REO Property (in the case of the Special Servicer). If the Master Servicer shall take reasonable actions cause any Mortgaged Property as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect related Mortgagor has failed to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policymaintain the required insurance coverage, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, or the Special Servicer shall notify cause any REO Property, to be covered by such master single interest insurance policy, then the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions incremental costs of such Environmental Insurance Policy insurance applicable to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each such Mortgaged Property or REO Property that (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether covered thereby) paid by the Master Servicer or the Special Servicer, as applicable, shall constitute a Servicing Advance. The Master Servicer shall, consistent with the Servicing Standard and the terms of the related Mortgage Loan documents, pursue the related Mortgagor for the amount of such incremental costs. All other costs associated with any such master single interest insurance policy (including, without limitation, any minimum or standby premium payable for such policy) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such master single interest insurance policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as applicable, shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property, as the case may be, a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such property specific policy had it been maintained, promptly deposit into the Certificate Account from its own funds (without right of reimbursement) the amount not otherwise payable under the master single interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing AdvanceStandard.
(dc) The Each of the Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having recognized insurers that possess the Required Claims-Paying Ratings, Ratings a fidelity bond in such form and amount as are consistent with would permit it to be a qualified Fann▇▇ ▇▇e ▇▇ Fred▇▇▇ ▇▇c seller-servicer of multifamily mortgage loans. Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) 30 days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations In addition, each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement keep in force with recognized insurers that possess the Required Claims-Paying Ratings a policy or Special policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its obligation to service the Mortgage Loans for which it is responsible hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified Fann▇▇ ▇▇▇ or Fred▇▇▇ ▇▇▇ seller-servicer of multifamily mortgage loans. Any such errors and omissions policy, if required, shall provide that it may not be canceled without 30 days' prior written notice to the Trustee. It is understood and agreed that the Rating Agencies have affirmed in writing that the use of certain specified insurance carriers by the Master Servicer, the Special Servicer and/or Sub-Servicers will not, in and of itself, cause a downgrade, qualification or change in the rating assigned to any Class of Certificates, notwithstanding that such party’s corporainsurance carriers do not possess the Required Claims-Paying Ratings as of the Closing Date. It is further understood and agreed that if the claims-paying ratings of any such insurance carrier are downgraded below the level assigned as of the Closing Date, such insurance carrier promptly shall be replaced by a Qualified Insurer that possesses the Required Claims-Paying Ratings.
(d) All insurance coverage required to be maintained under this Section 3.07 shall be obtained from Qualified Insurers.
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (Nationslink Funding Corp), Pooling and Servicing Agreement (Nationslink Funding Corp)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Property Manager (other than with respect to Specially Serviced Assets) and the case of each Mortgage Loan, the Master Special Servicer (with respect to Specially Serviced Assets) shall use reasonable efforts consistent in accordance with the Servicing Standard to cause the related Borrower Obligor to maintain (including identifying the extent to which a Borrower is maintaining for each Mortgaged Property all insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Lease or Mortgage Loan Documents and is available at commercially reasonable rates;
Loan, as applicable (B) including for the avoidance of doubt, any Environmental Policy); provided , that if and to the extent that any such Lease or Mortgage Loan grants permits the lender lessor thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Obligor is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. Any amounts collected by the Master Servicer Manager 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, shall exercise such discretion in a manner consistent with the Servicing Standard; and provided , further , that, if and to the extent that a Lease or Mortgage Loan so permits, the related Obligor shall be required to obtain the required insurance coverage from Qualified Insurers that have a claims-paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, which are licensed to do business in the state wherein the related Obligor or the Mortgaged Property subject to the policy, as a Servicing Advance.applicable, is located. If such Obligor does not maintain the required insurance or, with respect to any Environmental Policy in place as of the applicable First Collateral Date, the Property Manager will itself cause such insurance to be maintained with Qualified Insurers meeting such criteria; provided , that the 58 US-DOCS\ 96557504.7 102826315.7
(b) The Property Manager or Special Servicer may satisfy its obligations under Section 3.07(a) by obtaining, maintaining or causing to be maintained a blanket or forced place insurance policy. If (i) applicable, the Master Servicer Property Manager or the Special Servicer shall obtain and maintain, or cause to be obtained and maintainedmaintained on behalf of each applicable Issuer, a master forced place insurance policy or a blanket policy (or master force-placed policy an endorsement to an existing policy) insuring against hazard losses (not otherwise insured by a Tenant or Borrower due to a default by such Tenant or Borrower under the insurance covenants of its Lease or Mortgage Loan or because a Tenant or Borrower permitted to self-insure fails to pay for casualty losses) on all of the Mortgage Loans or REO Propertiesapplicable Mortgaged Properties that it is required to service and administer, as applicable, then, to the extent such which policy shall (Ai) is be obtained from a Qualified Insurer having the Required Claimsa claims-Paying Ratingspaying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, and (Bii) provides provide protection equivalent to the individual policies otherwise required herein under Section 3.07(a) . The Property Manager and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer shall bear the cost of any premium payable in respect of any such blanket policy (other than blanket policies specifically obtained for Mortgaged Properties or its corporate parentREO Properties) has long-term unsecured debt obligations without right of reimbursement; provided , that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and if the Master Servicer Property Manager or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on causes any Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been to be covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trustblanket policy in order to satisfy such obligations, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because incremental costs of such deductible clause insurance applicable to the extent such Mortgaged Property or REO Property shall constitute, and be reimbursable as, a Property Protection Advance (it being understood that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and incremental costs incurred by the Special Servicer shall each prepare be paid by the Property Manager to the Special Servicer and presentthat such payment shall constitute, on behalf of itselfand be reimbursable as, a Property Protection Advance). If the Trustee and Certificateholders, claims under any such blanket or master forceProperty 59 US-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.DOCS\ 96557504.7 102826315.7
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance PolicyProperty Manager, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer Back-Up Manager shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or REO Properties Assets exist as part of the Trust FundCollateral) keep in force with a Qualified Insurer having the Required Claims-Paying Ratingsa claims paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a fidelity bond in such form and amount as are consistent with does not adversely affect any rating assigned by any Rating Agency to the Servicing StandardNotes; provided , that, unless any Rating Agency then rating any Notes at the request of an Issuer states that the form or amount of any such fidelity bond would be the sole cause of or be a material reason for a downgrade, qualification or withdrawal of any rating then assigned by such Rating Agency to such Notes, the form and amount of such fidelity bond shall be deemed to not adversely affect any rating assigned by any Rating Agency to the Notes. The Master Servicer or Each of the Property Manager and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer Property Manager or the Special Servicer, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the TrusteeIssuers. So long as the long-term unsecured debt obligations Each of the Master Property Manager, the Special Servicer or and the Back-Up Manager shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Assets exist as part of the Collateral) also keep in force with a Qualified Insurer having a claims-paying ability rated at least “A: VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall name the Indenture Trustee as an additional insured and shall be in such party’s corporaform and amount as does not adversely affect any rating assigned by any Rating Agency to the Notes; provided , that, unless 60 US-DOCS\ 96557504.7 102826315.7
Appears in 2 contracts
Sources: Property Management and Servicing Agreement (Spirit MTA REIT), Property Management and Servicing Agreement (Spirit Realty, L.P.)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer (with respect to Mortgage Loans other than Specially Serviced Mortgaged Loans) and the Special Servicer (with respect to Specially Serviced Mortgage Loans) shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Mortgagor is required to obtain the requisite insurance coveragemaintain, the Master Servicer or the Special Servicer, as the case may be, shall (to the extent exercise such discretion in a manner consistent with the Servicing Standard) use efforts consistent , with a view towards requiring insurance comparable to that required under other Mortgage Loans with express provisions governing such matters; and provided further that, if and to the Servicing Standard to cause extent that a Mortgage so permits, the related Borrower Mortgagor shall be required to obtain the requisite required insurance coverage from Qualified Insurers that, in each case, have a claims-paying rating no lower than two rating categories below the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
highest rated Bonds outstanding, and in any event no lower than "[A]" (C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably requirean equivalent rating), subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts from each of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyRating Agencies. Subject to Sections Section 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable effortsalso cause to be maintained for each REO Property no less insurance coverage than was previously required of the Mortgagor under the related Mortgage and at a minimum, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full hazard insurance with a replacement cost of improvements at such REO Property or rider, (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve 12 months, and (12iii) monthscomprehensive general liability insurance, in each case if so required pursuant to case, in an amount customary for the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates type and geographic location of such REO Property and consistent with the Servicing Standard; provided that all such insurance shall be obtained from Qualified Insurers that, in each case, if providing casualty insurance, shall have a claims-paying rating no lower than two rating categories below the highest rated Bonds outstanding, and in any event no lower than "[A]" (or an equivalent rating), from each of the Rating Agencies. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage LoanLoans), or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of REO Properties), and shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 2 contracts
Sources: Servicing and Administration Agreement (Criimi Mae CMBS Corp), Servicing and Administration Agreement (Criimi Mae CMBS Corp)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In Each of the Master Servicer (in the case of each Mortgage Loan, Loans and Serviced Whole Loans (other than Specially Serviced Mortgage Loans and Non-Serviced Mortgage Loans)) and the Master Special Servicer (solely in the case of Specially Serviced Mortgage Loans) shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower each Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for in respect of the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of (to the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless extent such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and coverage is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (terms as determined by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thator Special Servicer, in each caseas applicable, have the Required Claims-Paying Ratings at the time provided that any such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or determination that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and terms shall, subject to Section 3.24(g), be consented to by the Majority Certificateholder of the Controlling Class); provided, that if any Mortgage permits the holder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such hazards Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall impose such insurance requirements as are not consistent with the Servicing Standard. If a Mortgagor fails to maintain such insurance, the Master Servicer (at the direction of the Special Servicer in the case of a Specially Serviced Mortgage Loan or REO Loan) shall (to the extent available at commercially reasonable terms as determined by the Master Servicer, which shall be entitled to rely on an opinion of counsel or insurance consultants in making such determination, provided that, subject to the Servicing Standard, such final determination shall be consented to by the Majority Certificateholder of the Controlling Class) obtain such insurance (which may be through a master or single interest policy) and the cost (including any deductible relating to such insurance and any out of pocket cost incurred by the Master Servicer in obtaining advice of counsel or insurance consultants) of such insurance (or in the case of a master or single interest policy, the incremental cost (including any deductible relating to such insurance) of such insurance relating to the specific Mortgaged Property), shall be a Servicing Advance and shall be recoverable by the Master Servicer pursuant to Section 3.05(a) or 3.05(e). If the Master Servicer or Special Servicer, as the case may be, determines in accordance with the preceding provisions of this paragraph that the applicable insurance is not available at commercially reasonable terms, 152 the Master Servicer or the Special Servicer, as the case may be, shall notify the Majority Certificateholder of the Controlling Class and the Rating Agencies of such determination. If at any time commonly insured against for properties similar a Mortgaged Property related to a Mortgage Loan serviced hereunder is located in an area identified in the Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Federal Emergency Management Agency as having special flood hazards or it becomes located in such area by virtue of remapping conducted by such agency (and flood insurance has been made available), the Master Servicer (or in the case of a Specially Serviced Mortgage Loan, the Special Servicer) shall, if and to the extent that the Mortgage Loan or Serviced Whole Loan requires the Mortgagor or permits the mortgagee to require the Mortgagor to do so, use reasonable efforts to cause the related Mortgagor to maintain a flood insurance policy meeting the requirements of the current guideline of the Federal Insurance Administration in the maximum amount of insurance coverage available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as amended, unless otherwise specified by the related Mortgage Loan or Serviced Whole Loan. With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or the Serviced Whole Loan, if (i) the Mortgagor is required by the terms of the Mortgage Loan or Serviced Whole Loan to maintain such insurance (or becomes obligated by virtue of the related Mortgaged Property becoming located in such area by virtue of such remapping) or (ii) the terms of the Mortgage Loan or Serviced Whole Loan permit the mortgagee to require the Mortgagor to obtain such insurance, the Master Servicer (or in the case of any Specially Serviced Loan, the Special Servicer), shall promptly notify the Mortgagor of its obligation to obtain such insurance. If the Mortgagor fails to obtain such flood insurance within 120 days of such notification, the Master Servicer (or in the case of any Specially Serviced Mortgage Loan, the Special Servicer) shall obtain such insurance, the cost of which shall be a Servicing Advance and shall be recoverable by the Master Servicer pursuant to Section 3.05(a) or 3.05(e); provided, that the Master Servicer or Special Servicer shall not be required to incur any such cost if such Advance would constitute a Nonrecoverable Servicing Advance; provided, further, if the Master Servicer or Special Servicer, as applicable, shall determine that the payment of such amount is (i) necessary to preserve the related Mortgaged Property and located (ii) would be in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval best interest of the Special Servicer has not been expressly denied within ninety Certificateholders (90) days or with respect to any Serviced Whole Loan, of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (orCertificateholders and, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicableany related Serviced B Note Holders), then the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of make such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust payment from amounts in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicableCertificate Account or, with respect to each REO Propertyany Serviced Whole Loan, from the related Serviced Whole Loan Custodial Account. Subject to Section 3.17(a), the Special Servicer shall also use reasonable efforts, consistent with the Servicing Standard, efforts to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide cause to be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and terms) no less insurance coverage than was previously required of the Mortgagor under the related Mortgage or as is consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer (in the case of Mortgaged Properties) or the Special Servicer (in the case of REO Properties) on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with applicable law, the terms of the related Mortgage Loan or Serviced Whole Loan documents and the Servicing Standard) shall be deposited in (or remitted for deposit to) the Collection Certificate Account or, with respect to any Serviced Whole Loan, deposited in accordance with Section 3.04(or remitted for deposit to) the related 153 Serviced Whole Loan Custodial Account, subject to withdrawal pursuant to Section 3.053.05(a) and Section 3.05(e), respectively, in the case of amounts received in respect of a Mortgage LoanLoan or Serviced B Note, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid the outstanding principal balance or Stated Principal Balance of the related Mortgage Loan or Serviced Whole Loan, notwithstanding that the terms of such Mortgage Loan or Serviced Whole Loan so permit; provided, however, that this sentence but shall not limit the rights of be recoverable by the Master Servicer as a Servicing Advance pursuant to Section 3.05(a) or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to Section 3.05(e), as applicable.
(i) If the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) obtains and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintains a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or Mortgaged Properties and/or REO Properties, as applicableProperties for which it is responsible to cause the maintenance of insurance hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related such Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any a Mortgaged Property securing a Mortgage Loan or any an REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by or, with respect to any Serviced Whole Loan, deposited in the Master Servicer, related Serviced Whole Loan Custodial Account (or into the Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (Loan, or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholdersthe Certificateholders (and with respect to the Serviced Whole Loans and the related Serviced B Note Holders), claims under any such blanket policy maintained by it in a timely fashion in accordance with the terms of such policy.
(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-force placed insurance policy, which provides protection equivalent to the individual policies otherwise required, the Master Servicer or Special Servicer shall conclusively be deemed to have satisfied its respective obligations to cause hazard insurance to be maintained on such Mortgaged Properties and/or REO Properties. Such policy may contain a deductible clause, in which case the Master Servicer or the Special Servicer, as applicable, shall in the event that (x) there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and (y) 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 Certificate Account or, with respect to any Serviced Whole Loan, deposit into the related Serviced Whole Loan Custodial Account (or into the Servicing Account if insurance proceeds 154 are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) 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. The Master Servicer and the Special Servicer each agrees to prepare and present, on behalf of itself, the Trustee and the Certificateholders (and with respect to any Serviced Whole Loan, the related Serviced B Note Holders), claims under any such master force placed insurance policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master Servicer, which shall take reasonable actions as are in accordance term of this Agreement a blanket fidelity bond and an errors and omissions insurance policy covering its officers and employees (and with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject other persons acting on behalf of it, shall cause such persons to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of maintain such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard insurance) in connection with any claim its activities under this Agreement and naming the Trustee as an Environmental Insurance Policy described above (whether by the Master Servicer additional insured or the Special Servicer) loss payee, as applicable. The amount of coverage shall be (subject at least equal to Section 3.11(h) and Section 3.19(b)) paid bythe coverage that would be required by FNMA or FHLMC, and reimbursable towhichever is greater, with respect to the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be, were servicing and administering the Mortgage Loans, Serviced Whole Loans and/or the REO Properties for which it is responsible hereunder for FNMA or FHLMC. Such fidelity Coverage of the Master Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of such Person and providing the coverage required by this Section 3.07(c) shall provide that it may not satisfy the requirements of this Section 3.07(c).
(d) All insurance coverage required to be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of maintained by the Master Servicer or Special Servicer, as applicable, under this Section 3.07 shall be obtained from Qualified Insurers having a claims paying ability rating (or the obligations of which are guaranteed or backed by a company having such party’s corporaclaims paying ability rating or insurance financial strength rating, as applicable) of not less than (x) "A" by Standard & Poor's and (y) "A" by Fitch; provided, however, that the requirements of clauses (x) or (y) shall not be applicable with respect to Standard & Poor's or Fitch, as applicable, if such Rating Agency shall have confirmed in writing that an insurance company with a lower claims paying ability rating shall not result, in and of itself, in a downgrade, qualification or withdrawal of the then current ratings by such Rating Agency of any Class of Certificates. Notwithstanding the foregoing, so long as the long-term debt or the deposit obligations or claims-paying ability of the Master Servicer or Special Servicer (or its immediate or remote parent) is rated at least "A" by Standard & Poor's and "A" by Fitch, the Master Servicer or Special Servicer, respectively, shall be allowed to provide self-insurance with respect to a fidelity bond and such errors and omissions policy. Coverage of the Master Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of the Master Servicer or the Special Servicer and providing the coverage required by this Section 3.07(d) shall satisfy the requirements of this Section 3.07(d).
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (GMAC Commercial Mortgage Securities, Inc. Series 2005-C1 Trust), Pooling and Servicing Agreement (GMAC Commercial Mortgage Securities, Inc. Series 2005-C1 Trust)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Serviced Mortgage LoanLoan or Serviced Loan Combination, the applicable Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the applicable Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Serviced Mortgage Loan and or Serviced Loan Combination or (ii) the outstanding principal balance of such Serviced Mortgage LoanLoan or Serviced Loan Combination, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the applicable Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Serviced Mortgage Loan or Serviced Loan Combination unless such insurance policy was in effect at the time of the origination of such Serviced Mortgage Loan or Serviced Loan Combination pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable ratesrates and the Trustee has an insurable interest;
(B) if and to the extent that any Serviced Mortgage Loan or Serviced Loan Combination grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the applicable Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the applicable Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Serviced Mortgage Loan to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the applicable Master Servicer be required to cause the Borrower under any Serviced Mortgage Loan to maintain, or itself obtain, insurance coverage that the applicable Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the applicable Master Servicer to cause the Borrower under any Serviced Mortgage Loan to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the applicable Master Servicer itself is required to maintain insurance that the Borrower under any Serviced Mortgage Loan does not maintain, the applicable Master Servicer shall not be required to maintain insurance other than what is available to the applicable Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower under any Serviced Mortgage Loan fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the applicable Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the applicable Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the applicable Special Servicer’s request for such consent or consultation; provided, however, that upon the applicable Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the applicable Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the applicable Special Servicer will not be required to do so. If any such approval of the applicable Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the applicable Master Servicer of the applicable Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the applicable Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the applicable Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the applicable Special Servicer (or, to the extent applicable, during the period that the applicable Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the applicable Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The applicable Master Servicer shall notify the applicable Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder and (if a Serviced Loan Combination is involved) the related Serviced Pari Passu Companion Loan Holder(s) if the applicable Master Servicer determines that any Borrower under a Serviced Mortgage Loan has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower under a Serviced Mortgage Loan has notified the applicable Master Servicer in writing that such Borrower does not intend to maintain such insurance and the applicable Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. .
(b) Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each Administered REO Property, the applicable Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such Administered REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months (or at least eighteen (18) months, in the case of an Administered REO Property whose related REO Mortgage Loan had an initial principal balance exceeding $35,000,000), in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that both of the following conditions and/or limitations shall apply:
(A) the applicable Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what above unless the Trustee has an insurable interest; and
(B) the applicable Special Servicer shall not be required to maintain or obtain the insurance coverage otherwise described above to the extent that the coverage is not available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the applicable Master Servicer (or the applicable sub-servicer) on behalf of the Trustee, in the case of insurance maintained in respect of a Serviced Mortgage LoanLoan or Serviced Loan Combination, or shall name the Trustee as the insured, with loss payable to the applicable Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an Administered REO Property. Any amounts collected by the applicable Master Servicer or the applicable 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account or the Serviced Pari Passu Companion Loan Custodial Account, as appropriate in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Serviced Mortgage Loan, or in the REO Account of the applicable Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the applicable Master Servicer or applicable Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage LoanLoan or Serviced Loan Combination, notwithstanding that the terms of such Serviced Mortgage Loan or Serviced Loan Combination so permit; provided, however, that this sentence shall not limit the rights of the applicable Master Servicer or applicable Special Servicer on behalf of the Trust (and, if applicable, the Serviced Pari Passu Companion Loan Holders) to enforce any obligations of the related Borrower under such Serviced Mortgage LoanLoan or Serviced Loan Combination. Costs to the applicable Master Servicer or the applicable Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the applicable Master Servicer or applicable Special Servicer, as the case may be, as a Servicing Advance.
(bc) If (i) the applicable Master Servicer or the applicable Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Serviced Mortgage Loans Loans, Serviced Loan Combinations or Administered REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the applicable Master Servicer or applicable Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A-” by Fitch and “A2” by ▇▇▇▇▇’▇ and “A” by Fitch or has received a Rating Agency Confirmation from each Rating Agency with respect to which such rating is not satisfied, and the applicable Master Servicer or the applicable Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the applicable Master Servicer or the applicable Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the applicable Master Servicer or the applicable Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Serviced Mortgage Loan, Serviced Loan Combination or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account (or, to the extent the loss affects the Serviced Pari Passu Companion Loan Holder(s), in the Serviced Pari Passu Companion Loan Custodial Account, as applicable) maintained by the applicable Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Serviced Mortgage Loan or Serviced Loan Combination (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The applicable Master Servicer and the applicable Special Servicer shall each prepare and present, on behalf of itself, the Trustee and CertificateholdersCertificateholders and, if applicable, the Serviced Pari Passu Companion Loan Holders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cd) With respect to each Performing Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the applicable Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the applicable Master Servicer shall notify the applicable Special Servicer to such effect and the applicable Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporamak
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2013-C13), Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2013-C13)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Property Manager (other than with respect to Specially Serviced Assets) and the case of each Mortgage Loan, the Master Special Servicer (with respect to Specially Serviced Assets) shall use reasonable efforts consistent in accordance with the Servicing Standard to cause the related Borrower Obligor to maintain (including identifying the extent to which a Borrower is maintaining for each Mortgaged Property all insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Lease or Mortgage Loan Documents and is available at commercially reasonable rates;
Loan, as applicable (B) including for the avoidance of doubt, any Environmental Policy); provided, that if and to the extent that any such Lease or Mortgage Loan grants permits the lender lessor thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Obligor is required to obtain the requisite insurance coveragemaintain, the Master Servicer Property Manager or the Special Servicer, as the case may be, shall (to the extent exercise such discretion in a manner consistent with the Servicing Standard) use efforts consistent with ; and provided, further, that, if and to the Servicing Standard to cause extent that a Lease or Mortgage Loan so permits, the related Borrower Obligor shall be required to obtain the requisite required insurance coverage from Qualified Insurers thatthat have a claims-paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, which are licensed to do business in each casethe state wherein the related Obligor or the Mortgaged Property subject to the policy, have as applicable, is located. If such Obligor does not maintain the Required Claims-Paying Ratings at required insurance or, with respect to any Environmental Policy in place as of the time applicable First Collateral Date, the Property Manager will itself cause such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or with Qualified Insurers meeting such criteria; provided, that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer Manager shall not be required to maintain such insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to Indenture Trustee (as mortgagee of record on behalf of the related Mortgaged Property (iNoteholders) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist have an insurable interest or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer Property Manager has determined (in its reasonable judgment based on inquiry consistent in accordance with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (ai) such insurance is not available at a commercially reasonable rates rate and that such the subject hazards are not at the time not commonly insured against for by prudent owners of properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, located or (bii) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Propertyrate. Subject to Sections Section 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall also use reasonable effortsefforts to cause to be maintained for each REO Property no less insurance coverage than was previously required of the Obligor under the related Mortgage or Lease and at a minimum, consistent (i) hazard US-DOCS\96557504.296557504.7 insurance with the Servicing Standarda replacement cost rider and (ii) comprehensive general liability insurance, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciationin each case, in an amount that is at least equal to customary for the lesser type and geographic location of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard; provided, that all such insurance shall be obtained from Qualified Insurers that, if they are providing casualty insurance, shall have a claims-paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and “A” by S&P. The cost of any such insurance coverage obtained by either the Property Manager or the Special Servicer shall be a Property Protection Advance to be paid by the Property Manager. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf Property Manager, as agent of and for the account of the applicable Issuer and the Indenture Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer Property Manager or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerTenant, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account 2.11 of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing AdvanceIndenture.
(b) The Property Manager or Special Servicer may satisfy its obligations under Section 3.07(a) by obtaining, maintaining or causing to be maintained a blanket or forced place insurance policy. If (i) applicable, the Master Servicer Property Manager or the Special Servicer shall obtain and maintain, or cause to be obtained and maintainedmaintained on behalf of each applicable Issuer, a master forced place insurance policy or a blanket policy (or master force-placed policy an endorsement to an existing policy) insuring against hazard losses (not otherwise insured by a Tenant or Borrower due to a default by such Tenant or Borrower under the insurance covenants of its Lease or Mortgage Loan or because a Tenant or Borrower permitted to self-insure fails to pay for casualty losses) on all of the Mortgage Loans or REO Propertiesapplicable Mortgaged Properties that it is required to service and administer, as applicable, then, to the extent such which policy shall (Ai) is be obtained from a Qualified Insurer having the Required Claimsa claims-Paying Ratingspaying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, and (Bii) provides provide protection equivalent to the individual policies otherwise required herein under Section 3.07(a). The Property Manager and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer shall bear the cost of any premium payable in respect of any such blanket policy (other than blanket policies specifically obtained for Mortgaged Properties or its corporate parentREO Properties) has long-term unsecured debt obligations without right of reimbursement; provided, that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and if the Master Servicer Property Manager or the Special Servicer, as the case may be, self-insures for its obligation causes any Mortgaged Property or REO Property to maintain the individual policies otherwise requiredbe covered by such blanket policy in order to satisfy such obligations, the Master incremental costs of such insurance applicable to such Mortgaged Property or REO Property shall constitute, and be reimbursable as, a Property Protection Advance (it being understood that such incremental costs incurred by the Special Servicer shall be paid by the Property Manager to the Special Servicer and that such payment shall constitute, and be reimbursable as, a Property Protection Advance). If the Property Manager or the Special Servicer, as the case may beapplicable, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance causes any Mortgaged Property or REO Property to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such covered by a blanket or master force-placed insurance policy, the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (which shall not include any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) shall be paid as a Property Protection Advance (it being understood that such incremental costs incurred by the Special Servicer shall be paid by the Property Manager to the Special Servicer and that such payment shall constitute, and be reimbursable as, a Property Protection Advance). Any such policy may contain a deductible clause (not in excess of a customary amount), ) in which case the Master Servicer Property Manager or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder US-DOCS\96557504.296557504.7 a hazard insurance policy complying with the requirements of Section 3.07(a), ) and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and Property Manager or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Indenture Trustee and Certificateholdersthe applicable Issuer, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy. Any payments on such policy shall be made to the Property Manager as agent of and for the account of the applicable Issuer, the Noteholders and the Indenture Trustee.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance PolicyProperty Manager, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer Back-Up Manager shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or REO Properties Assets exist as part of the Trust FundCollateral) keep in force with a Qualified Insurer having the Required Claims-Paying Ratingsa claims paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a fidelity bond in such form and amount as are consistent with does not adversely affect any rating assigned by any Rating Agency to the Servicing StandardNotes; provided, that, unless any Rating Agency then rating any Notes at the request of an Issuer states that the form or amount of any such fidelity bond would be the sole cause of or be a material reason for a downgrade, qualification or withdrawal of any rating then assigned by such Rating Agency to such Notes, the form and amount of such fidelity bond shall be deemed to not adversely affect any rating assigned by any Rating Agency to the Notes. The Master Servicer or Each of the Property Manager and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer Property Manager or the Special Servicer, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the TrusteeIssuers. So long as the long-term unsecured debt obligations Each of the Master Property Manager, the Special Servicer or and the Back-Up Manager shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Assets exist as part of the Collateral) also keep in force with a Qualified Insurer having a claims-paying ability rated at least “A: VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall name the Indenture Trustee as an additional insured and shall be in such partyform and amount as does not adversely affect any rating assigned by any Rating Agency to the Notes; provided, that, unless any Rating Agency then rating any Notes at the request of an Issuer states that the form or amount of any such insurance would be the sole cause of or be a material reason for a downgrade, qualification or withdrawal of any rating then assigned by such Rating Agency to such Notes, the form and amount of such insurance shall be deemed to not adversely affect any rating assigned by any Rating Agency to the Notes. Each of the Property Manager and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Property Manager or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without ten (10) days’ prior written notice to the Issuers. US-DOCS\96557504.296557504.7 Each of the Property Manager and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Assets exist as part of the Collateral) also, on behalf of the Issuers, keep in force with a Qualified Insurer having a claims-paying ability rated at least “A:VIIF” by A.M. Best’s corporaKey Rating Guide and at least “A” by S&P, a lessor’s general liability insurance policy or policies, which policy or policies shall be in such form and amount as does not adversely affect any rating assigned by any Rating Agency to the Notes; provided, that, unless any Rating Agency then rating any Notes at the request of an Issuer states that the form or amount of any such insurance would be the sole cause of or be a material reason for a downgrade, qualification or withdrawal of any rating then assigned by such Rating Agency to such Notes, the form and amount of such insurance shall be deemed to not adversely affect any rating assigned by any Rating Agency to the Notes. Any such general liability insurance policy shall provide that it may not be canceled without ten (10) days’ prior written notice to the Issuers and the Indenture Trustee. Any payments on such policy shall be made to the Property Manager as agent of and for the account of any applicable Issuer and the Indenture Trustee. The insurance described in this clause (c) shall be required to include coverage in respect of losses that may be sustained as a result of an officer’s or employee’s of the Property Manager or the Special Servicer misappropriation of funds and errors and omissions. If the Property Manager (or its corporate parent), the Special Servicer (or its corporate parent) or the Back-Up Manager (or its corporate parent), as applicable, are rated not lower than “A2” by ▇▇▇▇▇’▇, “A” by S&P and “A” by Fitch Ratings, Inc., the Property Manager, the Special Servicer or the Back-Up Manager, as applicable, may self-insure with respect to any insurance coverage or fidelity bond coverage required hereunder, in which case it shall not be required to maintain an insurance policy with respect to such coverage; provided, that Spirit Realty may not self-insure with respect to any such insurance coverage or fidelity bond.
Appears in 2 contracts
Sources: Property Management and Servicing Agreement, Property Management and Servicing Agreement (Spirit MTA REIT)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Master Servicer, with respect to each of the case of each Mortgage LoanLoans, including Specially Serviced Mortgaged Loans, and the Master Servicer Special Servicer, with respect to REO Properties, shall use reasonable efforts efforts, consistent with the Servicing Standard Standard, to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to by the terms of the related Mortgage Loan Documents and Documents, or if the Mortgagor does not maintain, shall itself maintain for each Mortgaged Property all insurance coverage as is available at commercially reasonable rates;
(B) required under the related Mortgage; provided that if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Mortgagor is required to obtain the requisite insurance coveragemaintain, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts exercise such discretion in a manner consistent with the Servicing Standard and subject to cause the terms of this Section 3.07; and provided further that, if and to the extent that a Mortgage so permits, the related Borrower Mortgagor shall be required to exercise its reasonable efforts to obtain the requisite required insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such and required insurance coverage is obtained;
(C) obtained by the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with be from Qualified Insurers. The cost of any such insurance coverage obtained by either the Master Servicer or the Special Servicer shall be a Servicing Standard Advance to be paid by the Master Servicer pursuant to Section 3.03. If not required under the terms of the Mortgage or the Mortgage Loan Documents, the Special Servicer may require that earthquake insurance be secured for one or more Mortgaged Properties at the expense of the Trust Fund (including the Special Servicer's costs and expenses incurred in obtaining such insurance). Subject to Section 3.17(a), the Special Servicer shall also cause the Borrower to maintain the insurance required to be maintained for each REO Property no less insurance coverage than was required of the Mortgagor under the related Mortgage as of the Closing Date; provided that all such insurance shall be obtained from Qualified Insurers. All such insurance policies maintained by the Master Servicer or that the lender Special Servicer (i) shall contain (if they insure against loss to property and do not relate to an REO Property) a "standard" mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee (and, in the case of the Great Mall Loan Pair, the Great Mall B-Noteholder) (in the case of insurance maintained in respect of Mortgage Loans); (ii) shall be in the name of the Special Servicer (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is entitled to reasonably require, subject to applicable law, not permitted under the related Mortgage Loan Documents;
); (Dvi) in no event shall include such other insurance, including, to the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not extent available at commercially reasonable rates and rates, earthquake insurance, where applicable, as required under the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in applicable Mortgage or around the region in which the related Mortgaged Property is located;
other Mortgage Loan Documents; (E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(Fvii) to the extent that the Mortgage or other Mortgage Loan Documents specifically require terrorism coverage or the Mortgage requires the related Mortgagor to carry "all risk" coverage, shall include terrorism coverage, unless the failure to obtain such terrorism coverage constitutes an Acceptable Insurance Default; and (viii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Notwithstanding the foregoing, the Master Servicer itself is required to maintain insurance that or the Borrower does not maintain, the Master Special Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (obtain, and this will shall not be construed in default hereunder for failing to modify obtain, any insurance coverage that was previously required of the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if Mortgagor under the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either Mortgage if (a) such insurance is not available at any rate; (b) such insurance is not available from a Qualified Insurer (provided that Special Servicer shall obtain such insurance from the next highest rated insurer offering such insurance at commercially reasonable rates); or (c) subject to the prior approval of the Controlling Class Representative or, in the case of the Great Mall Loan Pair, the Great Mall Controlling Party (which approval is deemed granted if not denied within 10 Business Days after its receipt of the Master Servicer's or the Special Servicer's request for such approval), such insurance is not available at commercially reasonable rates and that such the subject hazards are not at the time commonly insured against for by prudent owners of similar real properties in similar locales (but only by reference to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available that has been obtained by such owners at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”then current market rates). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage LoanLoan (other than the Great Mall Loan Pair), or in the REO Account Great Mall Custodial Account, subject to withdrawal pursuant to Section 3.05(e), in the case of amounts received in respect of the Special ServicerGreat Mall Loan Pair, or in the applicable REO Account, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided. Notwithstanding the foregoing, however, that this sentence shall with respect to the Mortgage Loans which either (x) require the Mortgagor to maintain "all risk" property insurance (and do not limit expressly permit an exclusion for terrorism) or (y) contain provisions generally requiring the rights applicable Mortgagor to maintain insurance in types and against such risks as the holder of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs Loan reasonably requires from time to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant time in order to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toprotect its interests, the Master Servicer will be required to (A) use reasonable efforts to monitor whether the insurance policies for the related Mortgaged Property contain Additional Exclusions, (B) request the Mortgagor to either purchase insurance against the risks specified in the Additional Exclusions or provide an explanation as to its reasons for failing to purchase such insurance and (C) notify the Special ServicerServicer if any insurance policy contains Additional Exclusions or if any Mortgagor fails to purchase the insurance requested to be purchased by the Master Servicer pursuant to clause (B) above. If the Special Servicer determines in accordance with the Servicing Standard that such failure is not an Acceptable Insurance Default, the Special Servicer shall notify the Master Servicer and the Master Servicer shall cause such insurance to be maintained. Furthermore, the Special Servicer shall inform the Rating Agencies as to such conclusions for those Mortgage Loans that (i) have one of the case may beten (10) highest outstanding Stated Principal Balances of all of the Mortgage Loans then included in the Trust Fund or (ii) comprise more than 5% of the outstanding Stated Principal Balance of the Mortgage Loans then included in the Trust Fund (and, if the Great Mall Loan Pair satisfies clause (i) and/or clause (ii), the Special Servicer shall also inform the Great Mall B-Noteholder as to such conclusion). During the period that the Special Servicer is evaluating the availability of such insurance, the Master Servicer will not be liable for any loss related to its failure to require the Mortgagor to maintain such insurance and will not be in default of its obligations as a Servicing Advanceresult of such failure and the Master Servicer will not itself maintain such insurance or cause such insurance to be maintained.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties. In the event that the Special Servicer causes any REO Property to be covered by such blanket policy, the incremental cost of such insurance applicable to such REO Property (other than any minimum or standby premium payable for such policy whether or not any REO Property is covered thereby) shall be paid by the Master Servicer as applicablea Servicing Advance pursuant to Section 3.03. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by (or, in the Master Servicercase of the Great Mall Mortgaged Property or any Great Mall REO Property, into the Great Mall Custodial Account) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholdersthe Certificateholders (and, in the case of the Great Mall Loan Pair, the Great Mall B-Noteholder), claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not result in an Adverse Rating Event (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without for ten (10) days’ prior ' written notice to the TrusteeTrustee prior to cancellation. So The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this Section 3.07.
(d) Within ninety (90) days of the Closing Date, with respect to each of the Mortgage Loans identified on Exhibit J as being covered by an environmental insurance policy, the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) shall notify the insurer under such environmental insurance policy and take all other action necessary for the Trustee, on behalf of the Certificateholders (and in the case of the Great Mall Loan Pair, the Great Mall B-Noteholder), to be an insured (and for the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan), on behalf of the Trust Fund (and in the case of the Great Mall Loan Pair, the Great Mall B-Noteholder), to make claims) under such environmental insurance policy. In the event that the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) has actual knowledge of any event (an "Insured Environmental Event") giving rise to a claim under any environmental insurance policy in respect of any Mortgage Loan covered thereby, the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) shall, in accordance with the terms of such environmental insurance policy and the Servicing Standard, timely make a claim thereunder with the appropriate insurer and shall take such other actions in accordance with the Servicing Standard which are necessary under such environmental insurance policy in order to realize the full value thereof for the benefit of the Certificateholders (and in the case of the Great Mall Loan Pair, the Great Mall B-Noteholder). Any legal fees, premiums or other out-of-pocket costs incurred in connection with any such claim under an environmental insurance policy shall be paid by the Master Servicer and shall be reimbursable to it as a Servicing Advance. With respect to each environmental insurance policy that relates to one or more Mortgage Loans, the Master Servicer shall review and familiarize itself with the terms and conditions relating to enforcement of claims and shall monitor the dates by which any claim must be made or any action must be taken under such policy to realize the full value thereof for the benefit of the Certificateholders (and in the case of the Great Mall Loan Pair, the Great Mall B-Noteholder) in the event the Master Servicer has actual knowledge of an Insured Environmental Event giving rise to a claim under such policy. In the event that the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) receives notice of any termination of any environmental insurance policy that relates to one or more M
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (Merrill Lynch Mortgage Investors Inc Trust 2004-Mkb1), Pooling and Servicing Agreement (Merrill Lynch Mortgage Investors Inc Trust 2004-Mkb1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Serviced Mortgage LoanLoan or Serviced Loan Combination, the applicable Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the applicable Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Serviced Mortgage Loan and or Serviced Loan Combination or (ii) the outstanding principal balance of such Serviced Mortgage LoanLoan or Serviced Loan Combination, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or (subject to the Servicing Standard) that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the applicable Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Serviced Mortgage Loan or Serviced Loan Combination unless such insurance policy was in effect at the time of the origination of such Serviced Mortgage Loan or Serviced Loan Combination pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable ratesrates and the Trustee has an insurable interest;
(B) if and to the extent that any Serviced Mortgage Loan or Serviced Loan Combination grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the applicable Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the applicable Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Serviced Mortgage Loan to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the applicable Master Servicer be required to cause the Borrower under any Serviced Mortgage Loan to maintain, or itself obtain, insurance coverage that the applicable Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the applicable Master Servicer to cause the Borrower under any Serviced Mortgage Loan to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the applicable Master Servicer itself is required to maintain insurance that the Borrower under any Serviced Mortgage Loan does not maintain, the applicable Master Servicer shall not be required to maintain insurance other than what is available to the applicable Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower under any Serviced Mortgage Loan fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the applicable Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the applicable Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the applicable Special Servicer’s request for such consent or consultation; provided, however, that upon the applicable Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the applicable Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the applicable Special Servicer will not be required to do so. If any such approval of the applicable Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the applicable Master Servicer of the applicable Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the applicable Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the applicable Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the applicable Special Servicer (or, to the extent applicable, during the period that the applicable Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the applicable Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The applicable Master Servicer shall notify the applicable Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder and (if a Serviced Loan Combination is involved) the related Serviced Pari Passu Companion Loan Holder(s) if the applicable Master Servicer determines that any Borrower under a Serviced Mortgage Loan has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower under a Serviced Mortgage Loan has notified the applicable Master Servicer in writing that such Borrower does not intend to maintain such insurance and the applicable Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. .
(b) Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each Administered REO Property, the applicable Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such Administered REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months (or at least eighteen (18) months, in the case of an Administered REO Property whose related REO Mortgage Loan had an initial principal balance exceeding $35,000,000), in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, provided that both of the following conditions and/or limitations shall apply:
(A) the applicable Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what above unless the Trustee has an insurable interest; and
(B) the applicable Special Servicer shall not be required to maintain or obtain the insurance coverage otherwise described above to the extent that the coverage is not available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the applicable Master Servicer (or the applicable sub-servicer) on behalf of the Trustee, in the case of insurance maintained in respect of a Serviced Mortgage LoanLoan or Serviced Loan Combination, or shall name the Trustee as the insured, with loss payable to the applicable Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an Administered REO Property. Any amounts collected by the applicable Master Servicer or the applicable 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account (or, to the extent the loss affects a Serviced Pari Passu Companion Loan Holder, in the Serviced Pari Passu Companion Loan Custodial Account, as applicable), in each case as appropriate in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Serviced Mortgage Loan, or in the REO Account of the applicable Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the applicable Master Servicer or applicable Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage LoanLoan or Serviced Loan Combination, notwithstanding that the terms of such Serviced Mortgage Loan or Serviced Loan Combination so permit; provided, however, that this sentence shall not limit the rights of the applicable Master Servicer or applicable Special Servicer on behalf of the Trust (and, if applicable, any related Serviced Pari Passu Companion Loan Holders) to enforce any obligations of the related Borrower under such Serviced Mortgage LoanLoan or Serviced Loan Combination. Costs to the applicable Master Servicer or the applicable Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the applicable Master Servicer or applicable Special Servicer, as the case may be, as a Servicing Advance.
(bc) If (i) the applicable Master Servicer or the applicable Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the any Serviced Mortgage Loans Loans, Serviced Loan Combinations or Administered REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the applicable Master Servicer or applicable Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “AA-” by Fitch and “A3” by Moody’s, or it has received a Rating Agency Confirmation from each Rating Agency with respect to which such rating is not satisfied, and the applicable Master Servicer or the applicable Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the applicable Master Servicer or the applicable Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the applicable Master Servicer or the applicable Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Serviced Mortgage Loan, Serviced Loan Combination or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account (or, to the extent the loss affects any Serviced Pari Passu Companion Loan Holder(s), in the Serviced Pari Passu Companion Loan Custodial Account, as applicable) maintained by the applicable Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Serviced Mortgage Loan or Serviced Loan Combination (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The applicable Master Servicer and the applicable Special Servicer shall each prepare and present, on behalf of itself, the Trustee and CertificateholdersCertificateholders and, if applicable, any related Serviced Pari Passu Companion Loan Holders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cd) With respect to each Performing Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the applicable Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the applicable Master Servicer shall notify the applicable Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaapplicable Mast
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2013-C16), Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2013-C16)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Serviced Mortgage LoanLoan or Serviced Loan Combination, the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Serviced Mortgage Loan and or Serviced Loan Combination or (ii) the outstanding principal balance of such Serviced Mortgage LoanLoan or Serviced Loan Combination, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Serviced Mortgage Loan unless such insurance policy was in effect at the time of the origination of such Serviced Mortgage Loan or Serviced Loan Combination pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Serviced Mortgage Loan or Serviced Loan Combination grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Serviced Mortgage Loan to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower under any Serviced Mortgage Loan to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower under any Serviced Mortgage Loan to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower under any Serviced Mortgage Loan does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower under any Serviced Mortgage Loan fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder and (if a Serviced Loan Combination is involved) the related Serviced Pari Passu Companion Loan Holder(s) if the Master Servicer determines that any Borrower under a Serviced Mortgage Loan has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower under a Serviced Mortgage Loan has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each Administered REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such Administered REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer (or the applicable sub-servicer) on behalf of the Trustee, in the case of insurance maintained in respect of a Serviced Mortgage LoanLoan or Serviced Loan Combination, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an Administered REO Property. 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account or the Serviced Pari Passu Companion Loan Custodial Account, as appropriate in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Serviced Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage LoanLoan or Serviced Loan Combination, notwithstanding that the terms of such Serviced Mortgage Loan or Serviced Loan Combination so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust (and, if applicable, the Serviced Pari Passu Companion Loan Holders) to enforce any obligations of the related Borrower under such Serviced Mortgage LoanLoan or Serviced Loan Combination. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Serviced Mortgage Loans Loans, Serviced Loan Combinations or Administered REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇M▇▇▇▇’▇ and “AA-” by Fitch Fitch, and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Serviced Mortgage Loan, Serviced Loan Combination or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account (or, to the extent the loss affects the Serviced Pari Passu Companion Loan Holder(s), in the Serviced Pari Passu Companion Loan Custodial Account, as applicable) maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Serviced Mortgage Loan or Serviced Loan Combination (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and CertificateholdersCertificateholders and, if applicable, the Serviced Pari Passu Companion Loan Holders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Administered REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaSt
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2012-C8), Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2012-C8)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Serviced Mortgage Loan (including each Specially Serviced Mortgage Loan), the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratingsmaintained) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably requirerequired, subject to applicable law, under the related Mortgage Loan DocumentsDocuments (except to the extent that the failure to maintain such insurance coverage is an Acceptable Insurance Default); provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any Serviced Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance coverage that the related Borrower is required to maintain, the Master Servicer shall exercise such discretion in a manner consistent with the Servicing Standard, with a view towards requiring insurance coverage with respect to the related Mortgaged Property no less favorable to that in place with respect to the related Mortgaged Property on the Closing Date and otherwise comparable to that required under other Serviced Mortgage Loans with express provisions governing such matters and, in any event, including insurance for property damage resulting from terrorist and similar acts (either by way of an all-risk casualty policy with no exclusion for such risks or a separate policy covering property damage from such risks), as well as business interruption or rental loss insurance for at least 12 months; and provided, further, that, if and to the extent that any Serviced Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause require the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thatthat possess (or whose obligations are, in each any such case, have guaranteed or backed in writing by an entity that possesses) the Required Claims-Paying Ratings at Ratings; and provided, further, that, in the time such insurance coverage is obtained;
(C) case of any Serviced Mortgage Loan, the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, maintain such insurance coverage upon the related Borrower's failure to do so only to the extent that the Master Servicer has determined (I) such insurance is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar Trustee as mortgagee has an insurable interest (provided that, subject to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintainTrustee as mortgagee having an insurable interest, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, property damage resulting from terrorist or similar acts, and/or unless the Borrower's failure to maintain such insurance constituted an Acceptable Insurance Default), and (iiII) specific the payment of premiums for such insurance either would not constitute a Nonrecoverable Advance or may be made directly from the Collection Account in accordance with Section 3.11(i). Subject to Section 3.17(b), the Special Servicer shall also cause to be maintained for each Administered REO Property no less insurance coverage with respect (to damages or casualties caused by the extent (I) such insurance is available at commercially reasonable rates (except in the case of insurance coverage for property damage resulting from terrorist or similar acts, which coverage the Master Special Servicer shall cause maintain unless the Borrower's failure to maintain such insurance would have constituted an Acceptable Insurance Default), and (II) the payment of premiums for such insurance either would not constitute a Nonrecoverable Advance or may be made directly from the Collection Account in accordance with Section 3.11(i)) than was previously required of the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b)and, and/or 3.24at a minimum, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full hazard insurance with a replacement cost of improvements at such REO Property rider and, unless it would have constituted an Acceptable Insurance Default for the related Borrower, no exclusion for terrorist or similar acts, (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve 12 months, and (12iii) monthscommercial general liability insurance, in each case if so required pursuant to case, in an amount customary for the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates type and geographic location of such REO Property and consistent with the Servicing Standard; provided that all such insurance shall be obtained from Qualified Insurers that possess (or whose obligations are, in any such case, guaranteed or backed in writing by an entity that possesses) the Required Claims-Paying Ratings. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Serviced Mortgage Loan), or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of an Administered REO Property), and shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Serviced Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, by and reimbursable to, to the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-force placed policy insuring against hazard losses on some or all of the Serviced Mortgage Loans or and/or Administered REO Properties, as applicable, for which it is responsible, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having that possesses (or whose obligations are guaranteed or backed in writing by an entity that possesses) the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise requiredunder Section 3.07(a), the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-force placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever that maintains such policy, policy shall, if there shall not have been maintained on any Mortgaged Property securing a (other than the [Separately Serviced Mortgage Loan Loan] Mortgaged Property) or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master ServicerAccount, from its own funds (without any right of reimbursement from the Trustreimbursement), the amount not otherwise payable under the blanket or master force-force placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan Documents (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Each of the Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-force placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With Within 45 days after the Closing Date, with respect to each Performing of the Environmentally Insured Mortgage Loan that is subject Loans, the Master Servicer shall notify the insurer under the related Environmental Insurance Policy and take all other action necessary for the Trustee, on behalf of the Certificateholders, to be an insured (and for the Master Servicer, on behalf of the Trust, to make claims) under such Environmental Insurance Policy, if . In the event that the Master Servicer has actual knowledge of any event (an “"Insured Environmental Event”") giving rise to a claim under an any Environmental Insurance PolicyPolicy in respect of any Environmentally Insured Mortgage Loan for which the Borrower has not filed a claim, the Master Servicer shall notify shall, in accordance with the Special Servicer to terms of such effect Environmental Insurance Policy and the Master Servicer Servicing Standard, timely make a claim thereunder with the appropriate insurer and shall take reasonable such other actions as are in accordance with the Servicing Standard and the terms and conditions of which are necessary under such Environmental Insurance Policy in order to make a claim thereunder and achieve realize the payment full value thereof for the benefit of all amounts to which the Trust is entitled thereunderCertificateholders. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer If any other party hereto has actual knowledge of an Insured Environmental Event with respect to any event giving rise to a claim under an Environmental Insurance PolicyEnvironmentally Insured Mortgage Loan, the Special Servicer such party shall promptly so notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees fees, premiums or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any such claim under an Environmental Insurance Policy described above (whether shall be paid by the Master Servicer or the Special Servicer) and shall be (subject reimbursable to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable toit as a Servicing Advance. With respect to each Environmental Insurance Policy in respect of an Environmentally Insured Mortgage Loan, the Master Servicer shall review and familiarize itself with the terms and conditions relating to enforcement of claims and shall monitor the dates by which any claim must be made or any action must be taken under such policy in order to realize the full value thereof for the benefit of the Certificateholders in the event the Master Servicer has actual knowledge of an Insured Environmental Event giving rise to a claim under such policy. The Master Servicer shall abide by the terms and conditions precedent to payment of claims under the Environmental Insurance Policies with respect to the Environmentally Insured Mortgage Loans and take all such action as may be required to comply with the terms and provisions of such policies in order to maintain such policies in full force and effect and to make claims thereunder. In the event that the Master Servicer receives notice of any termination of any Environmental Insurance Policy with respect to Environmentally Insured Mortgage Loan, the Master Servicer shall, within five Business Days after receipt of such notice, notify the Special Servicer, the Controlling Class Representative, the Rating Agencies and the Trustee of such termination in writing. Upon receipt of such notice, the Master Servicer shall address such termination in accordance with Section 3.07(a) in the same manner as it would the case may betermination of any other Insurance Policy required under the related Mortgage Loan Documents. Any legal fees, premiums or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with enforcing the obligations of the Borrower under any Environmental Insurance Policy or a resolution of such termination of an Environmental Insurance Policy shall be paid by the Master Servicer and shall be reimbursable to it as a Servicing Advance.
(d) The Master Servicer and the Special Servicer each shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having Insurers that possess (or whose obligations are, in any such case, guaranteed or backed in writing by an entity that possesses) the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent would permit it to be a qualified Fannie Mae or Freddie Mac seller-servicer of multifamily mortgage loan▇ (▇▇ i▇ ▇uch ▇▇▇▇▇ ▇orm and amount as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Servicing StandardTrustee by the relevant Rating Agency)). The Master Servicer or and the Special Servicer each shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) 30 days’ ' prior written notice to the Trustee. So long In addition, the Master Servicer and the Special Servicer each shall at all times during the term of this Agreement keep in force with Qualified Insurers that possess (or whose obligations are, in any such case, guaranteed or backed in writing by an entity that possesses) the Required Claims-Paying Ratings, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its obligation to service the Serviced Mortgage Loans for which it is responsible hereunder and, to the limited extent contemplated by Articles I through XI, to administer the [Separately Serviced Mortgage Loan], which policy or policies shall be in such form and amount as would permit it to be a qualified Fannie Mae or Freddie Mac seller-servicer of multifamily mortgage loan▇ (▇▇ in such ▇▇▇▇▇ ▇orm and amount as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the long-term unsecured debt obligations Trustee by the relevant Rating Agency)). A Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to such Master Servicer or Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without 30 days' prior written notice to the Trustee.
(e) On the Closing Date, the Depositor shall deliver to and deposit with the Special Servicer the Group Terrorism Insurance Policy, and the Special Servicer shall hold and maintain the Group Terrorism Insurance Policy for so long as it is in effect. In the event that the Special Servicer gains actual knowledge of any act of terrorism at any of the Mortgaged Properties securing the Mortgage Loans identified on Exhibit B-1H, which gives rise to a loss for which a claim can be made under the Group Terrorism Insurance Policy (an "Insured Terrorism Event"), then the Special Servicer shall promptly notify the Trustee and, in accordance with the terms of the Group Terrorism Insurance Policy and the Servicing Standard, shall timely make a claim under the Group Terrorism Insurance Policy with the appropriate insurer and shall take such other actions in accordance with the Servicing Standard which are necessary under the Group Terrorism Insurance Policy in order to realize the full value thereof for the benefit of the Certificateholders. If any other party hereto has actual knowledge of an Insured Terrorism Event with respect to any Mortgage Loan identified on Exhibit B-1H, such party shall promptly so notify the Special Servicer. Any legal fees, premiums or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any such party’s corporaclaim under the Group Terrorism Insurance Policy shall, at the direction of the Special Servicer pursuant to Section 3.19(b), be paid by the Master Servicer and shall be reimbursable to the Master Servicer as a Servicing Advance. With respect to the Group Terrorism Ins
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Citigroup Commercial Mortgage Securities Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In Each of the Master Servicer (in the case of each Mortgage Loan, Loans other than the Master Mesa Grande Loan A2 and Specially Serviced Mortgage Loans) and the Special Servicer (in the case of Specially Serviced Mortgage Loans) shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower each Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for in respect of the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of (to the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless extent such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and coverage is available at commercially reasonable rates;
(B) terms as determined by the Master Servicer or Special Servicer, as applicable); provided that if and any Mortgage permits the holder thereof to dictate to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to Mortgagor the insurance provider from whom the related Borrower is coverage to obtain the requisite insurance coveragebe maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall impose such insurance requirements as are consistent with the Servicing Standard. If a Mortgagor fails to maintain such insurance, the Master Servicer (at the direction of the Special Servicer in the case of a Specially Serviced Mortgage Loan) shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates terms as determined by the Master Servicer, which shall be entitled to rely (at its own expense) on an opinion of counsel or insurance consultants in making such determination) obtain such insurance (which may be through a master or single interest policy) and the related hazards are not at the time commonly insured against at the then-available rates for properties similar cost (including any deductible relating to the related Mortgaged Property such insurance and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts any out of pocket cost incurred by the Master Servicer in obtaining advice of counsel or insurance consultants) of such insurance (or in the case of a master or single interest policy, the incremental cost (including any deductible relating to cause such insurance) of such insurance relating to the Borrower to maintain insurance specific Mortgaged Property), shall be conducted in a manner that takes into account the insurance that would then Servicing Advance and shall be available to recoverable by the Master Servicer on a force-placed basis; and
(F) pursuant to the extent Section 3.05(a). If the Master Servicer itself is required to maintain insurance or Special Servicer, as the case may be, determines in accordance with the preceding provisions of this paragraph that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such applicable insurance is not available at commercially reasonable rates and that such hazards are not at terms, the time commonly insured against for properties similar to the related Mortgaged Property and located in Master Servicer or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for , as the case may be, shall notify the Majority Certificateholder of the Controlling Class and the Rating Agencies of such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If at any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available time a Mortgaged Property related to the Master Servicer a Mortgage Loan serviced hereunder is located in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is area identified in the process of making a determination described above in this paragraph, then, during the period of such evaluation Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Special Servicer Federal Emergency Management Agency as having special flood hazards or it becomes located in such area by virtue of remapping conducted by such agency (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicableand flood insurance has been made available), the Master Servicer shall not be liable for any loss related (or in the case of a Specially Serviced Mortgage Loan, the Special Servicer) shall, if and to its failure the extent that the Mortgage Loan requires the Mortgagor or permits the mortgagee to require the Mortgagor to do so, use reasonable efforts to cause the related Borrower Mortgagor to maintain terrorism a flood insurance and shall not be policy meeting the requirements of the current guideline of the Federal Insurance Administration in default the maximum amount of its obligations hereunder as a result insurance coverage available under the National Flood Insurance Act of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer1968, the TrusteeFlood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) as amended, unless otherwise specified by the related Mortgage Loan Documents and such failure materially and adversely affects such Loan. With respect to any Mortgage Loan and/or other than the interest Mesa Grande Loan A2, if (i) the Mortgagor is required by the terms of the Trust in Mortgage Loan to maintain such insurance (or becomes obligated by virtue of the related Mortgaged Property or if any Borrower has notified the Master Servicer becoming located in writing that such Borrower does not intend to maintain area by virtue of such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (aremapping) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance terms of the related REO Mortgage Loan permit the mortgagee to require the Mortgagor to obtain such insurance, the Master Servicer (or in the case of a Specially Serviced Loan, the Special Servicer), shall promptly notify the Mortgagor of its obligation to obtain such insurance. If the Mortgagor fails to obtain such flood insurance within 120 days of such notification, the Master Servicer (or in the case of a Specially Serviced Mortgage Loan, butthe Special Servicer) shall obtain such insurance, in any event, in an amount sufficient to avoid the application cost of any co-insurance clause, (b) which shall be a comprehensive general liability insurance policy with coverage comparable to that which would Servicing Advance and shall be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to recoverable by the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required Master Servicer pursuant to the related Mortgage Loan DocumentsSection 3.05(a); provided, however, provided that the Master Servicer or Special Servicer shall not be required to incur any such cost if such Advance would constitute a Nonrecoverable Servicing Advance; provided further, if the Master Servicer or Special Servicer, as applicable, shall determine that the payment of such amount is (i) necessary to preserve the related Mortgaged Property and (ii) would be in any event the best interest of the Certificateholders, then the Master Servicer shall make such payment from amounts in the Certificate Account. Subject to maintain or obtain Section 3.17(a), the insurance coverage otherwise described by this paragraph beyond what is Special Servicer shall also use reasonable efforts to cause to be maintained for each REO Property (to the extent available at commercially reasonable rates and terms) no less insurance coverage than was previously required of the Mortgagor under the related Mortgage or as is consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer (in the case of Mortgaged Properties) or the Special Servicer (in the case of REO Properties) on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with applicable law, the terms of the related Mortgage Loan documents and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid the outstanding principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence but shall not limit the rights of be recoverable by the Master Servicer or Special Servicer on behalf of the Trust as a Servicing Advance pursuant to enforce any obligations of the related Borrower under such Mortgage LoanSection 3.05(a). Costs to 101
(i) If the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) obtains and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintains a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or Mortgaged Properties and/or REO Properties, as applicableProperties for which it is responsible to cause the maintenance of insurance hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related such Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any a Mortgaged Property securing a Mortgage Loan or any an REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by (or into the Master Servicer, Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (Loan, or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket policy maintained by it in a timely fashion in accordance with the terms of such policy.
(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-force placed insurance policy, which provides protection equivalent to the individual policies otherwise required, the Master Servicer or Special Servicer shall conclusively be deemed to have satisfied its respective obligations to cause hazard insurance to be maintained on such Mortgaged Properties and/or REO Properties. Such policy may contain a deductible clause, in which case the Master Servicer or the Special Servicer, as applicable, shall in the event that (x) there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and (y) 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 Certificate Account (or into the Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) 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. The Master Servicer and the Special Servicer each agrees to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such master force placed insurance policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard term of this Agreement a blanket fidelity bond and the terms an errors and conditions omissions insurance policy covering its officers and employees and other persons acting on behalf of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard it in connection with any claim its activities under this Agreement and naming the Trustee as an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) additional insured. The amount of coverage shall be (subject at least equal to Section 3.11(h) and Section 3.19(b)) paid bythe coverage that would be required by FNMA or FHLMC, and reimbursable towhichever is 102 greater, with respect to the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be, were servicing and administering the Mortgage Loans and/or the REO Properties for which it is responsible hereunder for FNMA or FHLMC. Such fidelity Coverage of the Master Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of such Person and providing the coverage required by this Section 3.07(c) shall provide that it may not satisfy the requirements of this Section 3.07(c).
(d) All insurance coverage required to be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of maintained by the Master Servicer or Special Servicer, as applicable, under this Section 3.07 shall be obtained from Qualified Insurers having a claims paying ability rating (or the obligations of which are guaranteed or backed by a company having such party’s corporaclaims paying ability rating or insurance financial strength rating, as applicable) of not less than (x) "A" by Standard & Poor's, (y) "A2" by ▇▇▇▇▇'▇ and (z) "A" by Fitch; provided, however, that the requirements of clauses (x), (y) or (z) shall not be applicable with respect to Standard & Poor's, ▇▇▇▇▇'▇ or Fitch, as applicable, if the related Rating Agency shall have confirmed in writing that an insurance company with a lower claims paying ability rating shall not result, in and of itself, in a downgrade, qualification or withdrawal of the then current ratings by such Rating Agency of any Class of Certificates.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Gmac Commercial Mortgage Securities Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer (with respect to Mortgage Loans including Specially Serviced Mortgage Loans) and the Special Servicer (with respect to REO Properties) shall use reasonable its best efforts consistent in accordance with the Servicing Standard Standards to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such the related Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property shall maintain (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal subject to the lesser provisions of (ithis Agreement concerning Nonrecoverable Advances) to the full replacement cost of improvements securing such Mortgage Loan and (ii) extent the outstanding principal balance of such Mortgage LoanIndenture Trustee, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all mortgagee on behalf of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time holders of the origination of such Mortgage Loan pursuant Owner Trust Certificates, has an insurable interest and to the terms of the related Mortgage Loan Documents and is extent available at commercially reasonable rates;
(B) for each Mortgaged Property all insurance coverage as is required under the related Mortgage subject to applicable law; provided that if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower is required to obtain the requisite insurance coveragemaintain on such Mortgaged Property, the Master Servicer shall (to the extent impose such insurance requirements as are consistent with the Servicing Standard) use efforts consistent with Standards. Subject to Section 3.17, the Servicing Standard Special Servicer shall cause to cause be maintained, to the extent available at commercially reasonable rates, for each REO Property no less insurance coverage than was previously required of the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall and if the Master Servicer be required to cause the Borrower to maintainrelated Mortgage did not so require, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or hazard insurance, (ii) not available at commercially reasonable rates public liability insurance and the related hazards business interruption or rental loss insurance in such amounts as are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with be reimbursed for the premium costs thereof as a Servicing Standard, Advance pursuant to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardpermitted under Section 3.05. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora" mortgagee
Appears in 1 contract
Sources: Servicing Agreement (Imh Assets Corp Impac CMB Trust 1998 C1 Col Mor Bond 1998 C1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Master Servicer (with respect to Mortgage Loans and Companion Loans to the case of each extent that the Trust Fund has an insurable interest, but other than with respect to the ▇.▇. ▇▇▇▇▇▇ 2006-LDP8 Serviced Mortgage Loan, the Master 2006-C27 Serviced Mortgage Loan and their related Companion Loans) and the Special Servicer shall use reasonable efforts (with respect to REO Properties to the extent that the Trust Fund has an insurable interest) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, howeverfurther, if and to the extent that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisora Mortgage so permits, the Special Servicer will not related Mortgagor shall be required to do so. If any such approval of exercise its reasonable best efforts to obtain the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt required insurance coverage from the Master Servicer of the Master Servicer’s determination Qualified Insurers and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation required insurance coverage obtained by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable from Qualified Insurers. For the avoidance of doubt, REO Property with respect to the Non-Serviced Mortgage Loans and the Four Seasons Resort and Club - Dallas, TX Loan is excluded for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insuranceall purposes from this Section 3.07. The cost of any such insurance coverage obtained by either the Master Servicer shall notify or the Special ServicerServicer shall be a Servicing Advance to be paid by the Master Servicer pursuant to Section 3.03. Whether or not the applicable Mortgage Loan documents require such insurance, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if may request that earthquake insurance be secured for one or more Mortgaged Properties at the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest expense of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyMajority Subordinate Certificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, also cause to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan DocumentsMortgage; provided, however, provided that the Special Servicer all such insurance shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardobtained from Qualified Insurers. All such insurance policies maintained as described above by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “standard” mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, or Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days’ prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan document; and (vii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan or Companion Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loans so permit; provided, however, that this sentence shall not limit . Notwithstanding the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toforegoing, the Master Servicer or Special Servicer, as applicable, will not be required to maintain (and in the case may beof the Special Servicer, with respect to any Specially Serviced Mortgage Loan), and shall not cause a Mortgagor to be in default with respect to the failure of the related Mortgagor to obtain, all-risk casualty insurance which does not contain any carve-out for terrorist or similar acts or windstorm coverage, if and only if the Master Servicer with respect to non-Specially Serviced Mortgage Loans or the Special Servicer with respect to Specially Serviced Mortgage Loans, in consultation with the Controlling Class Representative, and, with respect to each Co-Lender Loan (other than the Non-Serviced Mortgage Loans), in consultation with the related Companion Holder if required under the applicable Intercreditor Agreement, has determined in accordance with the Servicing Standard that either (a) such insurance is not available at any rate or (b) such insurance is not available at commercially reasonably rates (which determination as to whether such insurance is available at commercially reasonable rates shall be made by the Special Servicer in consultation with and subject to the approval of the Controlling Class Representative with respect to all Mortgage Loans) and that such hazards are not at the time commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which such Mortgaged Property is located and the Controlling Class Representative has approved the decision not to require the borrower to maintain terrorism insurance or windstorm coverage (provided that the decision of the Controlling Class Representative to grant or withhold such consent shall be disregarded by the Special Servicer if such consent or lack of consent would cause the Master Servicer or the Special Servicer, as applicable, to violate the Servicing Standard); provided, however, the Controlling Class Representative’s approval shall be deemed to have been given if it has not responded within five (5) Business Days of receipt of the Master Servicer’s or the Special Servicer’s written recommendation and the information upon which such recommendation is based; provided, further, that upon the Master Servicer’s or the Special Servicer’s determination, as applicable, consistent with the Servicing Standard, that exigent circumstances do not allow the Master Servicer or the Special Servicer to consult with the Controlling Class Representative or Companion Holder, if applicable, the Master Servicer or the Special Servicer, as applicable, shall not be required to do so; provided, further, during the period that the Special Servicer or Controlling Class Representative is evaluating such insurance hereunder, the Master Servicer shall not be liable for any loss related to its failure to require the Mortgagor to maintain terrorism insurance or windstorm coverage and shall not be in default of its obligations hereunder as a Servicing Advanceresult of such failure. The Special Servicer shall promptly notify the Master Servicer of each determination under this paragraph.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans, Companion Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without for ten (10) days’ prior written notice to the TrusteeTrustee prior to any cancellation. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification, downgrade or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten days’ written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct or indirect parent), are rated at least “A” or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Wachovia Bank Commercial Mortgage Trust Series 2006-C28)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts (with respect to Mortgage Loans other than Specially Serviced Mortgaged Loans) and the Special Servicer (with respect to Specially Serviced Mortgage Loans) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard; and provided further that, if and (during to the extent that a Mortgage so permits, the related Mortgagor shall be required to exercise its reasonable best efforts to obtain the required insurance coverage from Qualified Insurers. The cost of any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at coverage obtained by either the time commonly insured against for properties similar to the related Mortgaged Property and located in Master Servicer or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer shall be a Servicing Advance to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from paid by the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available pursuant to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insuranceSection 3.03. The Master Servicer shall notify Majority Subordinate Certificateholder may request that earthquake insurance be secured for one or more Mortgaged Properties at the Special Servicer, the Trustee, the Subordinate Class Representative and expense of the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyCertificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, also cause to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan DocumentsMortgage; provided, however, provided that the Special Servicer all such insurance shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardobtained from Qualified Insurers. All such insurance policies maintained as described above (i) shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “"standard” " mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, or Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; and (iv) in each case such insurance shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any 90 cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without for ten (10) days’ prior ' written notice to the TrusteeTrustee prior to any cancellation. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification (if applicable), downgrade or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten days' written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct or indirect parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (First Union Commercial Mortgage Securities Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case Each of each Mortgage Loan, the Master Servicer shall and the Special Servicer shall, as to those Mortgage Loans it is obligated to service hereunder, use reasonable its best efforts consistent in accordance with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such the related Borrower does not so maintain, the Master Servicer will (even in the case of Specially Serviced Mortgage Loans) shall itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property maintain (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal subject to the lesser provisions of (i) the full replacement cost of improvements securing such Mortgage Loan this Agreement regarding Nonrecoverable Advances, and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, further subject to applicable lawSection 3.11(h) hereof, under and to the related Mortgage Loan Documents; provided that all extent the Trustee, as mortgagee on behalf of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant Certificateholders, has an insurable interest and to the terms of the related Mortgage Loan Documents and is extent available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) all insurance coverage as to the insurance provider from whom is required under the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall Mortgage (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents);
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, the Mortgaged Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer Servicer, as applicable, in maintaining any such insurance shall not, solely for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust provision is in no way intended to enforce any obligations of affect amounts due and owing from the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy insuring against hazard losses on any or all of the Mortgage Loans Mortgaged Properties (in the case of the Master Servicer) or REO Properties, as applicableProperties (in the case of the Special Servicer), then, to the extent such policy (Ai) is obtained from a Qualified Insurer having that possesses (or whose obligations are guaranteed or backed, in writing, by an entity having) the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable, so covered, and the premium costs thereof shall be, if and to the extent they are specifically attributable either to a specific Mortgaged Property during any period that the related Borrower has failed to maintain the hazard insurance required under the related Mortgage Loan in respect of such Mortgaged Property or to a specific REO Property, a Servicing Advance reimbursable pursuant to and to the extent permitted under Section 3.05(a); provided that, to the extent that such premium costs are attributable to properties other than Mortgaged Properties and/or REO Properties or are attributable to Mortgaged Properties as to which the hazard insurance required under the related Mortgage Loan is being maintained, they shall be borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder Property, as applicable, a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyproperty specific policy (taking into account any deductible clause that would have been permitted therein), promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds (without any right of reimbursement from the Trust, reimbursement) the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such losses up to the difference between the amount of the deductible clause to in such blanket policy and the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence amount of any deductible clause that would have been permitted under such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)property specific policy. The Master Servicer and the Special Servicer shall each agree to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cii) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if If the Master Servicer has actual knowledge shall cause any Mortgaged Property or the Special Servicer shall cause any REO Property to be covered by a master single interest insurance policy naming the Master Servicer or the Special Servicer, as applicable, on behalf of any event the Trustee as the loss payee, then to the extent such policy (i) is obtained from a Qualified Insurer that possesses (or whose obligations are guaranteed or backed, in writing, by an “Insured Environmental Event”entity having) giving rise the Required Claims-Paying Ratings and (ii) provides protection equivalent to a claim under an Environmental Insurance Policythe individual policies otherwise required, the Master Servicer shall notify or the Special Servicer Servicer, as applicable, shall conclusively be deemed to have satisfied its obligation to cause such effect and insurance to be maintained on such Mortgaged Property (in the case of the Master Servicer) or REO Property (in the case of the Special Servicer). If the Master Servicer shall take reasonable actions cause any Mortgaged Property as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect related Borrower has failed to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policymaintain the required insurance coverage, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, or the Special Servicer shall notify cause any REO Property, to be covered by such master single interest insurance policy, then the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions incremental costs of such Environmental Insurance Policy insurance applicable to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each such Mortgaged Property or REO Property that (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether covered thereby) paid by the Master Servicer or the Special Servicer, as applicable, shall constitute a Servicing Advance. The Master Servicer shall, consistent with the Servicing Standard and the terms of the related Mortgage Loan documents, pursue the related Borrower for the amount of such incremental costs. All other costs associated with any such master single interest insurance policy (including, without limitation, any minimum or standby premium payable for such policy) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such master single interest insurance policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as applicable, shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property, as the case may be, a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such property specific policy had it been maintained, promptly deposit into the Collection Account from its own funds (without right of reimbursement) the amount not otherwise payable under the master single interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing AdvanceStandard.
(dc) The Each of the Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having recognized insurers that possess (or whose obligations are guaranteed or backed, in writing, by entities having) the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with would permit it to be a qualified ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) 30 days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations In addition, each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement keep in force with recognized insurers that possess (or Special whose obligations are guaranteed or backed, in writing, by entities having) the Required Claims-Paying Ratings, a policy or policies of insurance covering loss occasioned by the errors and omissions of its (and, in the case of the initial Master Servicer, its general partner's) officers and employees in connection with its obligation to service the Mortgage Loans for which it is responsible hereunder, which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Any such errors and omissions policy, if required, shall provide that it may not be canceled without 30 days' prior written notice to the Trustee.
(d) All insurance coverage required to be maintained under this Section 3.07 shall be obtained from Qualified Insurers.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Mortgage Capital Funding Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Serviced Loan, the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower each Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage maintain, and, if such Borrower the Mortgagor does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) maintained, for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due including each Mortgaged Property relating to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage any Specially Serviced Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably requirerequired, subject to applicable law, under the related Mortgage Loan Documentsloan documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any Mortgage Loan grants such loan documents permit the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Mortgagor is required to obtain the requisite insurance coveragemaintain, the Master Servicer shall (exercise such discretion in a manner consistent with the Servicing Standard and, prior to the date such existing insurance expires or is required to be renewed, the Master Servicer may, to the extent consistent with the Servicing Standard, take into account insurance in place at loan origination, with a view towards requiring insurance comparable to that required under other Serviced Loans with express provisions governing such matters and including business interruption or rental loss insurance for at least 12 months; and provided, further, that the Master Servicer shall be required to maintain such insurance coverage upon the related Mortgagor's failure to do so only to the extent that such insurance is available at commercially reasonable rates and the Trustee, on behalf of the Trust, as mortgagee has an insurable interest. Subject to Section 3.17(b), the Special Servicer shall also cause to be maintained for each REO Property (other than with respect to any REO Property related to a Non-Serviced Mortgage Loan) use efforts no less insurance coverage (to the extent available at commercially reasonable rates) (A) than was previously required of the related Mortgagor under the related loan documents and (B), at a minimum, (i) hazard insurance with a replacement cost rider, (ii) business interruption or rental loss insurance for at least 12 months, and (iii) commercial general liability insurance, in each case, in an amount customary for the type and geographic location of such REO Property and consistent with the Servicing Standard Standard; provided that all such insurance required to cause the related Borrower to obtain the requisite insurance coverage be maintained by Master Servicer or Special Servicer shall be obtained from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have a financial strength or claims-paying rating no obligation beyond using its reasonable efforts consistent with lower than two rating categories below the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standardhighest rated Certificates outstanding, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain no lower than "A2" from Moody's and "A" from S&P (or obtain in such other form and amount or issued by ▇▇ ▇▇▇urer with such other financial strength or claims-paying ability as would not, as confirmed in writing by the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardrelevant Rating Agency, result in an Adverse Rating Event. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a the Mortgage LoanLoans), or shall name the Trustee (and in the case of a Serviced Whole Loan the related Companion Loan Holder(s)) as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (and in the case of a Serviced Whole Loan the related Companion Loan Holder(s)) (in the case of insurance maintained in respect of REO Properties), and shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in into the Collection Certificate Account in accordance with Section 3.04or, if a Serviced Whole Loan is involved, the related Serviced Whole Loan Custodial Account, subject to withdrawal pursuant to Section 3.053.05(a), or Section 3.05(f), as applicable in the case of amounts received in respect of a Mortgage Serviced Loan, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Serviced Loan, notwithstanding that the terms of such Mortgage Serviced Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust or, if a Serviced Whole Loan is involved, on behalf of the related Companion Loan Holder(s), to enforce any obligations of the related Borrower Mortgagor under such Mortgage Serviced Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, by and reimbursable to, to the Master Servicer or the Special Servicer, as the case may be, as a Servicing Advance. If the related loan documents specifically and expressly set forth terms requiring insurance coverage against terrorist or similar acts for a Serviced Loan, then the Master Servicer and the Special Servicer shall enforce the terms of the related loan documents in accordance with the Servicing Standard, and if the Mortgagor fails to maintain such insurance, such failure shall constitute a Servicing Transfer Event. To the extent the loan documents do not set forth specific terms requiring insurance coverage against terrorist or similar acts and a Serviced Loan (x) requires a Mortgagor to maintain insurance policies covering some or all of the risks contained in the Additional Exclusions or (y) in accordance with the Servicing Standard, the Master Servicer has determined that the loan documents permit the lender to require the Mortgagor to maintain insurance policies covering some or all the risks contained in the Additional Exclusions (the covered risks required to be covered or that the lender has the discretion to require to be covered being referred to as "Covered Risks"), the Master Servicer shall use reasonable efforts in accordance with the Servicing Standard to determine whether, upon renewal of the Mortgagor's property or casualty insurance (including any all risk insurance policy), any of the Covered Risks are excluded from coverage. If any of the Covered Risks are determined by the Master Servicer to be excluded from coverage, the Master Servicer shall request the Mortgagor to either (i) purchase insurance acceptable to the Master Servicer in accordance with the Servicing Standard and in accordance with the related loan documents covering such Covered Risks or (ii) provide a written explanation as to its reasons for failing to purchase such insurance. Notwithstanding the foregoing, with the written consent of the Special Servicer in accordance with the Servicing Standard the Master Servicer may waive the requirement to procure insurance covering any of the Covered Risks if the Master Servicer determines in accordance with the Servicing Standard that (1) insurance covering any such Covered Risks is not available at a commercially reasonable price, or (2) based on information reasonably available to the Master Servicer, after due inquiry, any such Covered Risks are at that time not commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which the Mortgaged Property is located unless the Stated Principal Balance of the Serviced Loan is greater than $20,000,000. If the Stated Principal Balance of the Serviced Loan is greater than $20,000,000, then the Master Servicer must determine that the circumstances in both clauses (1) and (2) of the immediately preceding sentence apply prior to waiving the Mortgagor's requirement to procure insurance with respect to any Covered Risks. If the Special Servicer fails to give a response to the Master Servicer as referenced in the second preceding sentence within ten Business Days of the Master Servicer initially notifying the Special Servicer in writing of such request, the Master Servicer shall promptly notify the Directing Certificateholder of such failure of the Special Servicer to respond to such request. If the Directing Certificateholder and/or the Special Servicer have not responded to the Master Servicer within ten Business Days of the notice referenced in the immediately preceding sentence, the Master Servicer shall determine in accordance with the Servicing Standard whether to require (or not require) the Mortgagor to maintain such insurance; provided, that during the period that the Special Servicer and/or the Directing Certificateholder are evaluating such insurance, none of the Master Servicer, the Special Servicer and/or the Directing Certificateholder shall be liable for any loss related to its failure to require a Mortgagor to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure. If the Master Servicer requires the Mortgagor to maintain such insurance and the Mortgagor fails to maintain such insurance, to the extent such insurance is then reasonably available, the Master Servicer shall then procure such insurance in accordance with the Servicing Standard and such failure by the Mortgagor shall constitute a Servicing Transfer Event. For purposes of computing whether the $20,000,000 threshold described herein is met for a particular Serviced Loan, if a Serviced Loan is secured by multiple Mortgaged Properties, then the amount subject to the $20,000,000 threshold shall be the portion of the Stated Principal Balance of the related Serviced Loan pro rated based on an individual Mortgaged Property's appraised value as a percentage of the total appraised value of all of the related Mortgaged Properties.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-force placed policy insuring against hazard losses on all of the Mortgage Serviced Loans or REO Properties, as applicable, that it is required to service and administer hereunder, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having a financial strength or claims-paying rating no lower than "A2" from Moody's and "A" from S&P or having such other financial strength or cla▇▇▇-▇▇▇ing ability rating as would not, as confirmed in writing by the Required Claims-Paying Ratingsrelevant Rating Agency, result in an Adverse Rating Event and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-force placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Serviced Loan (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which that is consistent with the Servicing Standard). The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholdersthe Certificateholders and, in the case of a Serviced Whole Loan, the related Companion Loan Holder(s), claims under any such blanket or master force-forced placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or or REO Properties for which it is responsible exist as part of the Trust Fund) keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the Required Claims-Paying Ratingshighest rated Certificates outstanding, and in any event no lower than "A2" from Moody's and "A" from S&P, a fidelity bond in such form and amount as are consistent wo▇▇▇ ▇▇▇mit it to be a qualified Fannie Mae seller-servicer of multifamily mortgage loans (or in such ot▇▇▇ ▇▇rm and amount or issued by an insurer with such other financial strength or claims-paying ability rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Servicing StandardTrustee by the relevant Rating Agency)). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten days' prior written notice to the Trustee. Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (10or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Loans and/or REO Properties for which it is responsible exist as part of the Trust Fund) also keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than "A2" from Moody's and "A" from S&P, a policy or policies of insurance covering lo▇▇ ▇▇▇▇sioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified Fannie Mae seller-servicer of multifamily mortgage loans (or in such ot▇▇▇ ▇▇rm and amount or issued by an insurer with such other financial strength or claims-paying rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Trustee by the relevant Rating Agency)). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without ten days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or the Special Servicer (or its direct or indirect parent company), as applicable, are rated not lower than "A2" from Moody's and "A" from S&P, the Master Servicer or Special Servicer, as a▇▇▇▇▇▇▇le, may self-insure with respect to either or both of the fidelity bond coverage and the errors and omissions coverage required as described above, in which case it shall not be required to maintain an insurance policy with respect to such party’s corporacoverage.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Banc of America Commercial Mortgage Inc. Series 2006-1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the Master The Servicer shall use its reasonable best efforts consistent with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to by the terms of the related Mortgage Note, or if the Mortgagor does not so maintain, shall itself maintain, for each Mortgage Loan Documents all Insurance Policy coverage as is required under the related Mortgage (to the extent that the Trustee has an insurable interest and such Insurance Policy coverage is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) aboveStandards). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon if any Mortgage permits the Special Servicer’s determinationholder thereof to dictate to the Mortgagor the Insurance Policy coverage to be maintained on such Mortgaged Property, the Servicer shall impose such insurance requirements as are consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyStandards. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with maintain for each REO Property no less Insurance Policy coverage than was previously required of the Servicing Standard, to maintain with Qualified Insurers having Mortgagor under the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of related Mortgage Loan. All such Insurance Policies shall (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) contain a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage LoanLoans other than REO Properties), or shall (ii) be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, (iii) include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing Mortgaged Property or the REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions, (iv) include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents), (v) be noncancellable without 30 days prior written notice to the insured party and (vi) be issued by a Qualified Insurer authorized under applicable law to issue such Insurance Policies. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies Insurance Policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing StandardStandards and the provisions of the related Mortgage Loan) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c3.05(a), in the case of amounts received in respect of an REO Property. Any cost costs incurred by the Master Servicer or Special Servicer in maintaining any such insurance Insurance Policies in respect of Mortgage Loans (other than REO Properties)
(i) if the Mortgagor defaults on its obligation to do so, shall be advanced by the Servicer as a Servicing Advance and will be charged to the related Mortgagor and (ii) shall not, for purposes hereofthereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit . Any cost incurred by the rights of the Master Servicer or Special Servicer on behalf in maintaining any such Insurance Policies with respect to REO Properties shall be an expense of the Trust to enforce any obligations payable out of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies REO Account pursuant to this Section 3.07 shall (subject to Section 3.11(h3.16(c) and Section 3.19(b)) be paid byor, and reimbursable toif the amount on deposit therein is insufficient therefor, advanced by the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy Insurance Policy with a Qualified Insurer insuring against fire and hazard losses on all of the Mortgage Loans or REO Properties, as applicablethe case may be, required to be serviced and administered hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) Insurance Policy provides protection equivalent to the individual policies otherwise required herein and in required, the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause fire and hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy Insurance Policy may contain a deductible clause (not in excess of a customary amount)clause, in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, Servicer shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a fire and hazard insurance policy Insurance Policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyInsurance Policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with of such loss or losses that would have been covered under the individual policy but are not covered under the blanket Insurance Policy because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (orLoan, or in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master In connection with its activities as administrator and Servicer and of the Special Mortgage Loans, the Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it Insurance Policy in a timely fashion in accordance with the terms of such policy. The Special Servicer, to the extent consistent with the Servicing Standards, may maintain, earthquake insurance on REO Properties, provided coverage is available at commercially reasonable rates, the cost of which shall be a Servicing Advance.
(ii) If the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by a master single interest or force-placed insurance policy with a Qualified Insurer naming the Servicer or the Special Servicer on behalf of the Trustee as the loss payee, then to the extent such Insurance Policy provides protection equivalent to the individual policies otherwise required, the Servicer or the Special Servicer shall conclusively be deemed to have satisfied its obligation to cause such insurance to be maintained on the related Mortgage Properties and REO Properties. In the event the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by such master single interest or force-placed insurance policy, the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) shall be paid by the Servicer as a Servicing Advance. Such master single interest or force-placed policy may contain a deductible clause, in which case the Servicer or the Special Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such policy had it been maintained, deposit into the Certificate Account from its own funds the amount not otherwise payable under the master single or force-placed interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing Standard.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master term of this Agreement a blanket fidelity bond and an errors and omissions Insurance Policy with a Qualified Insurer covering the Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard 's and the terms Special Servicer's, as applicable, officers and conditions employees and other persons acting on behalf of such Environmental Insurance Policy to make a claim thereunder the Servicer and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer in connection with its activities under this Agreement. Notwithstanding the foregoing, so long as the long term debt or the deposit obligations or claims-paying ability of the Servicer (or its immediate or remote parent; provided that the Servicer has actual knowledge received written confirmation from each Rating Agency that such self insurance by an immediate or remote parent will not cause the downgrade, qualification or withdrawal of any event giving rise the then current ratings of the Certificates) is rated at least "A" by S&P and Fitch, the Servicer shall be allowed to provide self-insurance with respect to a claim under fidelity bond and an Environmental Errors and Omissions Insurance Policy. The amount of coverage shall be at least equal to the coverage that would be required by FNMA or FHLMC, whichever is greater, with respect to the Servicer or the Special Servicer shall take reasonable actions as are in accordance with if the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer, as applicable, were servicing and administering the Mortgage Loans or Specially Serviced Mortgage Loans, as applicable, for FNMA or FHLMC. Coverage of the Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of the Servicer or the Special Servicer and providing the coverage required by this Section 3.07(c) shall be (subject satisfy the requirements of this Section 3.07(c). The Special Servicer and the Servicer will promptly report in writing to Section 3.11(h) the Trustee any material changes that may occur in their respective fidelity bonds, if any, and/or their respective errors and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Serviceromissions Insurance Policies, as the case may be, as a Servicing Advance.
(d) and will furnish to the Trustee copies of all binders and policies or certificates evidencing that such bonds, if any, and insurance policies are in full force and effect. The Master Servicer and the Special Servicer shall each at all times during cause the term Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Agreement Section 3.07(c).
(ord) During all such times as any Mortgaged Property shall be in a federally designated special flood hazard area (and such flood insurance has been made available), the Servicer will use its reasonable best efforts to cause the related Mortgagor (in accordance with applicable law and the case terms of the Special ServicerMortgage Loan documents) to maintain, and, if the related Mortgagor shall default in its obligation to so maintain, shall itself maintain to the extent available at all times during commercially reasonable rates (as determined by the term Servicer in accordance with the Servicing Standards), flood insurance in respect thereof, but only to the extent the related Mortgage Loan permits the mortgagee to require such coverage and the maintenance of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are coverage is consistent with the Servicing StandardStandards. 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 insurance which is available under the National Flood Insurance Act of 1968, as amended. If the cost of any insurance described above is not borne by the Mortgagor, the Servicer shall promptly make a Servicing Advance for such costs.
(e) During all such times as any REO Property shall be located in a federally designated special flood hazard area, the Special Servicer will cause to be maintained, to the extent available at commercially reasonable rates (as determined by the Special Servicer in accordance with the Servicing Standards), a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration in an amount representing coverage not less than the maximum amount of insurance which is available under the National Flood Insurance Act of 1968, as amended. The Master Servicer or Special Servicer cost of any such flood insurance with respect to an REO Property shall be deemed an expense of the Trust payable out of the related REO Account pursuant to have complied with Section 3.16(c) or, if the foregoing provision if an Affiliate thereof has such fidelity bond coverage andamount on deposit therein is insufficient therefor, paid by the terms of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaa Servicing Advance.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Chase Manhattan Bk First Union Na Bk Com Mor Tr Ser 1999-1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts (with respect to Mortgage Loans and Companion Loans to the extent that the Trust Fund has an insurable interest, but other than the 2004-C15 Serviced Mortgage Loans and their related Companion Loans) and the Special Servicer (with respect to REO Properties to the extent that the Trust Fund has an insurable interest) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard; and provided, further, that, if and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, extent that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisora Mortgage so permits, the Special Servicer will not related Mortgagor shall be required to do so. If any such approval of exercise its reasonable best efforts to obtain the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt required insurance coverage from the Master Servicer of the Master Servicer’s determination Qualified Insurers and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation required insurance coverage obtained by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable from Qualified Insurers. REO Property with respect to the 175 West Jackson Loan and 180 Maiden Lane Loan is excluded for all pu▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇ection 3.0▇. ▇▇▇ ▇▇▇▇ ▇▇ any loss related to its failure to require such insurance coverage obtained by either the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify or the Special ServicerServicer shall be a Servicing Advance to be paid by the Master Servicer pursuant to Section 3.03. Whether or not the applicable Mortgage Loan documents require such insurance, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if may request that earthquake insurance be secured for one or more Mortgaged Properties at the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest expense of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyMajority Subordinate Certificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, also cause to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan DocumentsMortgage; provided, however, provided that the Special Servicer all such insurance shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardobtained from Qualified Insurers. All such insurance policies maintained as described above by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “"standard” " mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, or Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan document; and (vii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan or Companion Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loans so permit; provided, however, that this sentence shall not limit . Notwithstanding the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toforegoing, the Master Servicer or Special Servicer, as applicable, will not be required to maintain (and in the case may beof the Special Servicer, with respect any Specially Serviced Mortgage Loan), and shall not cause a Mortgagor to be in default with respect to the failure of the related Mortgagor to obtain, all-risk casualty insurance which does not contain any carve-out for terrorist or similar acts, if and only if the Master Servicer with respect to non-Specially Serviced Mortgage Loans or the Special Servicer with respect to Specially Serviced Mortgage Loans, in consultation with the Controlling Class Representative, and, with respect to each Co-Lender Loan (other than the 175 West Jackson Loan and the 180 Maiden Lane Loan), in consultation ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ Companion Hol▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ under the applicable Intercreditor Agreement, has determined in accordance with the Servicing Standard that either (a) such insurance is not available at any rate or (b) such insurance is not available at commercially reasonably rates and that such hazards are not at the time commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which such Mortgaged Property is located and the Controlling Class Representative has approved the decision not to require the borrower to maintain terrorism insurance (provided, that the decision of the Controlling Class Representative to grant or withhold such consent shall be disregarded by the Special Servicer if such consent or lack of consent would cause the Master Servicer or the Special Servicer, as a applicable, to violate the Servicing AdvanceStandard); provided, however, the Controlling Class Representative's approval shall be deemed to have been given if it has not responded within five Business Days of receipt of the Master Servicer's or the Special Servicer's written recommendation and the information upon which such recommendation is based; provided, further, that upon the Master Servicer's or the Special Servicer's determination, as applicable, consistent with the Servicing Standard, that exigent circumstances do not allow the Master Servicer or the Special Servicer to consult with the Controlling Class Representative or Companion Holder, if applicable, the Master Servicer or the Special Servicer, as applicable, shall not be required to do so.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans, Companion Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without for ten (10) days’ prior ' written notice to the TrusteeTrustee prior to any cancellation. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification, downgrade or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten days' written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct or indirect parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Wachovia Bank Commercial Mortgage Trust Series 2005-C16)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Property Manager (other than with respect to Specially Managed Units) and the case of each Mortgage Loan, the Master Special Servicer (with respect to Specially Managed Units) shall use reasonable efforts consistent in accordance with the Servicing Standard to cause the related Tenant or Borrower to maintain (including identifying the extent to which a Borrower is maintaining for each Property all insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Lease or Mortgage Loan Documents and is available at commercially reasonable rates;
Loan, as applicable (B) including for the avoidance of doubt, any Environmental Policy); provided, that if and to the extent that any such Lease or Mortgage Loan grants permits the lender lessor thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Tenant or Borrower is required to obtain the requisite insurance coveragemaintain, the Master Servicer Property Manager or the Special Servicer, as the case may be, shall (to the extent exercise such discretion in a manner consistent with the Servicing Standard) use efforts consistent , with a view towards requiring insurance comparable to that required under other similar leases or mortgage loans with express provisions governing such matters; and provided, further, that, if and to the Servicing Standard to cause extent that a Lease or Mortgage Loan so permits, the related Tenant or Borrower shall be required to obtain the requisite required insurance coverage from Qualified Insurers thatthat have a claims-paying ability rated at least “A:VIII” by ▇.▇. ▇▇▇▇’s Key Rating Guide. If such Tenant or Borrower does not maintain the required insurance or, with respect to any Environmental Policy in each caseplace as of the related Series Closing Date or Transfer Date, have the Required Claims-Paying Ratings at the time Property Manager will itself cause such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or with Qualified Insurers; provided, that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer Manager shall not be required to maintain such insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to Indenture Trustee (as mortgagee of record on behalf of the related Mortgaged Property (iNoteholders) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist have an insurable interest or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer Property Manager has determined (in its reasonable judgment based on inquiry consistent in accordance with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (ai) such insurance is not available at a commercially reasonable rates rate and that such the subject hazards are not at the time not commonly insured against for by prudent owners of properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, located or (bii) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”)rate. The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer shall also use reasonable efforts to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not cause to be maintained for each REO Property no less property insurance coverage than was previously required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative Tenant or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents or Lease and such failure materially at a minimum, (i) hazard insurance with a replacement cost rider and adversely affects such Mortgage Loan and/or the interest of the Trust (ii) comprehensive general liability insurance, in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciationcase, in an amount that is at least equal to customary for the lesser type and geographic location of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard; provided, that all such insurance shall be obtained from Qualified Insurers that, if they are providing casualty insurance, shall have a claims-paying ability rated at least “A-:VIII” by A.M. Best’s Key Rating Guide. The cost of any such insurance coverage obtained by either the Property Manager or the Special Servicer shall be a Property Protection Advance to be paid by the Property Manager. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf Property Manager, as agent of and for the account of the applicable Issuer and the Indenture Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer Property Manager or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerTenant, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account 2.11 of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing AdvanceIndenture.
(b) The Property Manager or Special Servicer may satisfy its obligations under Section 3.06(a) by obtaining, maintaining or causing to be maintained a blanket or forced place insurance policy. If (i) applicable, the Master Servicer Property Manager or the Special Servicer shall obtain and maintain, or cause to be obtained and maintainedmaintained on behalf of each applicable Issuer, a master forced place insurance policy or a blanket policy (or master force-placed policy an endorsement to an existing policy) insuring against hazard losses (not otherwise insured by a Tenant or Borrower due to a default by such Tenant or Borrower under the insurance covenants of its Lease or Mortgage Loan or because a Tenant or Borrower permitted to self-insure fails to pay for casualty losses) on all of the Mortgage Loans or REO Propertiesapplicable Properties that it is required to service and administer, as applicable, then, to the extent such which policy shall (Ai) is be obtained from a Qualified Insurer having the Required Claimsa claims-Paying Ratingspaying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, and (Bii) provides provide protection equivalent to the individual policies otherwise required herein under Section 3.06(a). The Property Manager and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer shall bear the cost of any premium payable in respect of any such blanket policy (other than blanket policies specifically obtained for Properties or its corporate parentREO Properties) has long-term unsecured debt obligations without right of reimbursement; provided, that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and if the Master Servicer Property Manager or the Special Servicer, as the case may be, self-insures for its obligation causes any Property or REO Property to maintain the individual policies otherwise requiredbe covered by such blanket policy, the Master Servicer incremental costs of such insurance applicable to such Property or REO Property shall constitute, and be reimbursable as, a Property Protection Advance to the extent that, except with respect to an REO Property, such blanket policy provides insurance that the related Tenant or Borrower, as applicable, has failed to maintain. If the Property Manager or Special Servicer, as the case may beapplicable, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance causes any Property or REO Property to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such covered by a blanket or master force-placed insurance policy, the incremental costs of such insurance applicable to such Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Property or REO Property is covered thereby) shall be paid as a Property Protection Advance. Such policy may contain a deductible clause (not in excess of a customary amount), ) in which case the Master Servicer Property Manager or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any Mortgaged the related Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), 3.06(a) and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and Property Manager or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Indenture Trustee and Certificateholdersthe applicable Issuer, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy. Any payments on such policy shall be made to the Property Manager as agent of and for the account of the applicable Issuer, the Noteholders and the Indenture Trustee.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer Manager and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or REO Properties Managed Units exist as part of the Trust FundCollateral) keep in force with a Qualified Insurer having the Required Claims-Paying Ratingsa claims paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a fidelity bond in such form and amount as are consistent with would not adversely affect any rating assigned by any Rating Agency to the Servicing StandardNotes (as evidenced in writing from each Rating Agency). The Master Servicer or Each of the Property Manager and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer Property Manager or the Special Servicer, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to each Issuer. Each of the TrusteeProperty Manager and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Managed Units exist as part of the Collateral) also keep in force with a Qualified Insurer having a claims-paying ability rated at least “A: VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall name the Indenture Trustee as an additional insured and shall be in such form and amount as would not adversely affect any rating assigned by any Rating Agency to the Notes (as evidenced in writing from each Rating Agency). So long Each of the Property Manager and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Property Manager or the Special Servicer, as the longcase may be. Any such errors and omissions policy shall provide that it may not be canceled without ten (10) days’ prior written notice to each Issuer. The Back-term unsecured debt obligations of the Master Servicer Up Manager (whether as Back-Up Manager, Property Manager or Special Servicer) shall at all times during the term of this Agreement maintain insurance in conformity with market requirements and shall keep in force with a Qualified Insurer having a claims paying ability rated by at least one of the following Rating Agencies of at least (a) “A3” by Moody’s, (b) “A-” by S&P, (c) “A-” by Fitch or (d) “A:X” by A.M. Best Company, Inc., (i) a fidelity bond (employee dishonesty insurance) in such partyform and amount as is consistent with the Servicing Standard, and (ii) a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as is consistent with the Servicing Standard. The Back-Up Manager shall cause any awards or other amounts payable under such policy or policies that result from the errors or omissions of its officers and employees in connection with its servicing obligations hereunder to be promptly remitted to the Indenture Trustee for application in accordance with the Indenture. The Back-Up Manager shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond and/or errors and omissions coverage and, by the terms of such fidelity bond and/or errors and omissions policy, the coverage afforded thereunder extends to the Property Manager or the Special Servicer, as the case may be. Each of the Property Manager and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Managed Units exist as part of the Collateral) also, on behalf of each Issuer, keep in force with a Qualified Insurer having a claims-paying ability rated at least “A:VIII” by A.M. Best’s corporaKey Rating Guide and at least “A” by S&P, a lessor’s general liability insurance policy or policies, which policy or policies shall be in such form and amount as would not adversely affect any rating assigned by any Rating Agency to the Notes without giving effect to any Insurance Policy (as evidenced in writing from each Rating Agency). Any such general liability insurance policy shall provide that it may not be canceled without ten (10) days’ prior written notice to each Issuer and the Indenture Trustee. Any payments on such policy shall be made to the Property Manager as agent of and for the account of any applicable Issuer and the Indenture Trustee. If the Property Manager (or its corporate parent), the Special Servicer (or its corporate parent) or the Back-Up Manager (or its corporate parent), as applicable, are rated not lower than “A” by S&P, the Property Manager, the Special Servicer or the Back-Up Manager, as applicable, may self-insure with respect to any insurance coverage or fidelity bond coverage required hereunder, in which case it shall not be required to maintain an insurance policy with respect to such coverage; provided, that STORE Capital may not self-insure with respect to any such insurance coverage or fidelity bond.
Appears in 1 contract
Sources: Property Management and Servicing Agreement (Store Capital LLC)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts (with respect to Mortgage Loans other than Specially Serviced Mortgaged Loans) and the Special Servicer (with respect to Specially Serviced Mortgage Loans) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard; and provided further that, if and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, extent that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisora Mortgage so permits, the Special Servicer will not related Mortgagor shall be required to do so. If any such approval exercise its reasonable best efforts to obtain the required insurance coverage from Qualified Insurers that have a "claims paying ability" rating of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt at least "A" from the Master Servicer of the Master Servicer’s determination Standard & Poor's and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurancecomparable rating from at least one other nationally recognized statistical rating agency. The Master Servicer shall notify Majority Subordinate Certificateholder may request that earthquake insurance be secured for one or more Mortgaged Properties at the Special Servicer, the Trustee, the Subordinate Class Representative and expense of the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyCertificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with also cause to be maintained for each REO Property no less insurance coverage than was previously required of the Servicing Standard, to maintain with Mortgagor under the related Mortgage; provided that all such insurance shall be obtained from Qualified Insurers having the Required Claims-Paying Ratings (a) that, if they are providing casualty insurance, shall have a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period claims paying ability rating of at least twelve "A" and "A2" from Standard & Poor's and Moody's (12if then rated by Moody's), respectively (or Standard & Poor's and a comparable rating from one other nationally recognized statistical rating agency, if such insurer is not rated by Moody's) monthsor such lower rating as will not result in qualification, in each case if so required pursuant downgrading or withdrawal of the ratings then assigned to the related Mortgage Loan Documents; providedCertificates, however, that as evidenced in writing by the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing StandardRating Agencies. All such insurance policies maintained as described above (i) shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, or Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; and (iv) in each case such insurance shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having a claims-paying rating (or guaranteed by or backed in writing by a company having such claims-paying rating) of at least "A" and "A2" from Standard & Poor's and Moody's, respectively (or Standard & Poor's and a comparable rating from one other nationally recognized statistical rating agency, if such insurer is not rated by Moody's) or such lower rating of any Rating Agency or rating from any other nationally recognized statistical rating agency as will not result in qualification, downgrading or withdrawal of the Required Claims-Paying Ratingsratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 1 contract
Sources: Pooling and Servicing Agreement (First Union Commercial Mortgage Securities Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts (with respect to Mortgage Loans and Companion Loans other than Specially Serviced Mortgaged Loans) and the Special Servicer (with respect to Specially Serviced Mortgage Loans) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard; and provided further that, if and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, extent that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisora Mortgage so permits, the Special Servicer will not related Mortgagor shall be required to do so. If any such approval of exercise its reasonable best efforts to obtain the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt required insurance coverage from the Master Servicer of the Master Servicer’s determination Qualified Insurers and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation required insurance coverage obtained by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurancefrom Qualified Insurers. The cost of any such insurance coverage obtained by either the Master Servicer shall notify or the Special Servicer, Servicer shall be a Servicing Advance to be paid by the Trustee, Master Servicer pursuant to Section 3.03. The Majority Subordinate Certificateholder may request that earthquake insurance be secured for one or more Mortgaged Properties at the Subordinate Class Representative and expense of the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyCertificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, also cause to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan DocumentsMortgage; provided, however, provided that the Special Servicer all such insurance shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardobtained from Qualified Insurers. All such insurance policies maintained as described above by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “"standard” " mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, or Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; (iv) include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); and (vi) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan or Companion Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loans so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans, Companion Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without for ten (10) days’ prior ' written notice to the TrusteeTrustee prior to any cancellation. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification, downgrade or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten days' written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct or indirect parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (First Union Commercial Mortgage Pass THR Cer Ser 2001-C3)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan (including each Specially Serviced Mortgage Loan), the applicable Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage maintain, and, if such Borrower does not so maintain, the such Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) maintained, for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably requirerequired, subject to applicable law, under the related Mortgage Loan Documents; provided that, if and to the extent that all any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the following conditions and/or limitations shall apply:
(A) insurance coverage that the related Borrower is required to maintain, the applicable Master Servicer shall not be exercise such discretion in a manner consistent with the Servicing Standard, with a view towards requiring insurance comparable to that required to maintain under other Mortgage Loans with express provisions governing such matters and, in any earthquake event, business interruption or environmental rental loss insurance policy on any Mortgaged Property unless such insurance policy was in effect for at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents least 12 months; and is available at commercially reasonable rates;
(B) provided, further, that, if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower borrower is to obtain the requisite insurance coverage, the applicable Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause require the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have a financial strength or claims-paying rating no lower than two rating categories below the Required Claimshighest rated Certificates outstanding, and in any event no lower than "A" from S&P and "A2" from M▇▇▇▇'▇ (or in such other form and amount or issued by an insurer with such other financial strength or claims-Paying Ratings at paying ability as would not, as confirmed in writing by the time relevant Rating Agency, result in an Adverse Rating Event); and provided, further, that, in the case of any Mortgage Loan, the applicable Master Servicer shall be required to maintain such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under upon the related Mortgage Loan Documents;
(D) in no event shall Borrower's failure to do so only to the Master Servicer be required to cause the Borrower to maintain, or itself obtain, extent that such insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at Trustee as mortgagee has an insurable interest. Subject to Section 3.17(b), the time commonly insured against at the then-available rates applicable Special Servicer shall also cause to be maintained for properties similar to the related Mortgaged each REO Property and located in or around the region in which the related Mortgaged Property is located;
no less insurance coverage (E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (brates) such insurance is not available at any rate (failure to maintain than was previously required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b)and, and/or 3.24at a minimum, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full hazard insurance with a replacement cost of improvements at such REO Property or rider, (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve 12 months, and (12iii) monthscommercial general liability insurance, in each case if so required pursuant to case, in an amount customary for the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates type and geographic location of such REO Property and consistent with the Servicing Standard; provided that all such insurance shall be obtained from Qualified Insurers that, in each case, shall have a financial strength or claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than "A" from S&P and "A2" from M▇▇▇▇'▇ (or in such other form and amount or issued by an insurer with such other financial strength or claims-paying ability as would not, as confirmed in writing by the relevant Rating Agency, result in an Adverse Rating Event). All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the applicable Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan), or shall name the Trustee as the insured, with loss payable to the applicable Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of an REO Property), and shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the a Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04of the applicable Master Servicer, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the applicable Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the a Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the a Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the a Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, by and reimbursable to, the to such Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the a Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-force placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, as to which it is the applicable Master Servicer or Special Servicer, as the case may be, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having a financial strength or claims-paying rating no lower than "A" from S&P and "A2" from M▇▇▇▇'▇ or having such other financial strength or claims-paying ability rating as would not, as confirmed in writing by the Required Claims-Paying Ratingsrelevant Rating Agency, result in an Adverse Rating Event, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the required, such Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-force placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever that maintains such policy, policy shall, if there shall not have been maintained on any Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the applicable Master Servicer, from its own funds without any right of reimbursement from the Trustfunds, the amount not otherwise payable under the blanket or master force-force placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Each Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-force placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With Within 45 days after the Closing Date, with respect to each Performing of the Mortgage Loan that is subject to Loans covered by an Environmental Insurance Policy that are listed on Exhibit B-4 to this Agreement, the applicable Master Servicer shall notify the insurer under such Environmental Insurance Policy and take all other action necessary for the Trustee, on behalf of the Certificateholders, to be an insured (and for such Master Servicer, on behalf of the Trust, to make claims) under such Environmental Insurance Policy, if . In the event that the applicable Master Servicer has actual knowledge of any event (an “"Insured Environmental Event”") giving rise to a claim under an any Environmental Insurance PolicyPolicy in respect of any Mortgage Loan covered thereby, the applicable Master Servicer shall notify shall, in accordance with the Special Servicer to terms of such effect Environmental Insurance Policy and the Master Servicer Servicing Standard, timely make a claim thereunder with the appropriate insurer and shall take reasonable such other actions as are in accordance with the Servicing Standard and the terms and conditions of which are necessary under such Environmental Insurance Policy in order to make a claim thereunder and achieve realize the payment full value thereof for the benefit of all amounts to which the Trust is entitled thereunderCertificateholders. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer If any other party hereto has actual knowledge of an Insured Environmental Event with respect to any event giving rise Mortgage Loan listed on Exhibit B-4 to a claim under an Environmental Insurance Policythis Agreement, the Special Servicer such party shall promptly so notify the applicable Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees fees, premiums or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any such claim under an Environmental Insurance Policy described above (whether shall be paid by the applicable Master Servicer or the Special Servicer) and shall be (subject reimbursable to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable toit as a Servicing Advance. With respect to each Environmental Insurance Policy that relates to one or more Mortgage Loans, the applicable Master Servicer shall review and familiarize itself with the terms and conditions relating to enforcement of claims and shall monitor the dates by which any claim must be made or any action must be taken under such policy in order to realize the full value thereof for the benefit of the Certificateholders in the event the applicable Master Servicer has actual knowledge of an Insured Environmental Event giving rise to a claim under such policy. In the event that the applicable Master Servicer receives notice of any termination of any Environmental Insurance Policy that relates to one or more Mortgage Loans, such Master Servicer shall, within five Business Days after receipt of such notice, notify the applicable Special Servicer, the Controlling Class Representative, the Rating Agencies and the Trustee of such termination in writing. Upon receipt of such notice, the applicable Master Servicer shall address such termination in accordance with Section 3.07(a) in the same manner as it would the case may betermination of any other Insurance Policy required under the related Mortgage Loan Documents. Any legal fees, premiums or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with a resolution of such termination of an Environmental Insurance Policy shall be paid by the applicable Master Servicer and shall be reimbursable to it as a Servicing Advance.
(d) The Each of the Master Servicer Servicers and the Special Servicer Servicers shall each at all times during the term of this Agreement (or, in the case of the a Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties as to which it is the applicable Special Servicer exist as part of the Trust Fund) keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the Required Claims-Paying Ratingshighest rated Certificates outstanding, and in any event no lower than "A" from S&P and "A2" from M▇▇▇▇'▇, a fidelity bond in such form and amount as are consistent would permit it to be a qualified F▇▇▇▇▇ M▇▇ seller-servicer of multifamily mortgage loans (or in such other form and amount or issued by an insurer with such other financial strength or claims-paying ability rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Servicing StandardTrustee by the relevant Rating Agency)). The A Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms of such fidelity bond, the coverage afforded thereunder extends to the such Master Servicer or the Special Servicer, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations Each of the Master Servicers and Special Servicers shall at all times during the term of this Agreement (or, in the case of a Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties as to which it is the applicable Special Servicer exist as part of the Trust Fund) also keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than "A" from S&P and "A2" from M▇▇▇▇'▇, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified F▇▇▇▇▇ M▇▇ seller-servicer of multifamily mortgage loans (or in such other form and amount or issued by an insurer with such other financial strength or claims-paying rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Trustee by the relevant Rating Agency)). A Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to such Master Servicer or Special Servicer, or as the case may be. Any such party’s corporaerrors and omissions policy shall provide that it may not be canceled without ten days' prior written notice to the Trustee.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Commercial Mortgage Pass THR Cert Ser 2001-Ckn5)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Property Manager (other than with respect to Specially Managed Units) and the case of each Mortgage Loan, the Master Special Servicer (with respect to Specially Managed Units) shall use reasonable efforts consistent in accordance with the Servicing Standard to cause the related Tenant or Borrower to maintain (including identifying the extent to which a Borrower is maintaining for each Property all insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Lease or Mortgage Loan Documents and is available at commercially reasonable rates;
Loan, as applicable (B) including for the avoidance of doubt, any Environmental Policy); provided, that if and to the extent that any such Lease or Mortgage Loan grants permits the lender lessor thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Tenant or Borrower is required to obtain the requisite insurance coveragemaintain, the Master Servicer Property Manager or the Special Servicer, as the case may be, shall (to the extent exercise such discretion in a manner consistent with the Servicing Standard) use efforts consistent , with a view towards requiring insurance comparable to that required under other similar leases or mortgage loans with express provisions governing such matters; and provided, further, that, if and to the Servicing Standard to cause extent that a Lease or Mortgage Loan so permits, the related Tenant or Borrower shall be required to obtain the requisite required insurance coverage from Qualified Insurers thatthat have a claims-paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide. If such Tenant or Borrower does not maintain the required insurance or, with respect to any Environmental Policy in each caseplace as of the related Series Closing Date or Transfer Date, have the Required Claims-Paying Ratings at the time Property Manager will itself cause such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or with Qualified Insurers; provided, that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer Manager shall not be required to maintain such insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to Indenture Trustee (as mortgagee of record on behalf of the related Mortgaged Property (iNoteholders) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist have an insurable interest or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer Property Manager has determined (in its reasonable judgment based on inquiry consistent in accordance with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (ai) such insurance is not available at a commercially reasonable rates rate and that such the subject hazards are not at the time not commonly insured against for by prudent owners of properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, located or (bii) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”)rate. The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer shall also use reasonable efforts to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not cause to be maintained for each REO Property no less property insurance coverage than was previously required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative Tenant or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents or Lease and such failure materially at a minimum, (i) hazard insurance with a replacement cost rider and adversely affects such Mortgage Loan and/or the interest of the Trust (ii) comprehensive general liability insurance, in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciationcase, in an amount that is at least equal to customary for the lesser type and geographic location of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard; provided, that all such insurance shall be obtained from Qualified Insurers that, if they are providing casualty insurance, shall have a claims-paying ability rated at least “A-:VIII” by A.M. Best’s Key Rating Guide. The cost of any such insurance coverage obtained by either the Property Manager or the Special Servicer shall be a Property Protection Advance to be paid by the Property Manager. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf Property Manager, as agent of and for the account of the applicable Issuer and the Indenture Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer Property Manager or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerTenant, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account 2.11 of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing AdvanceIndenture.
(b) The Property Manager or Special Servicer may satisfy its obligations under Section 3.06(a) by obtaining, maintaining or causing to be maintained a blanket or forced place insurance policy. If (i) applicable, the Master Servicer Property Manager or the Special Servicer shall obtain and maintain, or cause to be obtained and maintainedmaintained on behalf of each applicable Issuer, a master forced place insurance policy or a blanket policy (or master force-placed policy an endorsement to an existing policy) insuring against hazard losses (not otherwise insured by a Tenant or Borrower due to a default by such Tenant or Borrower under the insurance covenants of its Lease or Mortgage Loan or because a Tenant or Borrower permitted to self-insure fails to pay for casualty losses) on all of the Mortgage Loans or REO Propertiesapplicable Properties that it is required to service and administer, as applicable, then, to the extent such which policy shall (Ai) is be obtained from a Qualified Insurer having the Required Claimsa claims-Paying Ratingspaying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, and (Bii) provides provide protection equivalent to the individual policies otherwise required herein under Section 3.06(a). The Property Manager and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer shall bear the cost of any premium payable in respect of any such blanket policy (other than blanket policies specifically obtained for Properties or its corporate parentREO Properties) has long-term unsecured debt obligations without right of reimbursement; provided, that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and if the Master Servicer Property Manager or the Special Servicer, as the case may be, self-insures for its obligation causes any Property or REO Property to maintain the individual policies otherwise requiredbe covered by such blanket policy, the Master Servicer incremental costs of such insurance applicable to such Property or REO Property shall constitute, and be reimbursable as, a Property Protection Advance to the extent that, except with respect to an REO Property, such blanket policy provides insurance that the related Tenant or Borrower, as applicable, has failed to maintain. If the Property Manager or Special Servicer, as the case may beapplicable, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance causes any Property or REO Property to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such covered by a blanket or master force-placed insurance policy, the incremental costs of such insurance applicable to such Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Property or REO Property is covered thereby) shall be paid as a Property Protection Advance. Such policy may contain a deductible clause (not in excess of a customary amount), ) in which case the Master Servicer Property Manager or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any Mortgaged the related Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), 3.06(a) and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and Property Manager or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Indenture Trustee and Certificateholdersthe applicable Issuer, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy. Any payments on such policy shall be made to the Property Manager as agent of and for the account of the applicable Issuer, the Noteholders and the Indenture Trustee.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer Manager and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or REO Properties Managed Units exist as part of the Trust FundCollateral) keep in force with a Qualified Insurer having the Required Claims-Paying Ratingsa claims paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a fidelity bond in such form and amount as are consistent with would not adversely affect any rating assigned by any Rating Agency to the Servicing StandardNotes (as evidenced in writing from each Rating Agency). The Master Servicer or Each of the Property Manager and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer Property Manager or the Special Servicer, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to each Issuer. Each of the TrusteeProperty Manager and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Managed Units exist as part of the Collateral) also keep in force with a Qualified Insurer having a claims-paying ability rated at least “A: VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall name the Indenture Trustee as an additional insured and shall be in such form and amount as would not adversely affect any rating assigned by any Rating Agency to the Notes (as evidenced in writing from each Rating Agency). So long Each of the Property Manager and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Property Manager or the Special Servicer, as the longcase may be. Any such errors and omissions policy shall provide that it may not be canceled without ten (10) days’ prior written notice to each Issuer. The Back-term unsecured debt obligations of the Master Servicer Up Manager (whether as Back-Up Manager, Property Manager or Special Servicer) shall at all times during the term of this Agreement maintain insurance in conformity with market requirements and shall keep in force with a Qualified Insurer having a claims paying ability rated by at least one of the following Rating Agencies of at least (a) “A3” by M▇▇▇▇’▇, (b) “A-” by S&P, (c) “A-” by Fitch or (d) “A:X” by A.M. Best Company, Inc., (i) a fidelity bond (employee dishonesty insurance) in such partyform and amount as is consistent with the Servicing Standard, and (ii) a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as is consistent with the Servicing Standard. The Back-Up Manager shall cause any awards or other amounts payable under such policy or policies that result from the errors or omissions of its officers and employees in connection with its servicing obligations hereunder to be promptly remitted to the Indenture Trustee for application in accordance with the Indenture. The Back-Up Manager shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond and/or errors and omissions coverage and, by the terms of such fidelity bond and/or errors and omissions policy, the coverage afforded thereunder extends to the Property Manager or the Special Servicer, as the case may be. Each of the Property Manager and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Managed Units exist as part of the Collateral) also, on behalf of each Issuer, keep in force with a Qualified Insurer having a claims-paying ability rated at least “A:VIII” by A.M. Best’s corporaKey Rating Guide and at least “A” by S&P, a lessor’s general liability insurance policy or policies, which policy or policies shall be in such form and amount as would not adversely affect any rating assigned by any Rating Agency to the Notes without giving effect to any Insurance Policy (as evidenced in writing from each Rating Agency). Any such general liability insurance policy shall provide that it may not be canceled without ten (10) days’ prior written notice to each Issuer and the Indenture Trustee. Any payments on such policy shall be made to the Property Manager as agent of and for the account of any applicable Issuer and the Indenture Trustee. If the Property Manager (or its corporate parent), the Special Servicer (or its corporate parent) or the Back-Up Manager (or its corporate parent), as applicable, are rated not lower than “A” by S&P, the Property Manager, the Special Servicer or the Back-Up Manager, as applicable, may self-insure with respect to any insurance coverage or fidelity bond coverage required hereunder, in which case it shall not be required to maintain an insurance policy with respect to such coverage; provided, that STORE Capital may not self-insure with respect to any such insurance coverage or fidelity bond.
Appears in 1 contract
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case Each of each Mortgage Loan, the Master Servicer shall and the Special Servicer shall, as to those Mortgage Loans it is obligated to service hereunder, use reasonable its best efforts consistent in accordance with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower the related Mortgagor is required by the terms of the related Mortgage Loan and does not so maintain, the Master Servicer will (even in the case of Specially Serviced Mortgage Loans) shall itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property maintain (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal subject to the lesser provisions of (ithis Agreement regarding Nonrecoverable Advances, and further subject to Section 3.11(h) hereof)), to the full replacement cost extent the Trustee, as mortgagee on behalf of improvements securing such Mortgage Loan the Certificateholders, has an insurable interest and (ii) to the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (yextent available at commercially reasonable rates) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; (subject to applicable law), provided that all of if any Mortgage permits the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required holder thereof to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant dictate to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to Mortgagor the insurance provider from whom the related Borrower is coverage to obtain the requisite insurance coveragebe maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall (to the extent impose such insurance requirements as are consistent with the Servicing Standard) use efforts consistent with . The Special Servicer shall direct the Servicing Standard Master Servicer to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thatmaintain for each REO Property or Specially Serviced Mortgage Loan, in each case, have case with an insurer that possesses the Required Claims-Paying Ratings at the time such policy is purchased, no less insurance coverage is obtained;
(C) than was previously required of the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, related Mortgagor under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty Mortgage did not so require, hazard insurance, public liability insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist and business interruption or similar acts, and/or (ii) specific rent loss insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, in such insurance upon terms not materially less favorable than those in place amounts as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry are consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable reimbursed for the premium costs thereof and any loss related deductible relating to its failure to require the related Borrower to maintain terrorism such insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required Servicing Advance pursuant to a provision that entitles and to the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings extent permitted under Section 3.05
(a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, the Mortgaged Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer Servicer, as applicable, in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy insuring against hazard losses on any or all of the Mortgage Loans Mortgaged Properties (in the case of the Master Servicer) or REO Properties, as applicableProperties (in the case of the Special Servicer), then, to the extent such policy (A) is obtained from a Qualified Insurer having that possesses the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable, so covered, and the premium costs and any deductible thereof shall be, if and to the extent they are specifically attributable either to a specific Mortgaged Property during any period that the related Mortgagor has failed to maintain the hazard insurance required under the related Mortgage Loan in respect of such Mortgaged Property or to a specific REO Property, a Servicing Advance by the Master Servicer at the direction of the Special Servicer (in the case of a Specially Serviced Mortgage Loan) under Section 3.07(a) which is reimbursable to the Master Servicer pursuant to and to the extent permitted under Section 3.05(a); provided that, to the extent that such premium costs are attributable to properties other than Mortgaged Properties and/or REO Properties or are attributable to Mortgaged Properties as to which the hazard insurance required under the related Mortgage Loan is being maintained, they shall be borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder Property, as applicable, a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyproperty specific policy (taking into account any deductible clause that would have been permitted therein), promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds (without any right of reimbursement from the Trust, reimbursement) the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such losses up to the difference between the amount of the deductible clause to in such blanket policy and the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence amount of any deductible clause that would have been permitted under such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)property specific policy. The Master Servicer and the Special Servicer shall each agree to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cii) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if If the Master Servicer has actual knowledge shall cause any Mortgaged Property or the Special Servicer shall cause any REO Property to be covered by a force placed insurance policy naming the Master Servicer or the Special Servicer, as applicable, on behalf of any event the Trustee as the loss payee, then to the extent such policy (an “Insured Environmental Event”A) giving rise is obtained from a Qualified Insurer that possesses the Required Claims-Paying Ratings and (B) provides protection equivalent to a claim under an Environmental Insurance Policythe individual policies otherwise required, the Master Servicer shall notify or the Special Servicer Servicer, as applicable, shall conclusively be deemed to have satisfied its obligation to cause such effect and insurance to be maintained on such Mortgaged Property (in the case of the Master Servicer) or REO Property (in the case of the Special Servicer). If the Master Servicer shall take reasonable actions cause any Mortgaged Property as are in accordance to which the related Mortgagor has failed to maintain the required insurance coverage, or the Master Servicer at the direction of the Special Servicer shall cause any REO Property, to be covered by such force placed insurance policy, then the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) paid by the Master Servicer, shall constitute a Servicing Advance which is reimbursable to the Master Servicer pursuant to and to the extent permitted under Section 3.05(a). The Master Servicer shall, consistent with the Servicing Standard and the terms and conditions of the related Mortgage Loan documents, pursue the related Mortgagor for the amount of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunderincremental costs. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or All other out-of-pocket costs incurred in accordance with the Servicing Standard in connection associated with any claim under an Environmental Insurance Policy described above such force placed insurance policy (whether by the Master Servicer including, without limitation, any minimum or the Special Servicerstandby premium payable for such policy) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such force placed insurance policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as applicable, shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property, as the case may be, a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such property specific policy had it been maintained, promptly deposit into the Certificate Account from its own funds (without right of reimbursement) the amount not otherwise payable under the force placed 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing AdvanceStandard.
(db) The Each of the Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having Insurers that possess the Required Claims-Paying Ratings, Ratings a fidelity bond in such form and amount as are consistent with would permit it to be a qualified ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) 30 days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations In addition, each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement keep in force with Qualified Insurers that possess the Required Claims-Paying Ratings a policy or Special Servicerpolicies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its obligation to service the Mortgage Loans for which it is responsible hereunder, which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Any such errors and omissions policy, if required, shall provide that it may not be canceled without 30 days' prior written notice to the Trustee.
(c) All insurance coverage required to be maintained under this Section 3.07 shall be obtained from Qualified Insurers or insurers that are backed or guaranteed by Qualified Insurers.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Commercial Mortgage Pass-Through Certificate Series 2000-1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer (with respect to Mortgage Loans) or the Special Servicer (with respect to Specially Serviced Mortgage Loans and REO Properties) shall use reasonable its efforts consistent with the Servicing Standard Standards to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to by the terms of the related Mortgage Loan Documents and Note all insurance coverage as is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom required under the related Borrower is to obtain Mortgage. If the requisite Mortgagor does not so maintain such insurance coverage, the Master Servicer (with respect to Mortgage Loans and at the direction of the Special Servicer in the case of a Specially Serviced Mortgage Loan) or the Special Servicer (with respect to REO Properties) shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite maintain all insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage as is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) Mortgage, but only in no the event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, Trustee has an insurable interest therein and such insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; or the Special Servicer and
, if available, can be obtained at commercially reasonable rates, as determined by such Master Servicer (F) and the Directing Certificateholder will have the right to consent to any such determination), except to the extent that the failure of the related Mortgagor to do so is an Acceptable Insurance Default; provided, however, that if any Mortgage permits the holder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Master Servicer itself is required or the Special Servicer, as applicable, shall impose such insurance requirements as are consistent with the Servicing Standards, provided that, with respect to the immediately preceding proviso, the Master Servicer will be obligated to use reasonable efforts to cause the Mortgagor to maintain (or to itself maintain) insurance that against property damage resulting from terrorist or similar acts unless the Borrower does not maintainMortgagor's failure is an Acceptable Insurance Default and only in the event the Trustee has an insurable interest therein and such insurance is available to the Master Servicer. Notwithstanding any contrary provision above, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default for failing to obtain, any earthquake or environmental insurance on any Mortgaged Property unless such insurance was in effect at the time of its obligations hereunder as a result origination of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents or the Closing Date and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified is available at commercially reasonable rates. In addition, the Master Servicer in writing that such Borrower does not intend will be entitled to maintain such rely on insurance and consultants (at the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust Servicer's expense) in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage determining whether any insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates or at any rate. Subject to Section 3.17(a) and consistent with the Servicing Standardcosts of such insurance being reimbursed or paid to the Special Servicer as provided in the last sentence of this paragraph, the Special Servicer shall maintain for each REO Property no less insurance coverage than was previously required of the Mortgagor under the related Mortgage Loan and Companion Loan. All such insurance policies Insurance Policies maintained as described above by the Master Servicer or the Special Servicer shall (i) contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, Loans and Companion Loans other than REO Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of REO Properties), (ii) be in the name of the Trustee (in the case of insurance maintained in respect of REO Properties), (iii) include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing Mortgaged Property or the REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan, Companion Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions, (iv) include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents), (v) be noncancellable without 30 days prior written notice to the insured party (except in the case of nonpayment, in which case such policy shall not be cancelled without 10 days prior notice) and (vi) be issued by a Qualified Insurer authorized under applicable law to issue such Insurance Policies. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies Insurance Policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing StandardStandards and the provisions of the related Mortgage Loan and Companion Loan) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c3.05(a), in the case of amounts received in respect of an REO Property. Any cost costs incurred by the Master Servicer or Special Servicer in maintaining any such insurance Insurance Policies in respect of Mortgage Loans and Companion Loans (other than REO Properties)
(i) if the Mortgagor defaults on its obligation to do so, shall be advanced by the Master Servicer as a Servicing Advance and will be charged to the related Mortgagor and (ii) shall not, for purposes hereof, including of calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan and Companion Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loan so permit; provided. Any cost incurred by the Special Servicer in maintaining any such Insurance Policies with respect to REO Properties shall be an expense of the Trust payable out of the related REO Account pursuant to Section 3.16(c) or, howeverif the amount on deposit therein is insufficient therefor, that this sentence shall not limit the rights of advanced by the Master Servicer as a Servicing Advance. Notwithstanding the foregoing, with respect to the Mortgage Loans that either (x) require the Mortgagor to maintain "all risk" property insurance (and do not expressly permit an exclusion for terrorism) or Special Servicer on behalf (y) contain provisions generally requiring the applicable Mortgagor to maintain insurance in types and against such risks as the holder of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs Loan reasonably requires from time to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant time in order to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toprotect its interests, the Master Servicer will be required to (A) actively monitor whether the insurance policies for the related Mortgaged Property contain Additional Exclusions, (B) request the Mortgagor to either purchase insurance against the risks specified in the Additional Exclusions or provide an explanation as to its reasons for failing to purchase such insurance and (C) notify the Special ServicerServicer if any insurance policy contains Additional Exclusions or if any Mortgagor fails to purchase the insurance requested to be purchased by the Master Servicer pursuant to clause (B) above. If the Special Servicer determines in accordance with the related Servicing Standards that such failure is not an Acceptable Insurance Default, the Special Servicer shall notify the Master Servicer and the Master Servicer shall cause such insurance to be maintained. Furthermore, the Special Servicer shall inform the Rating Agencies as to such conclusions for those Mortgage Loans that (i) have one of the case may beten (10) highest outstanding Stated Principal Balances of all of the Mortgage Loans then included in the Trust or (ii) comprise more than 5% of the outstanding Stated Principal Balance of the Mortgage Loans then included in the Trust. During the period that the Special Servicer is evaluating the availability of such insurance, neither the Master Servicer nor the Special Servicer will be liable for any loss related to its failure to require the Mortgagor to maintain such insurance and will not be in default of its obligations as a Servicing Advanceresult of such failure and the Master Servicer will not itself maintain such insurance or cause such insurance to be maintained.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy Insurance Policy with a Qualified Insurer insuring against fire and hazard losses on all of the Mortgage Loans or REO Properties, as applicablethe case may be, required to be serviced and administered hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) Insurance Policy provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, Servicer shall conclusively be deemed to have satisfied its obligation to cause fire and hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy Insurance Policy may contain a deductible clause (not in excess of a customary amount)clause, in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, Servicer shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a fire and hazard insurance policy Insurance Policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyInsurance Policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with of such loss or losses that would have been covered under the individual policy but are not covered under the blanket Insurance 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, or in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)Standards. The In connection with its activities as administrator and Master Servicer and of the Special Mortgage Loans, the Master Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it Insurance Policy in a timely fashion in accordance with the terms of such policy. The Special Servicer, to the extent consistent with the Servicing Standards, may maintain, earthquake insurance on REO Properties, provided coverage is available at commercially reasonable rates, the cost of which shall be a Servicing Advance.
(ii) If the Master Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by a master single interest or force-placed insurance policy with a Qualified Insurer naming the Master Servicer or the Special Servicer on behalf of the Trustee as the loss payee, then to the extent such Insurance Policy provides protection equivalent to the individual policies otherwise required, the Master Servicer or the Special Servicer shall conclusively be deemed to have satisfied its obligation to cause such insurance to be maintained on the related Mortgaged Properties and REO Properties. In the event the Master Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by such master single interest or force-placed insurance policy, the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) shall be paid by the Master Servicer as a Servicing Advance. Such master single interest or force-placed policy may contain a deductible clause, in which case the Master Servicer or the Special Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such policy had it been maintained, deposit into the Certificate Account from its own funds the amount not otherwise payable under the master single or force-placed interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing Standards.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the term of this Agreement a blanket fidelity bond and an errors and omissions Insurance Policy with a Qualified Insurer covering the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard 's and the terms Special Servicer's, as applicable, officers and conditions employees acting on behalf of such Environmental Insurance Policy to make a claim thereunder the Master Servicer and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim its activities under an Environmental Insurance Policy described above (whether by this Agreement. Notwithstanding the foregoing, so long as the long term debt or the deposit obligations or claims-paying ability of the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) , as applicable, is rated at least "Baa3" by Moody's and Section 3.19(b)) paid by, and reimbursable to"A" by Fitch, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force ▇▇ ▇▇▇▇icable, shall be allowed to provide self-insurance with a Qualified Insurer having the Required Claims-Paying Ratings, respect to a fidelity bond and an "errors and omissions" Insurance Policy. Such amount of coverage shall be in such form and amount as are consistent with the Servicing StandardStandards. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms Coverage of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer or the Special ServicerServicer under a policy or bond obtained by an Affiliate of the Master Servicer or the Special Servicer and providing the coverage required by this Section 3.07(c) shall satisfy the requirements of this Section 3.07(c). The Special Servicer and the Master Servicer will promptly report in writing to the Trustee any material changes that may occur in their respective fidelity bonds, if any, and/or their respective errors and omissions Insurance Policies, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice , and will furnish to the TrusteeTrustee copies of all binders and policies or certificates evidencing that such bonds, if any, and insurance policies are in full force and effect. So long as the long-term unsecured debt obligations of the The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or Special Servicer, or such party’s corporaprocured pursuant to the requirements of this Section 3.07(c).
Appears in 1 contract
Sources: Pooling and Servicing Agreement (J.P. Morgan Chase Commercial Mortgage Securities Trust 2006-Cibc15)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Serviced Mortgage Loan (including each Specially Serviced Mortgage Loan), the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratingsmaintained) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably requirerequired, subject to applicable law, under the related Mortgage Loan Documents; provided Documents (except to the extent that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required failure to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and coverage is available at commercially reasonable rates;
(B) an Acceptable Insurance Default); PROVIDED that, if and to the extent that any Serviced Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance coverage that the related Borrower is required to maintain, the Master Servicer shall exercise such discretion in a manner consistent with the Servicing Standard, with a view towards requiring insurance coverage with respect to the related Mortgaged Property no less favorable to that in place with respect to the related Mortgaged Property on the Closing Date and otherwise comparable to that required under other Serviced Mortgage Loans with express provisions governing such matters and, in any event, including insurance for property damage resulting from terrorist and similar acts (either by way of an all-risk casualty policy with no exclusion for such risks or a separate policy covering property damage from such risks), as well as business interruption or rental loss insurance for at least 12 months; and PROVIDED, FURTHER, that, if and to the extent that any Serviced Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause require the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thatthat possess (or whose obligations are, in each any such case, have guaranteed or backed in writing by an entity that possesses) the Required Claims-Paying Ratings at Ratings; and PROVIDED, FURTHER, that, in the time such insurance coverage is obtained;
(C) case of any Serviced Mortgage Loan, the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, maintain such insurance coverage upon the related Borrower's failure to do so only to the extent that the Master Servicer has determined (I) such insurance is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar Trustee as mortgagee has an insurable interest (PROVIDED that, subject to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintainTrustee as mortgagee having an insurable interest, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, property damage resulting from terrorist or similar acts, and/or unless the Borrower's failure to maintain such insurance constituted an Acceptable Insurance Default), and (iiII) specific the payment of premiums for such insurance either would not constitute a Nonrecoverable Advance or may be made directly from the Collection Account in accordance with SECTION 3.11(I). Subject to SECTION 3.17(B), the Special Servicer shall also cause to be maintained for each Administered REO Property no less insurance coverage with respect (to damages or casualties caused by the extent (I) such insurance is available at commercially reasonable rates (except in the case of insurance coverage for property damage resulting from terrorist or similar acts, which coverage the Master Special Servicer shall cause maintain unless the Borrower's failure to maintain such insurance would have constituted an Acceptable Insurance Default), and (II) the payment of premiums for such insurance either would not constitute a Nonrecoverable Advance or may be made directly from the Collection Account in accordance with SECTION 3.11(I)) than was previously required of the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b)and, and/or 3.24at a minimum, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full hazard insurance with a replacement cost of improvements at such REO Property rider and, unless it would have constituted an Acceptable Insurance Default for the related Borrower, no exclusion for terrorist or similar acts, (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve 12 months, and (12iii) monthscommercial general liability insurance, in each case if so required pursuant to case, in an amount customary for the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates type and geographic location of such REO Property and consistent with the Servicing Standard; PROVIDED that all such insurance shall be obtained from Qualified Insurers that possess (or whose obligations are, in any such case, guaranteed or backed in writing by an entity that possesses) the Required Claims-Paying Ratings. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Serviced Mortgage Loan), or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of an Administered REO Property), and shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.05SECTION 3.05(A), in the case of amounts received in respect of a Serviced Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(cSECTION 3.16(C), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; providedPROVIDED, howeverHOWEVER, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section SECTION 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, by and reimbursable to, to the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-force placed policy insuring against hazard losses on some or all of the Serviced Mortgage Loans or and/or Administered REO Properties, as applicable, for which it is responsible, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having that possesses (or whose obligations are guaranteed or backed in writing by an entity that possesses) the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise requiredunder SECTION 3.07(A), the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-force placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever that maintains such policy, policy shall, if there shall not have been maintained on any Mortgaged Property securing a (other than the [Separately Serviced Mortgage Loan Loan] Mortgaged Property) or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(aSECTION 3.07(A), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master ServicerAccount, from its own funds (without any right of reimbursement from the Trustreimbursement), the amount not otherwise payable under the blanket or master force-force placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan Documents (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Each of the Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-force placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With Within 45 days after the Closing Date, with respect to each Performing of the Environmentally Insured Mortgage Loan that is subject Loans, the Master Servicer shall notify the insurer under the related Environmental Insurance Policy and take all other action necessary for the Trustee, on behalf of the Certificateholders, to be an insured (and for the Master Servicer, on behalf of the Trust, to make claims) under such Environmental Insurance Policy, if . In the event that the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”"INSURED ENVIRONMENTAL EVENT") giving rise to a claim under an any Environmental Insurance PolicyPolicy in respect of any Environmentally Insured Mortgage Loan for which the Borrower has not filed a claim, the Master Servicer shall notify shall, in accordance with the Special Servicer to terms of such effect Environmental Insurance Policy and the Master Servicer Servicing Standard, timely make a claim thereunder with the appropriate insurer and shall take reasonable such other actions as are in accordance with the Servicing Standard and the terms and conditions of which are necessary under such Environmental Insurance Policy in order to make a claim thereunder and achieve realize the payment full value thereof for the benefit of all amounts to which the Trust is entitled thereunderCertificateholders. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer If any other party hereto has actual knowledge of an Insured Environmental Event with respect to any event giving rise to a claim under an Environmental Insurance PolicyEnvironmentally Insured Mortgage Loan, the Special Servicer such party shall promptly so notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees fees, premiums or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any such claim under an Environmental Insurance Policy described above (whether shall be paid by the Master Servicer or the Special Servicer) and shall be (subject reimbursable to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable toit as a Servicing Advance. With respect to each Environmental Insurance Policy in respect of an Environmentally Insured Mortgage Loan, the Master Servicer shall review and familiarize itself with the terms and conditions relating to enforcement of claims and shall monitor the dates by which any claim must be made or any action must be taken under such policy in order to realize the full value thereof for the benefit of the Certificateholders in the event the Master Servicer has actual knowledge of an Insured Environmental Event giving rise to a claim under such policy. The Master Servicer shall abide by the terms and conditions precedent to payment of claims under the Environmental Insurance Policies with respect to the Environmentally Insured Mortgage Loans and take all such action as may be required to comply with the terms and provisions of such policies in order to maintain such policies in full force and effect and to make claims thereunder. In the event that the Master Servicer receives notice of any termination of any Environmental Insurance Policy with respect to Environmentally Insured Mortgage Loan, the Master Servicer shall, within five Business Days after receipt of such notice, notify the Special Servicer, the Controlling Class Representative, the Rating Agencies and the Trustee of such termination in writing. Upon receipt of such notice, the Master Servicer shall address such termination in accordance with SECTION 3.07(A) in the same manner as it would the case may betermination of any other Insurance Policy required under the related Mortgage Loan Documents. Any legal fees, premiums or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with enforcing the obligations of the Borrower under any Environmental Insurance Policy or a resolution of such termination of an Environmental Insurance Policy shall be paid by the Master Servicer and shall be reimbursable to it as a Servicing Advance.
(d) The Master Servicer and the Special Servicer each shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having Insurers that possess (or whose obligations are, in any such case, guaranteed or backed in writing by an entity that possesses) the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent would permit it to be a qualified Fannie Mae or Freddie Mac seller-servicer of multifamily mortgage loa▇▇ (▇▇ ▇▇ such ▇▇▇▇▇ form and amount as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Servicing StandardTrustee by the relevant Rating Agency)). The Master Servicer or and the Special Servicer each shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) 30 days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations of In addition, the Master Servicer and the Special Servicer each shall at all times during the term of this Agreement keep in force with Qualified Insurers that possess (or Special Servicerwhose obligations are, in any such case, guaranteed or backed in writing by an entity that possesses) the Required Claims-Paying Ratings, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its obligation to service the Serviced Mortgage Loans for which it is responsible hereunder and, to the limited extent contemplated by ARTICLES I through XI, to administer the [Separately Serviced Mortgage Loan], which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified Fannie Mae or Freddie Mac seller-servicer of multifamily mortgage loa▇▇ (▇▇ in such ▇▇▇▇▇ form and amount as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Trustee by the relevant Rating
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Citigroup Mortgage Loan Trust Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the Master The Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due including each Mortgaged Property relating to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such any Specially Serviced Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Mortgagor is required to obtain the requisite insurance coveragemaintain, the Master Servicer shall (to the extent exercise such discretion in a manner consistent with the Servicing Standard) use efforts consistent , with a view towards requiring insurance comparable to that required under other Mortgage Loans with express provisions governing such matters; and provided, further, that, if and to the Servicing Standard to cause extent that a Mortgage so permits, the related Borrower Mortgagor shall be required to obtain the requisite required insurance coverage from Qualified Insurers that, in each case, have a claims-paying rating no lower than two rating categories below the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
highest rated Certificates outstanding, and in any event no lower than "BBB" from S&P and "A" from Fitch (C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would if then be available to the Master Servicer on a force-placed basisrated by Fitch; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically excludethen rated by Fitch, terrorist "A:IX" or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”better from A.M. Best). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections Section 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, also cause to maintain with Qualified Insurers having the Required Claims-Paying Ratings be maintained for each REO Property no less insurance coverage (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser extent available at commercially reasonable rates) than was previously required of the Mortgagor under the related Mortgage and, at a minimum, (i) the full hazard insurance with a replacement cost of improvements at such REO Property or rider, (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve 12 months, and (12iii) monthscommercial general liability insurance, in each case if so required pursuant to case, in an amount customary for the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates type and geographic location of such REO Property and consistent with the Servicing Standard; provided that all such insurance shall be obtained from Qualified Insurers that, in each case, shall have a claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than "BBB" from S&P and "A" from Fitch (if then rated by Fitch; and, if not then rated by Fitch, "A:IX" from A.M. Best) (or in such other form and amount or issued by an insurer with such other claims-paying ability as would not, as confirmed in writing by each Rating Agency, result in an Adverse Rating Event). All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage LoanLoans), or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of REO Properties), and shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower Mortgagor under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed force place policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claimsa claims-Paying Ratingspaying rating no lower than "A" from S&P and "A" from Fitch (if then rated by Fitch; and, if not then rated by Fitch, "A:IX" from A.M. Best) or is issued by an insurer with such other claims-paying ability as would not, as confirmed in writing by each Rating Agency, result in an Adverse Rating Event), and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed force place policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed force place policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify at all times during the Master term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which shall take reasonable actions Specially Serviced Mortgage Loans or REO Properties exist as are in accordance with the Servicing Standard and the terms and conditions part of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With Fund) keep in force with a Qualified Insurer having a claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than "BBB" from S&P and "A" from Fitch (if then rated by Fitch; and, if not then rated by Fitch,"A:IX" from A.M. Best), a fidelity bond in such form and amount or issued by an insurer with such other claims-paying ability rating as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans (or in such other form and amount as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Trustee by each REO Property that is subject to an Environmental Insurance Policy, if Rating Agency)). Each of the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, and the Special Servicer shall take reasonable actions as are in accordance be deemed to have complied with the Servicing Standard and foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms and conditions of such Environmental Insurance Policy fidelity bond, the coverage afforded thereunder extends to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master . Such fidelity bond shall provide that it may not be cancelled without ten days' prior written notice to the Trustee. Each of the Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with a Qualified Insurer having a claims-paying rating no lower than two rating categories below the Required Claims-Paying Ratingshighest rated Certificates outstanding, and in any event no lower than "BBB" from S&P and "A" from Fitch (if then rated by Fitch; and, if not then rated by Fitch, "A:IX" from A.M. Best), a fidelity bond policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as are consistent would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans (or in such other form and amount or issued by an insurer with such other claims paying ability rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Servicing StandardTrustee by each Rating Agency)). The Master Each of the Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision provisions if an Affiliate thereof has such fidelity bond coverage insurance and, by the terms of such fidelity bondpolicy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Such fidelity bond Any such errors and omissions policy shall provide that it may not be canceled cancelled without ten (10) days’ ' prior written notice to the Trustee. So For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or, in the case of the initial Servicer and Special Servicer, their respective direct or indirect parent), are rated at least "A" or the equivalent by each of the Rating Agencies (or, in the case of either Rating Agency, such party’s corporalower rating as will not result in qualification, downgrade or withdrawal of any of the ratings then assigned to the Certificates by such Rating Agency, as evidenced in writing by such Rating Agency), such Person may self-insure with respect to the risks described in this Section 3.07(c).
Appears in 1 contract
Sources: Pooling and Servicing Agreement (DLJ Commercial Mort Corp Comm Mort Pass THR Cer Ser 1998-Cg1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer (with respect to Loans that are not Specially Serviced Mortgage Loans) and the Special Servicer (with respect to Specially Serviced Mortgage Loans) shall use reasonable efforts efforts, consistent with the Servicing Standard Standard, to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents(except to the extent that the failure to maintain such insurance coverage is an Acceptable Insurance Default; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain permanently waive any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination requirement by reason of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) exception); provided that if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Mortgagor is required to maintain, the Master Servicer or Special Servicer, as the case may be, shall exercise such discretion in a manner consistent with the Servicing Standard; and provided, further, that, if and to the extent that a Mortgage so permits, the Master Servicer or Special Servicer, as the case may be, shall use reasonable efforts to require the related Mortgagor to obtain the requisite required insurance coverage from Qualified Insurers that have a "claims paying ability" or "financial strength" rating, as applicable, of at least "A2" from Moody's and "A" from Fitch and S&P (or, in the case of a▇▇ ▇▇▇▇▇▇ Agency, ▇▇▇▇ lower rating as will not result in an Adverse Rating Event, as evidenced in writing by such Rating Agency); and provided, further, that the Master Servicer shall obtain or cause to be maintained for any such Mortgaged Property any such insurance that the related Mortgagor is required but fails to maintain, but only to the extent that the Trust has an insurable interest, and such insurance is available at a commercially reasonable rate as determined in accordance with the Servicing Standard. In addition, with respect to coverage for acts of terrorism, the Master Servicer will not be required to maintain such coverage if the risks and costs associated with obtaining or maintaining such coverage outweigh the benefits to the Trust of obtaining or maintaining such coverage, as determined by the Master Servicer in accordance with the Servicing Standard. Upon request, the Master Servicer shall (provide to the Rating Agencies or the Controlling Class Representative in a timely manner such information as the Rating Agencies or the Controlling Class Representative may reasonably request relating to the extent consistent of insurance coverage maintained for acts of terrorism with respect to each of the Mortgage Loans. Any Controlling Class Certificateholder may request that earthquake insurance be secured for one or more Mortgaged Properties by the related Mortgagor, to the extent such insurance may reasonably be obtained and provided the related loan documents and applicable law give the mortgagee the right to request such insurance coverage and such loan documents require the Mortgagor to obtain earthquake insurance at the request of the mortgagee. Subject to Section 3.17(a), the Special Servicer, in accordance with the Servicing Standard) use efforts consistent with the Servicing Standard to , shall also cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that for each REO Property no less insurance coverage than was previously required of the lender is entitled to reasonably require, subject to applicable law, Mortgagor under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, Mortgage; provided that such insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent accordance with the Servicing Standard. In addition, and (during any Subordinate Control Period) with the consent respect to coverage for acts of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisorterrorism, the Special Servicer will not be required to do so. If any maintain such approval of coverage if the Special Servicer has not been expressly denied within ninety (90) days of risks and costs associated with obtaining or maintaining such coverage outweigh the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available benefits to the Master Servicer in order to make an informed decisionTrust of obtaining or maintaining such coverage, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation as determined by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting in accordance with the Trust Advisor and/or the Subordinate Class RepresentativeServicing Standard; and provided, as applicable)further, the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain all such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b)shall be obtained from Qualified Insurers that, and/or 3.24if they are providing casualty insurance, shall have a "claims paying ability" or "financial strength" rating, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve "A2" from Moody's and "A" from Fitch and S&P (12) monthsor, in each the case if so required pursuant to the related Mortgage Loan Documents; providedof a▇▇ ▇▇▇▇▇▇ Agency, however▇▇▇▇ lower rating as will not result in an Adverse Rating Event, that the Special Servicer shall not be required as evidenced in any event to maintain or obtain the insurance coverage otherwise described writing by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardsuch Rating Agency). All such insurance policies maintained as described above shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Loans, including Specially Serviced Mortgage LoanLoans), or and shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of an REO PropertyProperties), on behalf of the Trustee; and, in each case, such insurance shall be issued by a Qualified Insurer. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection applicable Custodial Account in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, 3.04(a) in the case of amounts received in respect of a Mortgage Loan, or in the applicable REO Account of the Special Servicer, subject to withdrawal pursuant to in accordance with Section 3.16(c3.16(b), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance (including any earthquake insurance maintained at the request of a Controlling Class Certificateholder) shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan or REO Loan, notwithstanding that the terms of such Mortgage Loan loan so permit; provided, however, that this sentence but shall not limit the rights of be recoverable by the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 1 contract
Sources: Pooling and Servicing Agreement (CDC Commercial Mortgage Trust 2002-Fx1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided provided, that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard; and provided further that, if and (during any to the extent that a Mortgage so permits, the related Mortgagor shall be required to obtain the required insurance coverage from Qualified Insurers that have a general policy rating of at least A-X in A.M. Best's Key Rating Guide. The Majority Subordinate Control Period) with Certificateholder may request that earthquake insurance be secured for one or more Mortgaged Properties at the consent expense of the Majority Subordinate Class Representative Certificateholder, unless required or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar permitted to be required under the related Mortgaged Property and located in or around the region Mortgage Loan, in which such related Mortgaged Property is located, case the Master Servicer or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust AdvisorSpecial Servicer, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable effortsefforts to enforce such obligation, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that so long as such enforcement is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. Subject to Section 3.17(a), the Special Servicer shall also cause to be maintained for each REO Property no less insurance coverage than was previously required of the Mortgagor under the related Mortgage; provided, that all such insurance shall be obtained from Qualified Insurers that, if they are providing casualty insurance, shall have a claims paying ability rating of at least "▇," "▇▇" and "A" from Standard & Poor's, ▇▇▇▇▇'▇ (if then rated by ▇▇▇▇▇'▇) and Fitch (if then rated by Fitch), respectively, or such lower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies. All such insurance policies maintained as described above shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage LoanLoans), or and shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. The cost of any such insurance in respect of an REO PropertyProperty shall be payable out of amounts on deposit in the related REO Account, or, if the amount on deposit therein is insufficient, the Special Servicer shall follow the procedures set forth in Sections 3.01 and 3.03(c) to request the Master Servicer to make a Servicing Advance with respect to such costs (and the Special Servicer shall in no way be in default hereunder to the extent that any failure to perform hereunder is a result of the Master Servicer not making the requested Servicing Advance). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and the terms of the related Mortgage and in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or a master force-placed forced place policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claimsa claims-Paying Ratingspaying rating of "▇," "▇▇" and "A" or better from Standard & Poor's, and ▇▇▇▇▇'▇ (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are if then rated not lower than “A2” by ▇▇▇▇▇’▇ '▇) and “A” Fitch (if then rated by Fitch and Fitch), respectively, or such lower rating of any Rating Agency or rating from any nationally recognized statistical rating agency as will not result in qualification, downgrading or withdrawal of the Master Servicer or ratings then assigned to the Special ServicerCertificates, as evidenced in writing by the case may beRating Agencies, self-insures for its obligation and (ii) provides protection equivalent to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policypolicy (taking account of any usual and customary deductible therein), promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for would have been covered under an individual policy which is consistent with the Servicing Standard(taking account of any usual and customary deductible therein). The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Merrill Lynch Mortgage Investors Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In Each of the Master Servicer (in the case of each Mortgage Loan, Loans and Serviced Whole Loans (other than Specially Serviced Mortgage Loans and Non-Serviced Mortgage Loans)) and the Master Special Servicer (solely in the case of Specially Serviced Mortgage Loans) shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower each Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for in respect of the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of (to the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless extent such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and coverage is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (terms as determined by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thator Special Servicer, in each caseas applicable, have the Required Claims-Paying Ratings at the time provided that any such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or determination that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and terms shall be consented to by the Majority Certificateholder of the Controlling Class); provided, that if any Mortgage permits the holder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such hazards Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall impose such insurance requirements as are not consistent with the Servicing Standard. If a Mortgagor fails to maintain such insurance, the Master Servicer (at the direction of the Special Servicer in the case of a Specially Serviced Mortgage Loan or REO Loan) shall (to the extent available at commercially reasonable terms as determined by the Master Servicer, which shall be entitled to rely on an opinion of counsel or insurance consultants in making such determination, provided that, subject to the Servicing Standard, such final determination shall be consented to by the Majority Certificateholder of the Controlling Class) obtain such insurance (which may be through a master or single interest policy) and the cost (including any deductible relating to such insurance and any out of pocket cost incurred by the Master Servicer in obtaining advice of counsel or insurance consultants) of such insurance (or in the case of a master or single interest policy, the incremental cost (including any deductible relating to such insurance) of such insurance relating to the specific Mortgaged Property), shall be a Servicing Advance and shall be recoverable by the Master Servicer pursuant to Section 3.05(a) or 3.05(e). If the Master Servicer or Special Servicer, as the case may be, determines in accordance with the preceding provisions of this paragraph that the applicable insurance is not available at commercially reasonable terms, the Master Servicer or the Special Servicer, as the case may be, shall notify the Majority Certificateholder of the Controlling Class and the Rating Agencies of such determination. If at any time commonly insured against for properties similar a Mortgaged Property related to a Mortgage Loan serviced hereunder is located in an area identified in the Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Federal Emergency Management Agency as having special flood hazards or it becomes located in such area by virtue of remapping conducted by such agency (and flood insurance has been made available), the Master Servicer (or in the case of a Specially Serviced Mortgage Loan, the Special Servicer) shall, if and to the extent that the Mortgage Loan or Serviced Whole Loan requires the Mortgagor or permits the mortgagee to require the Mortgagor to do so, use reasonable efforts to cause the related Mortgagor to maintain a flood insurance policy meeting the requirements of the current guideline of the Federal Insurance Administration in the maximum amount of insurance coverage available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as amended, unless otherwise specified by the related Mortgage Loan or Serviced Whole 146 Loan. With respect to any Mortgage Loan (other than a Non-Serviced Mortgage Loan) or any Serviced Whole Loan, if (i) the Mortgagor is required by the terms of the Mortgage Loan or Serviced Whole Loan to maintain such insurance (or becomes obligated by virtue of the related Mortgaged Property becoming located in such area by virtue of such remapping) or (ii) the terms of the Mortgage Loan or Serviced Whole Loan permit the mortgagee to require the Mortgagor to obtain such insurance, the Master Servicer (or in the case of any Specially Serviced Loan, the Special Servicer), shall promptly notify the Mortgagor of its obligation to obtain such insurance. If the Mortgagor fails to obtain such flood insurance within 120 days of such notification, the Master Servicer (or in the case of any Specially Serviced Mortgage Loan, the Special Servicer) shall obtain such insurance, the cost of which shall be a Servicing Advance and shall be recoverable by the Master Servicer pursuant to Section 3.05(a) or 3.05(e); provided, that the Master Servicer or Special Servicer shall not be required to incur any such cost if such Advance would constitute a Nonrecoverable Servicing Advance; provided, further, if the Master Servicer or Special Servicer, as applicable, shall determine that the payment of such amount is (i) necessary to preserve the related Mortgaged Property and located (ii) would be in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval best interest of the Special Servicer has not been expressly denied within ninety Certificateholders (90) days or with respect to any Serviced Whole Loan, of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (orCertificateholders and, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicableany related Serviced Companion Loan Holders and Serviced B Note Holders), then the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of make such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust payment from amounts in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicableCertificate Account or, with respect to each REO Propertyany Serviced Whole Loan, from the related Serviced Whole Loan Custodial Account. Subject to Section 3.17(a), the Special Servicer shall also use reasonable efforts, consistent with the Servicing Standard, efforts to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide cause to be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and terms) no less insurance coverage than was previously required of the Mortgagor under the related Mortgage or as is consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer (in the case of Mortgaged Properties) or the Special Servicer (in the case of REO Properties) on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with applicable law, the terms of the related Mortgage Loan or Serviced Whole Loan documents and the Servicing Standard) shall be deposited in (or remitted for deposit to) the Collection Certificate Account or, with respect to the any Serviced Whole Loan, deposited in accordance with Section 3.04(or remitted for deposit to) the related Serviced Whole Loan Custodial Account, subject to withdrawal pursuant to Section 3.053.05(a) and Section 3.05(e), respectively, in the case of amounts received in respect of a Mortgage Loan, Serviced Companion Loan or Serviced B Note, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid the outstanding principal balance or Stated Principal Balance of the related Mortgage Loan or Serviced Whole Loan, notwithstanding that the terms of such Mortgage Loan or Serviced Whole Loan so permit; provided, however, that this sentence but shall not limit the rights of be recoverable by the Master Servicer as a Servicing Advance pursuant to Section 3.05(a) or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to Section 3.05(e), as applicable.
(i) If the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) obtains and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintains a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or Mortgaged Properties and/or REO Properties, as applicableProperties for which it is responsible to cause the maintenance of insurance 147 hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related such Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any a Mortgaged Property securing a Mortgage Loan or any an REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by or, with respect to any Serviced Whole Loan, deposited in the Master Servicer, related Serviced Whole Loan Custodial Account (or into the Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (Loan, or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholdersthe Certificateholders (and with respect to the Serviced Whole Loans, the related Serviced Companion Loan Holders and Serviced B Note Holders), claims under any such blanket policy maintained by it in a timely fashion in accordance with the terms of such policy.
(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-force placed insurance policy, which provides protection equivalent to the individual policies otherwise required, the Master Servicer or Special Servicer shall conclusively be deemed to have satisfied its respective obligations to cause hazard insurance to be maintained on such Mortgaged Properties and/or REO Properties. Such policy may contain a deductible clause, in which case the Master Servicer or the Special Servicer, as applicable, shall in the event that (x) there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and (y) 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 Certificate Account or, with respect to any Serviced Whole Loan, deposit into the related Serviced Whole Loan Custodial Account (or into the Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) 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. The Master Servicer and the Special Servicer each agrees to prepare and present, on behalf of itself, the Trustee and the Certificateholders (and with respect any Serviced Whole Loan, the related Serviced Companion Loan Holders and Serviced B Note Holders), claims under any such master force placed insurance policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master Servicer, which shall take reasonable actions as are in accordance term of this Agreement a blanket fidelity bond and an errors and omissions insurance policy covering its 148 officers and employees (and with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject other persons acting on behalf of it, shall cause such persons to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of maintain such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard insurance) in connection with any claim its activities under this Agreement and naming the Trustee as an Environmental Insurance Policy described above (whether by the Master Servicer additional insured or the Special Servicer) loss payee, as applicable. The amount of coverage shall be (subject at least equal to Section 3.11(h) and Section 3.19(b)) paid bythe coverage that would be required by FNMA or FHLMC, and reimbursable towhichever is greater, with respect to the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be, were servicing and administering the Mortgage Loans, Serviced Whole Loans and/or the REO Properties for which it is responsible hereunder for FNMA or FHLMC. Such fidelity Coverage of the Master Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of such Person and providing the coverage required by this Section 3.07(c) shall provide that it may not satisfy the requirements of this Section 3.07(c).
(d) All insurance coverage required to be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of maintained by the Master Servicer or Special Servicer, as applicable, under this Section 3.07 shall be obtained from Qualified Insurers having a claims paying ability rating (or the obligations of which are guaranteed or backed by a company having such party’s corporaclaims paying ability rating or insurance financial strength rating, as applicable) of not less than (x) "A" by Standard & Poor's and (y) "A2" by Moody's; provided, however, that the requirements of clauses (x) or (y) shall not be applicable with respect to Standard & Poor's or Moody's, as applicable, if such Rating Agency shall have confirmed in writing that an insurance company with a lower claims paying ability rating shall not result, in and of itself, in a downgrade, qualification or withdrawal of the then current ratings by such Rating Agency of any Class of Certificates or any related Serviced Companion Loan Securities. Notwithstanding the foregoing, so long as the long-term debt or the deposit obligations or claims-paying ability of the Master Servicer or Special Servicer (or its immediate or remote parent) is rated at least "A" by Standard & Poor's and "A2" by Moody's, the Master Servicer or Special Servicer, respectively, shall be allowed to provide self-insurance with respect to a fidelity bond and such errors and omissions policy. Coverage of the Master Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of the Master Servicer or the Special Servicer and providing the coverage required by this Section 3.07(c) shall satisfy the requirements of this Section 3.07(c).
Appears in 1 contract
Sources: Pooling and Servicing Agreement (GMAC Commercial Mortgage Securities Inc. Series 2004-C2)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Property Manager (other than with respect to Specially Serviced Assets) and the case of each Mortgage Loan, the Master Special Servicer (with respect to Specially Serviced Assets) shall use reasonable efforts consistent in accordance with the Servicing Standard to cause the related Borrower Obligor to maintain (including identifying the extent to which a Borrower is maintaining for each Mortgaged Property all insurance coverage and, if such Borrower does not so maintain, as is required under the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance terms of such Lease or Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage as applicable (including but not limited to coverage for damage resulting from acts the avoidance of terrorism) as is required or doubt, any Environmental Policy); provided, that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Lease or Mortgage Loan grants permits the lender lessor thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Obligor is required to obtain the requisite insurance coveragemaintain, the Master Servicer Property Manager or the Special Servicer, as the case may be, shall (to the extent exercise such discretion in a manner consistent with the Servicing Standard) use efforts consistent with ; and provided, further, that, if and to the Servicing Standard to cause extent that a Lease or Mortgage Loan so permits, the related Borrower Obligor shall be required to obtain the requisite required insurance coverage from Qualified Insurers thatthat have a claims-paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, which are licensed to do business in each casethe state wherein the related Obligor or the Mortgaged Property subject to the policy, have as applicable, is located. If such Obligor does not maintain the Required Claims-Paying Ratings at required insurance or, with respect to any Environmental Policy in place as of the time applicable First Collateral Date, the Property Manager will itself cause such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or with Qualified Insurers meeting such criteria; provided, that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer Manager shall not be required to maintain such insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to Indenture Trustee (as mortgagee of record on behalf of the related Mortgaged Property (iNoteholders) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist have an insurable interest or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer Property Manager has determined (in its reasonable judgment based on inquiry consistent in accordance with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (ai) such insurance is not available at a commercially reasonable rates rate and that such the subject hazards are not at the time not commonly insured against for by prudent owners of properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, located or (bii) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Propertyrate. Subject to Sections Section 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall also use reasonable effortsefforts to cause to be maintained for each REO Property no less insurance coverage than was previously required of the Obligor under the related Mortgage or Lease and at a minimum, consistent (i) hazard insurance with the Servicing Standarda replacement cost rider and (ii) comprehensive general liability insurance, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciationin each case, in an amount that is at least equal to customary for the lesser type and geographic location of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard; provided, that all such insurance shall be obtained from Qualified Insurers that, if they are providing casualty insurance, shall have a claims-paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and “A” by S&P. The cost of any such insurance coverage obtained by either the Property Manager or the Special Servicer shall be a Property Protection Advance to be paid by the Property Manager. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf Property Manager, as agent of and for the account of the applicable Issuer and the Indenture Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer Property Manager or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerTenant, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account 2.11 of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing AdvanceIndenture.
(b) The Property Manager or Special Servicer may satisfy its obligations under Section 3.07(a) by obtaining, maintaining or causing to be maintained a blanket or forced place insurance policy. If (i) applicable, the Master Servicer Property Manager or the Special Servicer shall obtain and maintain, or cause to be obtained and maintainedmaintained on behalf of each applicable Issuer, a master forced place insurance policy or a blanket policy (or master force-placed policy an endorsement to an existing policy) insuring against hazard losses (not otherwise insured by a Tenant or Borrower due to a default by such Tenant or Borrower under the insurance covenants of its Lease or Mortgage Loan or because a Tenant or Borrower permitted to self-insure fails to pay for casualty losses) on all of the Mortgage Loans or REO Propertiesapplicable Mortgaged Properties that it is required to service and administer, as applicable, then, to the extent such which policy shall (Ai) is be obtained from a Qualified Insurer having the Required Claimsa claims-Paying Ratingspaying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, and (Bii) provides provide protection equivalent to the individual policies otherwise required herein under Section 3.07(a). The Property Manager and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer shall bear the cost of any premium payable in respect of any such blanket policy (other than blanket policies specifically obtained for Mortgaged Properties or its corporate parentREO Properties) has long-term unsecured debt obligations without right of reimbursement; provided, that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and if the Master Servicer Property Manager or the Special Servicer, as the case may be, self-insures for its obligation causes any Mortgaged Property or REO Property to maintain the individual policies otherwise requiredbe covered by such blanket policy in order to satisfy such obligations, the Master incremental costs of such insurance applicable to such Mortgaged Property or REO Property shall constitute, and be reimbursable as, a Property Protection Advance (it being understood that such incremental costs incurred by the Special Servicer shall be paid by the Property Manager to the Special Servicer and that such payment shall constitute, and be reimbursable as, a Property Protection Advance). If the Property Manager or the Special Servicer, as the case may beapplicable, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance causes any Mortgaged Property or REO Property to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such covered by a blanket or master force-placed insurance policy, the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (which shall not include any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) shall be paid as a Property Protection Advance (it being understood that such incremental costs incurred by the Special Servicer shall be paid by the Property Manager to the Special Servicer and that such payment shall constitute, and be reimbursable as, a Property Protection Advance). Such policy may contain a deductible clause (not in excess of a customary amount), ) in which case the Master Servicer Property Manager or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), ) and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and Property Manager or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Indenture Trustee and Certificateholdersthe applicable Issuer, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy. Any payments on such policy shall be made to the Property Manager as agent of and for the account of the applicable Issuer, the Noteholders and the Indenture Trustee.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance PolicyProperty Manager, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer Back-Up Manager shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or REO Properties Assets exist as part of the Trust FundCollateral) keep in force with a Qualified Insurer having the Required Claims-Paying Ratingsa claims paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a fidelity bond in such form and amount as are consistent with does not adversely affect any rating assigned by any Rating Agency to the Servicing StandardNotes; provided, that, unless any Rating Agency then rating any Notes at the request of an Issuer states that the form or amount of any such fidelity bond would be the sole cause of or be a material reason for a downgrade, qualification or withdrawal of any rating then assigned by such Rating Agency to such Notes, the form and amount of such fidelity bond shall be deemed to not adversely affect any rating assigned by any Rating Agency to the Notes. The Master Servicer or Each of the Property Manager and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer Property Manager or the Special Servicer, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the TrusteeIssuers. So long as the long-term unsecured debt obligations Each of the Master Property Manager, the Special Servicer or and the Back-Up Manager shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Assets exist as part of the Collateral) also keep in force with a Qualified Insurer having a claims-paying ability rated at least “A: VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall name the Indenture Trustee as an additional insured and shall be in such partyform and amount as does not adversely affect any rating assigned by any Rating Agency to the Notes; provided, that, unless any Rating Agency then rating any Notes at the request of an Issuer states that the form or amount of any such fidelity bond would be the sole cause of or be a material reason for a downgrade, qualification or withdrawal of any rating then assigned by such Rating Agency to such Notes, the form and amount of such fidelity bond shall be deemed to not adversely affect any rating assigned by any Rating Agency to the Notes. Each of the Property Manager and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Property Manager or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without ten (10) days’ prior written notice to the Issuers. Each of the Property Manager and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Assets exist as part of the Collateral) also, on behalf of the Issuers, keep in force with a Qualified Insurer having a claims-paying ability rated at least “A:VIII” by A.M. Best’s corporaKey Rating Guide and at least “A” by S&P, a lessor’s general liability insurance policy or policies, which policy or policies shall be in such form and amount as does not adversely affect any rating assigned by any Rating Agency to the Notes; provided, that, unless any Rating Agency then rating any Notes at the request of an Issuer states that the form or amount of any such fidelity bond would be the sole cause of or be a material reason for a downgrade, qualification or withdrawal of any rating then assigned by such Rating Agency to such Notes, the form and amount of such fidelity bond shall be deemed to not adversely affect any rating assigned by any Rating Agency to the Notes. Any such general liability insurance policy shall provide that it may not be canceled without ten (10) days’ prior written notice to the Issuers and the Indenture Trustee. Any payments on such policy shall be made to the Property Manager as agent of and for the account of any applicable Issuer and the Indenture Trustee. The insurance described in this clause (c) shall be required to include coverage in respect of losses that may be sustained as a result of an officer’s or employee’s of the Property Manager or the Special Servicer misappropriation of funds and errors and omissions. If the Property Manager (or its corporate parent), the Special Servicer (or its corporate parent) or the Back-Up Manager (or its corporate parent), as applicable, are rated not lower than “A2” by ▇▇▇▇▇’▇, “A” by S&P and “A” by Fitch, the Property Manager, the Special Servicer or the Back-Up Manager, as applicable, may self-insure with respect to any insurance coverage or fidelity bond coverage required hereunder, in which case it shall not be required to maintain an insurance policy with respect to such coverage; provided, that Spirit Realty may not self-insure with respect to any such insurance coverage or fidelity bond.
Appears in 1 contract
Sources: Property Management and Servicing Agreement (Spirit Realty Capital, Inc.)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts (with respect to Mortgage Loans and (to the extent that the Trust Fund has an insurable interest) Specially Serviced Mortgaged Loans) and the Special Servicer (with respect to REO Properties) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall exercise such discretion in a manner consistent with the Servicing Standard and subject to the terms of this Section 3.07; and provided further that, if and to the extent that a Mortgage so permits, the related Mortgagor shall be required to exercise its reasonable best efforts to obtain the required insurance coverage from Qualified Insurers and required insurance coverage obtained by the Master Servicer shall be from Qualified Insurers. The cost of any such insurance coverage obtained by either the Master Servicer or the Special Servicer shall be a Servicing Advance to be paid by the Master Servicer pursuant to Section 3.03. If not required under the terms of the Mortgage or the Mortgage Loan Documents, the Majority Subordinate Certificateholder may request that earthquake insurance be secured for one or more Mortgaged Properties at the expense of the Majority Subordinate Certificateholder. Subject to Section 3.17(a), the Special Servicer shall also cause to be maintained for each REO Property no less insurance coverage than was previously required of the Mortgagor under the related Mortgage; provided that all such insurance shall be obtained from Qualified Insurers. All such insurance policies maintained by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to property and do not relate to an REO Property) a "standard" mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee (in the case of insurance maintained in respect of Mortgage Loans); (ii) shall be in the name of the Special Servicer (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan Documents; (vii) to the extent that the Mortgage or other Mortgage Loan Documents specifically require terrorism coverage or the Mortgage requires the related Mortgagor to carry "all risk" coverage, shall include terrorism coverage, unless the failure to obtain such terrorism coverage constitutes an Acceptable Insurance Default; and (viii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Notwithstanding the foregoing, the Special Servicer shall not be required to maintain obtain, and shall not be in default hereunder for failing to obtain, any insurance other than what for an REO Property that was previously required of the Mortgagor under the related Mortgage if (a) such insurance is not available at any rate; (b) such insurance is not available from a Qualified Insurer (provided that Special Servicer shall obtain such insurance from the next highest rated insurer offering such insurance at commercially reasonable rates); or (c) subject to the Master Servicer on a force-placed basis (rights of and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent consultation with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Controlling Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such the subject hazards are not at the time commonly insured against for by prudent owners of similar real properties in similar locales (but only by reference to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available that has been obtained by such owners at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”then current market rates). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, Loan or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties. In the event that the Special Servicer causes any REO Property to be covered by such blanket policy, the incremental cost of such insurance applicable to such REO Property (other than any minimum or standby premium payable for such policy whether or not any REO Property is covered thereby) shall be paid by the Master Servicer as applicablea Servicing Advance. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without for ten (10) days’ prior ' written notice to the TrusteeTrustee prior to any cancellation. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification, downgrade or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten days' written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Merrill Lynch Mortgage Investors Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In Each of the Master Servicer (in the case of each Mortgage Loan, Loans other than Specially Serviced Mortgage Loans) and the Master Special Servicer (in the case of Specially Serviced Mortgage Loans) shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower each Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for in respect of the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of (to the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless extent such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and coverage is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (terms as determined by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thator Special Servicer, in each caseas applicable, have the Required Claims-Paying Ratings at the time provided that any such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or determination that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and terms shall be consented to by the Majority Certificateholder of the Controlling Class); provided that such hazards are not at if any Mortgage permits the time commonly insured against for properties similar holder thereof to dictate to the related Mortgagor the insurance coverage to be maintained on such Mortgaged Property and located in Property, the Master Servicer or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for , as appropriate, shall impose such consent or consultation; provided, however, that upon the Special Servicer’s determination, insurance requirements as are consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer . If a Mortgagor fails to consult with the Subordinate Class Representative and/or Trust Advisormaintain such insurance, the Special Master Servicer will not be required to do so. If any such approval (at the direction of the Special Servicer has not been expressly denied within ninety in the case of a Specially Serviced Mortgage Loan) shall (90) days of to the Special Servicer’s receipt from the Master Servicer of extent available at commercially reasonable terms as determined by the Master Servicer’s , which shall be entitled to rely on an opinion of counsel or insurance consultants in making such determination, provided that, subject to the Servicing Standard, such final determination shall be consented to by the Majority Certificateholder of the Controlling Class) obtain such insurance (which may be through a master or single interest policy) and analysis the cost (including any deductible relating to such insurance and all information reasonably requested thereby and reasonably available to any out of pocket cost incurred by the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If obtaining advice of
(i) the Special Servicer Mortgagor is in the process of making a determination described above in this paragraph, then, during the period of such evaluation required by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent terms of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower Mortgage Loan to maintain terrorism such insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest becomes obligated by virtue of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer becoming located in writing that such Borrower does not intend to maintain area by virtue of such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (aremapping) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance terms of the related REO Mortgage Loan permit the mortgagee to require the Mortgagor to obtain such insurance, the Master Servicer (or in the case of a Specially Serviced Loan, the Special Servicer), shall promptly notify the Mortgagor of its obligation to obtain such insurance. If the Mortgagor fails to obtain such flood insurance within 120 days of such notification, the Master Servicer (or in the case of a Specially Serviced Mortgage Loan, butthe Special Servicer) shall obtain such insurance, in any event, in an amount sufficient to avoid the application cost of any co-insurance clause, (b) which shall be a comprehensive general liability insurance policy with coverage comparable to that which would Servicing Advance and shall be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to recoverable by the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required Master Servicer pursuant to the related Mortgage Loan DocumentsSection 3.05(a); provided, however, provided that the Master Servicer or Special Servicer shall not be required to incur any such cost if such Advance would constitute a Nonrecoverable Servicing Advance; provided further, if the Master Servicer or Special Servicer, as applicable, shall determine that the payment of such amount is (i) necessary to preserve the related Mortgaged Property and (ii) would be in any event the best interest of the Certificateholders, then the Master Servicer shall make such payment from amounts in the Certificate Account. Subject to maintain or obtain Section 3.17(a), the insurance coverage otherwise described by this paragraph beyond what is Special Servicer shall also use reasonable efforts to cause to be maintained for each REO Property (to the extent available at commercially reasonable rates and terms) no less insurance coverage than was previously required of the Mortgagor under the related Mortgage or as is consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer (in the case of Mortgaged Properties) or the Special Servicer (in the case of REO Properties) on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with applicable law, the terms of the related Mortgage Loan documents and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid the outstanding principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence but shall not limit the rights of be recoverable by the Master Servicer or Special Servicer on behalf of the Trust as a Servicing Advance pursuant to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to Section 3.05(a).
(i) If the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) obtains and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintains a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or Mortgaged Properties and/or REO Properties, as applicableProperties for which it is responsible to cause the maintenance of insurance hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related such Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any a Mortgaged Property securing a Mortgage Loan or any an REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by (or into the Master Servicer, Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (Loan, or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket policy maintained by it in a timely fashion in accordance with the terms of such policy.
(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-force placed insurance policy, which provides protection equivalent to the individual policies otherwise required, the Master Servicer or Special Servicer shall conclusively be deemed to have satisfied its respective obligations to cause hazard insurance to be maintained on such Mortgaged Properties and/or REO Properties. Such policy may contain a deductible clause, in which case the Master Servicer or the Special Servicer, as applicable, shall in the event that (x) there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and (y) 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 Certificate Account (or into the Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) 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. The Master Servicer and the Special Servicer each agrees to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such master force placed insurance policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard term of this Agreement a blanket fidelity bond and the terms an errors and conditions omissions insurance policy covering its officers and employees and other persons acting on behalf of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard it in connection with any claim its activities under this Agreement and naming the Trustee as an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) additional insured. The amount of coverage shall be (subject at least equal to Section 3.11(h) and Section 3.19(b)) paid bythe coverage that would be required by FNMA or FHLMC, and reimbursable towhichever is greater, with respect to the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be, were servicing and administering the Mortgage Loans and/or the REO Properties for which it is responsible hereunder for FNMA or FHLMC. Such fidelity Coverage of the Master Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of such Person and providing the coverage required by this Section 3.07(c) shall provide that it may not satisfy the requirements of this Section 3.07(c).
(d) All insurance coverage required to be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of maintained by the Master Servicer or Special Servicer, as applicable, under this Section 3.07 shall be obtained from Qualified Insurers having a claims paying ability rating (or the obligations of which are guaranteed or backed by a company having such party’s corporaclaims paying ability rating or insurance financial strength rating, as applicable) of not less than (x) "A" by Standard & Poor's and (y) "A2" by ▇▇▇▇▇'▇; provided, however, that the requirements of clauses (x) and (y) shall not be applicable with respect to Standard & Poor's or ▇▇▇▇▇'▇, as applicable, if the related Rating Agency shall have confirmed in writing that an insurance company with a lower claims paying ability rating shall not result, in and of itself, in a downgrade, qualification or withdrawal of the then current ratings by such Rating Agency of any Class of Certificates.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Gmac Commercial Mortgage Securities Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Serviced Mortgage LoanLoan or Serviced Loan Combination, the applicable Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the applicable Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Serviced Mortgage Loan and or Serviced Loan Combination or (ii) the outstanding principal balance of such Serviced Mortgage LoanLoan or Serviced Loan Combination, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the applicable Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Serviced Mortgage Loan or Serviced Loan Combination unless such insurance policy was in effect at the time of the origination of such Serviced Mortgage Loan or Serviced Loan Combination pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable ratesrates and the Trustee has an insurable interest;
(B) if and to the extent that any Serviced Mortgage Loan or Serviced Loan Combination grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the applicable Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the applicable Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Serviced Mortgage Loan to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the applicable Master Servicer be required to cause the Borrower under any Serviced Mortgage Loan to maintain, or itself obtain, insurance coverage that the applicable Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the applicable Master Servicer to cause the Borrower under any Serviced Mortgage Loan to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the applicable Master Servicer itself is required to maintain insurance that the Borrower under any Serviced Mortgage Loan does not maintain, the applicable Master Servicer shall not be required to maintain insurance other than what is available to the applicable Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower under any Serviced Mortgage Loan fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the applicable Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the applicable Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the applicable Special Servicer’s request for such consent or consultation; provided, however, that upon the applicable Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the applicable Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the applicable Special Servicer will not be required to do so. If any such approval of the applicable Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the applicable Master Servicer of the applicable Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the applicable Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the applicable Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the applicable Special Servicer (or, to the extent applicable, during the period that the applicable Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the applicable Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The applicable Master Servicer shall notify the applicable Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder and (if a Serviced Loan Combination is involved) the related Serviced Pari Passu Companion Loan Holder(s) if the applicable Master Servicer determines that any Borrower under a Serviced Mortgage Loan has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower under a Serviced Mortgage Loan has notified the applicable Master Servicer in writing that such Borrower does not intend to maintain such insurance and the applicable Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. .
(b) Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each Administered REO Property, the applicable Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such Administered REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months (or at least eighteen (18) months, in the case of an Administered REO Property whose related REO Mortgage Loan had an initial principal balance exceeding $35,000,000), in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that both of the following conditions and/or limitations shall apply:
(A) the applicable Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what above unless the Trustee has an insurable interest; and
(B) the applicable Special Servicer shall not be required to maintain or obtain the insurance coverage otherwise described above to the extent that the coverage is not available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the applicable Master Servicer (or the applicable sub-servicer) on behalf of the Trustee, in the case of insurance maintained in respect of a Serviced Mortgage LoanLoan or Serviced Loan Combination, or shall name the Trustee as the insured, with loss payable to the applicable Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an Administered REO Property. Any amounts collected by the applicable Master Servicer or the applicable 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account (or, to the extent the loss affects a Serviced Pari Passu Companion Loan Holder, in the Serviced Pari Passu Companion Loan Custodial Account, as applicable), in each case as appropriate in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Serviced Mortgage Loan, or in the REO Account of the applicable Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the applicable Master Servicer or applicable Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage LoanLoan or Serviced Loan Combination, notwithstanding that the terms of such Serviced Mortgage Loan or Serviced Loan Combination so permit; provided, however, that this sentence shall not limit the rights of the applicable Master Servicer or applicable Special Servicer on behalf of the Trust (and, if applicable, the Serviced Pari Passu Companion Loan Holders) to enforce any obligations of the related Borrower under such Serviced Mortgage LoanLoan or Serviced Loan Combination. Costs to the applicable Master Servicer or the applicable Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the applicable Master Servicer or applicable Special Servicer, as the case may be, as a Servicing Advance.
(bc) If (i) the applicable Master Servicer or the applicable Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Serviced Mortgage Loans Loans, Serviced Loan Combinations or Administered REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the applicable Master Servicer or applicable Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A-” by Fitch and “A2” by ▇▇▇▇▇’▇ and “A” by Fitch or has received a Rating Agency Confirmation from each Rating Agency with respect to which such rating is not satisfied, and the applicable Master Servicer or the applicable Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the applicable Master Servicer or the applicable Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the applicable Master Servicer or the applicable Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Serviced Mortgage Loan, Serviced Loan Combination or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account (or, to the extent the loss affects the Serviced Pari Passu Companion Loan Holder(s), in the Serviced Pari Passu Companion Loan Custodial Account, as applicable) maintained by the applicable Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Serviced Mortgage Loan or Serviced Loan Combination (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The applicable Master Servicer and the applicable Special Servicer shall each prepare and present, on behalf of itself, the Trustee and CertificateholdersCertificateholders and, if applicable, the Serviced Pari Passu Companion Loan Holders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cd) With respect to each Performing Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the applicable Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the applicable Master Servicer shall notify the applicable Special Servicer to such effect and the applicable Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaacc
Appears in 1 contract
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2013-C16)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the Master The Servicer shall use its reasonable efforts consistent with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to by the terms of the related Mortgage Note, or if the Mortgagor does not so maintain, shall itself maintain, for each Mortgage Loan Documents all insurance coverage as is required under the related Mortgage (to the extent that the Trustee has an insurable interest and such insurance coverage is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) aboveStandards). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon if any Mortgage permits the Special Servicer’s determinationholder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Servicer shall impose such insurance requirements as are consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyStandards. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that Loan. All Insurance Policies maintained by the Servicer or the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall (i) contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (except in the case of insurance maintained in respect of a Mortgage LoanREO Properties), or shall (ii) be in the name of the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), (iii) include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing Mortgaged Property or the REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions, (iv) include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents), (v) be noncancellable without 30 days prior written notice to the insured party (except in the case of nonpayment, in which case such policy shall not be cancelled without 10 days prior notice) and (vi) be issued by a Qualified Insurer authorized under applicable law to issue such Insurance Policies. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies Insurance Policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing StandardStandards and the provisions of the related Mortgage Loan) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c3.05(a), in the case of amounts received in respect of an REO Property. Any cost costs incurred by the Master Servicer or Special Servicer in maintaining any such insurance Insurance Policies in respect of Mortgage Loans (other than REO Properties)
(i) if the Mortgagor defaults on its obligation to do so, shall be advanced by the Servicer as a Servicing Advance and will be charged to the related Mortgagor and (ii) shall not, for purposes hereof, including of calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit . Any cost incurred by the rights of the Master Servicer or Special Servicer on behalf in maintaining any such Insurance Policies with respect to REO Properties shall be an expense of the Trust to enforce any obligations payable out of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies REO Account pursuant to this Section 3.07 shall (subject to Section 3.11(h3.16(c) and Section 3.19(b)) be paid byor, and reimbursable toif the amount on deposit therein is insufficient therefor, advanced by the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy Insurance Policy with a Qualified Insurer insuring against fire and hazard losses on all of the Mortgage Loans or REO Properties, as applicablethe case may be, required to be serviced and administered hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) Insurance Policy provides protection equivalent to the individual policies otherwise required herein and in required, the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause fire and hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy Insurance Policy may contain a deductible clause (not in excess of a customary amount)clause, in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, Servicer shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a fire and hazard insurance policy Insurance Policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyInsurance Policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with of such loss or losses that would have been covered under the individual policy but are not covered under the blanket Insurance Policy because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (orLoan, or in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master In connection with its activities as administrator and Servicer and of the Special Mortgage Loans, the Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it Insurance Policy in a timely fashion in accordance with the terms of such policy. The Special Servicer, to the extent consistent with the Servicing Standards, may maintain, earthquake insurance on REO Properties, provided coverage is available at commercially reasonable rates, the cost of which shall be a Servicing Advance.
(ii) If the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by a master single interest or force-placed insurance policy with a Qualified Insurer naming the Servicer or the Special Servicer on behalf of the Trustee as the loss payee, then to the extent such Insurance Policy provides protection equivalent to the individual policies otherwise required, the Servicer or the Special Servicer shall conclusively be deemed to have satisfied its obligation to cause such insurance to be maintained on the related Mortgage Properties and REO Properties. In the event the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by such master single interest or force-placed insurance policy, the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) shall be paid by the Servicer as a Servicing Advance. Such master single interest or force-placed policy may contain a deductible clause, in which case the Servicer or the Special Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such policy had it been maintained, deposit into the Certificate Account from its own funds the amount not otherwise payable under the master single or force-placed interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing Standard.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master term of this Agreement a blanket fidelity bond and an errors and omissions Insurance Policy with a Qualified Insurer covering the Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard 's and the terms Special Servicer's, as applicable, officers and conditions employees acting on behalf of such Environmental Insurance Policy to make a claim thereunder the Servicer and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge in connection with its activities under this Agreement. Notwithstanding the foregoing, so long as the long term debt or the deposit obligations or claims-paying ability of any event giving rise the Servicer is rated at least "A" by S&P and Fitch, the Servicer shall be allowed to provide self-insurance with respect to a claim under fidelity bond and an Environmental Errors and Omissions Insurance Policy. The amount of coverage shall be at least equal to the coverage that would be required by F▇▇▇▇▇ M▇▇ or F▇▇▇▇▇▇ Mac, whichever is greater, with respect to the Servicer or the Special Servicer shall take reasonable actions as are in accordance with if the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer, as applicable, were servicing and administering the Mortgage Loans or Specially Serviced Mortgage Loans, as applicable, for F▇▇▇▇▇ Mae or F▇▇▇▇▇▇ Mac. Coverage of the Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of the Servicer or the Special Servicer and providing the coverage required by this Section 3.07(c) shall be (subject satisfy the requirements of this Section 3.07(c). The Special Servicer and the Servicer will promptly report in writing to Section 3.11(h) the Trustee any material changes that may occur in their respective fidelity bonds, if any, and/or their respective errors and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Serviceromissions Insurance Policies, as the case may be, as a Servicing Advance.
(d) and will furnish to the Trustee copies of all binders and policies or certificates evidencing that such bonds, if any, and insurance policies are in full force and effect. The Master Servicer and the Special Servicer shall each at all times during cause the term Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Agreement Section 3.07(c).
(ord) At the time the Servicer determines in accordance with the Servicing Standard that any Mortgaged Property shall be in a federally designated special flood hazard area (and such flood insurance has been made available), the Servicer will use reasonable efforts to cause the related Mortgagor (in accordance with applicable law and the case terms of the Special ServicerMortgage Loan documents) to maintain, and, if the related Mortgagor shall default in its obligation to so maintain, shall itself maintain to the extent available at all times during commercially reasonable rates (as determined by the term Servicer in accordance with the Servicing Standards) and to the extent the Trustee, as mortgagee, has an insurable interest therein, flood insurance in respect thereof, but only to the extent the related Mortgage Loan permits the mortgagee to require such coverage and the maintenance of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are coverage is consistent with the Servicing StandardStandards. 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 insurance which is available under the National Flood Insurance Act of 1968, as amended. If the cost of any insurance described above is not borne by the Mortgagor, the Servicer shall promptly make a Servicing Advance for such costs.
(e) During all such times as any REO Property shall be located in a federally designated special flood hazard area, the Special Servicer will cause to be maintained, to the extent available at commercially reasonable rates (as determined by the Special Servicer in accordance with the Servicing Standards), a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration in an amount representing coverage not less than the maximum amount of insurance which is available under the National Flood Insurance Act of 1968, as amended. The Master Servicer or Special Servicer cost of any such flood insurance with respect to an REO Property shall be deemed an expense of the Trust payable out of the related REO Account pursuant to have complied with Section 3.16(c) or, if the foregoing provision if an Affiliate thereof has such fidelity bond coverage andamount on deposit therein is insufficient therefor, paid by the terms of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaa Servicing Advance.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Jp Morgan Chase Commercial Mortgage Securities Corp)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause each Borrower with respect to the related Borrower Mortgage Loans for which it acts as Master Servicer to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage from Qualified Insurers, and, if such the Borrower does not so maintain, the such Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) maintained, for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due including each Mortgaged Property relating to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such any Specially Serviced Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably requirerequired, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower is required to obtain the requisite insurance coveragemaintain, the such Master Servicer shall (to the extent exercise such discretion in a manner consistent with the Servicing Standard) use efforts consistent , with a view towards requiring insurance comparable to that required under other Mortgage Loans with express provisions governing such matters and, in any event, business interruption or rental loss insurance for at least 12 months; and provided, further, that, if and to the Servicing Standard to cause extent that any such Mortgage so permits, the related Borrower shall be required to obtain the requisite required insurance coverage from Qualified Insurers that, in each case, have a financial strength or claims-paying rating no lower than two rating categories below the Required Claimshighest rated Certificates outstanding, and in any event no lower than "A" from S&P and "A2" from Moody's (or in such other form and amount or issued by an insurer wit▇ ▇▇▇▇ other financial strength or claims-Paying Ratings at paying ability as would not, as confirmed in writing by the time relevant Rating Agency, result in an Adverse Rating Event); and provided, further, that such Master Servicer shall be required to maintain such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under upon the related Mortgage Loan Documents;
(D) in no event shall Borrower's failure to do so only to the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage extent that the Master Servicer has determined is either (i) not available at any rate or the Trustee as mortgagee has an insurable interest, (ii) not such insurance is available at commercially reasonable rates (as determined by the Master Servicer and approved by the Controlling Class Representative, subject to Section 3.24(b) and (iii) any related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property Servicing Advance is located;
(E) the reasonable efforts of deemed by the Master Servicer to cause be recoverable from collections on the Borrower to maintain insurance shall be conducted in a manner related Mortgage Loan; provided, that takes into account the insurance that would then be available to if such Servicing Advance is deemed nonrecoverable the Master Servicer on (or, at the direction of the Special Servicer if a force-placed basis; and
(FSpecially Serviced Mortgage Loan or an REO Property is involved) to shall pay such amounts out of the extent applicable Collection Account provided, further, that the Master Servicer itself (or the Special Servicer, if a Specially Serviced Mortgage Loan or an REO Property is required involved) has determined in accordance with the Servicing Standard that making such payment is in the best interests of the Certificateholders (as a collective whole), as evidenced in each case by any Officer's Certificate delivered promptly to maintain insurance that the Borrower does not maintainTrustee, the Master Depositor and the Controlling Class Representative, setting forth the basis for such determination and accompanied by any information that such Person may have obtained that supports such determination. Subject to Section 3.17(b), the Special Servicer shall not also cause to be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain maintained for each REO Property with respect to the related Mortgaged Property (i) specific casualty Mortgage Loans for which it acts as Special Servicer no less insurance coverage providing for “special” form coverage that does not specifically exclude(to the extent available at commercially reasonable rates, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused as determined by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Controlling Class Representative, that either (asubject to Section 3.24(b) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain than was previously required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b)and, and/or 3.24at a minimum, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full hazard insurance with a replacement cost of improvements at such REO Property or rider, (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve 12 months, and (12iii) monthscommercial general liability insurance, in each case if so required pursuant to case, in an amount customary for the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates type and geographic location of such REO Property and consistent with the Servicing Standard; provided that all such insurance shall be obtained from Qualified Insurers that, in each case, shall have a financial strength or claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than "A" from S&P and "A2" from Moody's (or in such other form and amount or issued by an insurer wit▇ ▇▇▇▇ other financial strength or claims-paying ability as would not, as confirmed in writing by the relevant Rating Agency, result in an Adverse Rating Event). All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage LoanLoans), or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of REO Properties), and shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04or any related A/B Loan Pair Custodial Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, by and reimbursable to, the to such Master Servicer or Special Servicer, as the case may beapplicable, as a Servicing Advance. Subject to the preceding paragraph, the Master Servicer shall use reasonable efforts to cause the Borrower to maintain or, if the Borrower does not so maintain, the Master Servicer will maintain all-risk casualty insurance or extended coverage insurance (with special form coverage) (the cost of which will be payable as a Servicing Advance), which does not contain any carve-out for terrorist or similar acts; provided, however, the Master Servicer shall not require any Borrower to obtain or maintain insurance in excess of the amounts of coverage and deductibles required by the related Mortgage Loan Documents or the related Mortgage Loan Seller in connection with the origination of a Mortgage Loan unless such Master Servicer determines, in accordance with the Servicing Standard, that such insurance required at origination would not be prudent for Mortgaged Property of the same type as the related Mortgaged Property. The Master Servicer shall not be required to call a default under a Mortgage Loan if the related Borrower fails to maintain such insurance, and the Master Servicer shall not be required to maintain such insurance, to the extent, if any, that the cost of such insurance exceeds the maximum cost that the related Borrower is required to incur under the related Mortgage Loan Documents, or if the Master Servicer has determined in accordance with the Servicing Standard that either (i) such insurance is not available at commercially reasonable rates or that such hazards are not at the time commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which such Mortgaged Property is located (which determination shall be subject to the approval of the Controlling Class Representative, subject to the limitations of Section 3.24(b), or (ii) such insurance is not available at any rate.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-force placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having a financial strength or claims-paying rating no lower than "A" from S&P and "A2" from Moody's or having such other financial strength or claims-paying abil▇▇▇ ▇▇▇ing as would not, as confirmed in writing by the Required Claims-Paying Ratingsrelevant Rating Agency, result in an Adverse Rating Event, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the required, such Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-force placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-force placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With Promptly after (but in no event more than 30 days after) the Closing Date, with respect to each Performing of the Mortgage Loan that is subject to Loans for which it acts as Master Servicer covered by an Environmental Insurance Policy, if the Master Servicer shall notify the insurer under such Environmental Insurance Policy and take all other action necessary for the Trustee, on behalf of the Certificateholders, to be an insured (and for such Master Servicer, on behalf of the Trust, to make claims) under such Environmental Insurance Policy. In the event that the Master Servicer has actual knowledge of any event (an “"Insured Environmental Event”") giving rise to a claim under an any Environmental Insurance PolicyPolicy in respect of any Mortgage Loan covered thereby, the such Master Servicer shall notify shall, in accordance with the Special Servicer to terms of such effect Environmental Insurance Policy and the Master Servicer Servicing Standard, timely make a claim thereunder with the appropriate insurer and shall take reasonable such other actions as are in accordance with the Servicing Standard and the terms and conditions of which are necessary under such Environmental Insurance Policy in order to make a claim thereunder and achieve realize the payment full value thereof for the benefit of all amounts to which the Trust is entitled thereunderCertificateholders. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer If any other party hereto has actual knowledge of an Insured Environmental Event with respect to any event giving rise to a claim under Mortgage Loan covered by an Environmental Insurance PolicyPolicy to this Agreement, the Special Servicer such party shall promptly so notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees fees, premiums or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any such claim under an Environmental Insurance Policy described above (whether shall be paid by the Master Servicer or the Special Servicer) and shall be (subject reimbursable to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable toit as a Servicing Advance. With respect to each Environmental Insurance Policy that relates to one or more Mortgage Loans, the Master Servicer shall review and familiarize itself with the terms and conditions relating to enforcement of claims and shall monitor the dates by which any claim must be made or any action must be taken under such policy to realize the full value thereof for the benefit of the Certificateholders in the event the Master Servicer has actual knowledge of an Insured Environmental Event giving rise to a claim under such policy. In the event that the Master Servicer receives notice of any termination of any Environmental Insurance Policy that relates to one or more Mortgage Loans, such Master Servicer shall, within five Business Days after receipt of such notice, notify the Special Servicer, the Controlling Class Representative, the Rating Agencies and the Trustee of such termination in writing. Upon receipt of such notice, such Master Servicer shall address such termination in accordance with Section 3.07(a) in the same manner as it would the case may betermination of any other Insurance Policy required under the related Mortgage Loan Documents. Any legal fees, premiums or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with a resolution of such termination of an Environmental Insurance Policy shall be paid by the Master Servicer and shall be reimbursable to it as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the Required Claims-Paying Ratingshighest rated Certificates outstanding, and in any event no lower than "A" from S&P and "A2" from Moody's, a fidelity bond in such form and amount as are consistent would permit it t▇ ▇▇ ▇ qualified Fannie Mae seller-servicer of multifamily mortgage loans (or in such ▇▇▇▇▇ f▇▇▇ and amount or issued by an insurer with such other financial strength or claims-paying ability rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Servicing StandardTrustee by the relevant Rating Agency). The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ ' prior written notice to the Trustee. So long as The Master Servicer and the long-Special Servicer shall at all times during the term unsecured debt obligations of this Agreement (or, in the case of the Master Servicer or Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties as to which it is the Special Servicer exist as part of the Trust Fund) also keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than "A" from S&P and "A2" from Moody's, a policy or policies of insurance covering loss occasioned b▇ ▇▇▇ ▇rrors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified Fannie Mae seller-servicer of multifamily mortgage loans (or in such ▇▇▇▇▇ f▇▇▇ and amount or issued by an insurer with such other financial strength or claims-paying rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Trustee by the relevant Rating Agency). The Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Serv
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Credit Suisse Commercial Mortgage Trust Series 2006-C3)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Serviced Mortgage LoanLoan or Serviced Loan Combination, the applicable Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the applicable Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Serviced Mortgage Loan and or Serviced Loan Combination or (ii) the outstanding principal balance of such Serviced Mortgage LoanLoan or Serviced Loan Combination, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or (subject to the Servicing Standard) that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the applicable Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Serviced Mortgage Loan or Serviced Loan Combination unless such insurance policy was in effect at the time of the origination of such Serviced Mortgage Loan or Serviced Loan Combination pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable ratesrates and the Trustee has an insurable interest;
(B) if and to the extent that any Serviced Mortgage Loan or Serviced Loan Combination grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the applicable Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the applicable Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Serviced Mortgage Loan to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the applicable Master Servicer be required to cause the Borrower under any Serviced Mortgage Loan to maintain, or itself obtain, insurance coverage that the applicable Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the applicable Master Servicer to cause the Borrower under any Serviced Mortgage Loan to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the applicable Master Servicer itself is required to maintain insurance that the Borrower under any Serviced Mortgage Loan does not maintain, the applicable Master Servicer shall not be required to maintain insurance other than what is available to the applicable Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower under any Serviced Mortgage Loan fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the applicable Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the applicable Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the applicable Special Servicer’s request for such consent or consultation; provided, however, that upon the applicable Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the applicable Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the applicable Special Servicer will not be required to do so. If any such approval of the applicable Special Servicer has not been expressly denied within ninety (90) days of the applicable Special Servicer’s receipt from the applicable Master Servicer of the applicable Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the applicable Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the applicable Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the applicable Special Servicer (or, to the extent applicable, during the period that the applicable Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the applicable Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The applicable Master Servicer shall notify the applicable Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder and (if a Serviced Loan Combination is involved) the related Serviced Pari Passu Companion Loan Holder(s) if the applicable Master Servicer determines that any Borrower under a Serviced Mortgage Loan has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower under a Serviced Mortgage Loan has notified the applicable Master Servicer in writing that such Borrower does not intend to maintain such insurance and the applicable Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. .
(b) Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each Administered REO Property, the applicable Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such Administered REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million 1,000,000 per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months (or at least eighteen (18) months, in the case of an Administered REO Property whose related REO Mortgage Loan had an initial principal balance exceeding $35,000,000), in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, provided that both of the following conditions and/or limitations shall apply:
(A) the applicable Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what above unless the Trustee has an insurable interest; and
(B) the applicable Special Servicer shall not be required to maintain or obtain the insurance coverage otherwise described above to the extent that the coverage is not available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the applicable Master Servicer (or the applicable sub-servicer) on behalf of the Trustee, in the case of insurance maintained in respect of a Serviced Mortgage LoanLoan or Serviced Loan Combination, or shall name the Trustee as the insured, with loss payable to the applicable Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an Administered REO Property. Any amounts collected by the applicable Master Servicer or the applicable 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account or, to the extent the loss affects a Serviced Pari Passu Companion Loan Holder, in the Serviced Pari Passu Companion Loan Custodial Account, as applicable, in each case as appropriate in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Serviced Mortgage Loan, or in the REO Account of the applicable Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the applicable Master Servicer or applicable Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage LoanLoan or Serviced Loan Combination, notwithstanding that the terms of such Serviced Mortgage Loan or Serviced Loan Combination so permit; provided, however, that this sentence shall not limit the rights of the applicable Master Servicer or applicable Special Servicer on behalf of the Trust (and, if applicable, any related Serviced Pari Passu Companion Loan Holders) to enforce any obligations of the related Borrower under such Serviced Mortgage LoanLoan or Serviced Loan Combination. Costs to the applicable Master Servicer or the applicable Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the applicable Master Servicer or applicable Special Servicer, as the case may be, as a Servicing Advance.
(bc) If (i) the applicable Master Servicer or the applicable Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the any Serviced Mortgage Loans Loans, Serviced Loan Combinations or Administered REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the applicable Master Servicer or applicable Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2A (low)” by ▇DBRS (or, if not rated by DBRS, an equivalent (or higher) rating by any two other NRSROs (which may include Fitch and M▇▇▇▇’▇ and ▇)), “AA-” by Fitch and “A3” by M▇▇▇▇’▇, or it has received a Rating Agency Confirmation from each Rating Agency with respect to which such rating is not satisfied, and the applicable Master Servicer or the applicable Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the applicable Master Servicer or the applicable Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the applicable Master Servicer or the applicable Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Serviced Mortgage Loan, Serviced Loan Combination or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account (or, to the extent the loss affects any Serviced Pari Passu Companion Loan Holder(s), in the Serviced Pari Passu Companion Loan Custodial Account, as applicable) maintained by the applicable Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Serviced Mortgage Loan or Serviced Loan Combination (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The applicable Master Servicer and the applicable Special Servicer shall each prepare and present, on behalf of itself, the Trustee and CertificateholdersCertificateholders and, if applicable, any related Serviced Pari Passu Companion Loan Holders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cd) With respect to each Performing Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the applicable Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaunde
Appears in 1 contract
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2013-C18)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In Each of the Master Servicer (in the case of Mortgage Loans other than Specially Serviced Mortgage Loans) and the Special Servicer (in the case of Specially Serviced Mortgage Loans) shall use reasonable efforts to cause each Mortgagor to maintain in respect of the related Mortgaged Property all insurance coverage as is required under the related Mortgage; provided that if any Mortgage Loanpermits the holder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall use reasonable efforts impose such insurance requirements as are consistent with the Servicing Standard to cause the related Borrower Standard. If a Mortgagor fails to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintaininsurance, the Master Servicer will itself cause (at the direction of the Special Servicer in the case of a Specially Serviced Loan) shall (to the extent available at commercially reasonable terms) obtain such insurance (which may be maintained with Qualified Insurers through a master or single interest policy) and the cost (including any deductible relating to such insurance) of such insurance (or in the case of a master or single interest policy, the incremental cost (including any deductible relating to such insurance) of such insurance relating to the specific Mortgaged Property), shall be a Servicing Advance and shall be recoverable by the Master Servicer pursuant to Section 3.05(a). If at any time a Mortgaged Property is located in an area identified in the Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Federal Emergency Management Agency as having special flood hazards or it becomes located
(i) the Required Claims-Paying Ratings) for Mortgagor is required by the terms of the Mortgage Loan to maintain such insurance (or becomes obligated by virtue of the related Mortgaged Property (xbecoming located in such area by virtue of such remapping) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and or (ii) the outstanding principal balance terms of the Mortgage Loan permit the mortgagee to require the Mortgagor to obtain such insurance, the Master Servicer (or in the case of a Specially Serviced Loan, the Special Servicer), shall promptly notify the Mortgagor of its obligation to obtain such insurance. If the Mortgagor fails to obtain such flood insurance within 120 days of such Mortgage notification, the Master Servicer (or in the case of a Specially Serviced Loan, butthe Special Servicer) shall obtain such insurance, in any event, in an amount sufficient the cost of which shall be a Servicing Advance and shall be recoverable by the Master Servicer or Special Servicer pursuant to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsSection 3.05(a); provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer or Special Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If incur any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, cost if such approval shall be deemed to have been granted. If the Special Servicer is in the process of making Advance would constitute a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyNonrecoverable Servicing Advance. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall also use reasonable efforts, consistent with the Servicing Standard, efforts to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide cause to be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and terms) no less insurance coverage than was previously required of the Mortgagor under the related Mortgage or as is consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer (in the case of Mortgaged Properties) or the Special Servicer (in the case of REO Properties) on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with applicable law, the terms of the related Mortgage Loan documents and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid the outstanding principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence but shall not limit the rights of be recoverable by the Master Servicer or Special Servicer on behalf of the Trust as a Servicing Advance pursuant to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to Section 3.05(a).
(i) If the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) obtains and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintains a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or Mortgaged Properties and/or REO Properties, as applicableProperties for which it is responsible to cause the maintenance of insurance hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related such Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any a Mortgaged Property securing a Mortgage Loan or any an REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by (or into the Master Servicer, Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (Loan, or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket policy maintained by it in a timely fashion in accordance with the terms of such policy.
(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-force placed insurance policy, which provides protection equivalent to the individual policies otherwise required, the Master Servicer or Special Servicer shall conclusively be deemed to have satisfied its respective obligations to cause hazard insurance to be maintained on such Mortgaged Properties and/or REO Properties. Such policy may contain a deductible clause, in which case the Master Servicer or the Special Servicer, as applicable, shall in the event that (x) there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and (y) 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 Certificate Account (or into the Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) 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. 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 master force placed insurance policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard term of this Agreement a blanket fidelity bond and the terms an errors and conditions omissions insurance policy covering its officers and employees and other persons acting on behalf of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard it in connection with any claim its activities under this Agreement and naming the Trustee as an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) additional insured. The amount of coverage shall be (subject at least equal to Section 3.11(h) and Section 3.19(b)) paid bythe coverage that would be required by FNMA or FHLMC, and reimbursable towhichever is greater, with respect to the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be, were servicing and administering the Mortgage Loans and/or REO Properties for which it is responsible hereunder for FNMA or FHLMC. Such fidelity Coverage of the Master Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of such Person and providing the coverage required by this Section 3.07(c) shall provide that it may not satisfy the requirements of this Section 3.07(c).
(d) All insurance coverage required to be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of maintained by the Master Servicer or Special Servicer, as applicable, under this Section 3.07 shall be obtained from Qualified Insurers having a claims paying ability rating (or the obligations of which are guaranteed or backed by a company having such party’s corporaclaims paying ability rating or insurance financial strength rating, as applicable) of not less than (x) "A" by Standard & Poor's and (y) if rated by Fitch, "A" by Fitch (or, if not rated by Fitch, rated A-IX or better by A.M. Best); provided, however, that the requirements of clauses (x) and (y) shall not be applicable with respect to Standard & Poor's or Fitch, as applicable, if the related Rating Agency shall have confirmed in writing that an insurance company with a lower claims paying ability rating shall not result, in and of itself, in a downgrade, qualification or withdrawal of the then current ratings by such Rating Agency of any class of Certificates.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Gmac Commercial Mortgage Securities Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case Each of each Mortgage Loan, the Master Servicer shall and the Special Servicer shall, as to those Mortgage Loans it is obligated to service hereunder, use reasonable its best efforts consistent in accordance with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower the related Mortgagor does not so maintain, the Master Servicer will (even in the case of Specially Serviced Mortgage Loans) shall itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property maintain (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal subject to the lesser provisions of (i) the full replacement cost of improvements securing such Mortgage Loan this Agreement regarding Nonrecoverable Advances, and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, further subject to applicable lawSection 3.11(h) hereof), under to the related Mortgage Loan Documents; provided that all extent the Trustee, as mortgagee on behalf of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant Certificateholders, has an insurable interest and to the terms of the related Mortgage Loan Documents and is extent available at commercially reasonable rates;
) all insurance coverage as is required under the related Mortgage (B) subject to applicable law); provided that if and any Mortgage permits the holder thereof to dictate to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to Mortgagor the insurance provider from whom the related Borrower is coverage to obtain the requisite insurance coveragebe maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall (to the extent impose such insurance requirements as are consistent with the Servicing Standard) use efforts consistent with the Servicing Standard . The Special Servicer shall cause to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thatbe maintained for each REO Property, in each case, have case with an insurer that possesses the Required Claims-Paying Ratings at the time such policy is purchased, no less insurance coverage is obtained;
(C) than was previously required of the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, related Mortgagor under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty Mortgage did not so require, hazard insurance, public liability insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist and business interruption or similar acts, and/or (ii) specific rent loss insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, in such insurance upon terms not materially less favorable than those in place amounts as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry are consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with be reimbursed for the premium costs thereof as a Servicing Standard, Advance pursuant to maintain with Qualified Insurers having and to the Required Claims-Paying Ratings extent permitted under Section 3.05
(a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, the Mortgaged Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer Servicer, as applicable, in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy insuring against hazard losses on any or all of the Mortgage Loans Mortgaged Properties (in the case of the Master Servicer) or REO Properties, as applicableProperties (in the case of the Special Servicer), then, to the extent such policy (Ai) is obtained from a Qualified Insurer having that possesses the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable, so covered, and the premium costs thereof shall be, if and to the extent they are specifically attributable either to a specific Mortgaged Property during any period that the related Mortgagor has failed to maintain the hazard insurance required under the related Mortgage Loan in respect of such Mortgaged Property or to a specific REO Property, a Servicing Advance reimbursable pursuant to and to the extent permitted under Section 3.05(a); provided that, to the extent that such premium costs are attributable to properties other than Mortgaged Properties and/or REO Properties or are attributable to Mortgaged Properties as to which the hazard insurance required under the related Mortgage Loan is being maintained, they shall be borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder Property, as applicable, a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyproperty specific policy (taking into account any deductible clause that would have been permitted therein), promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds (without any right of reimbursement from the Trust, reimbursement) the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such losses up to the difference between the amount of the deductible clause to in such blanket policy and the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence amount of any deductible clause that would have been permitted under such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)property specific policy. The Master Servicer and the Special Servicer shall each agree to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cii) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if If the Master Servicer has actual knowledge shall cause any Mortgaged Property or the Special Servicer shall cause any REO Property to be covered by a master single interest insurance policy naming the Master Servicer or the Special Servicer, as applicable, on behalf of any event the Trustee as the loss payee, then to the extent such policy (an “Insured Environmental Event”i) giving rise is obtained from a Qualified Insurer that possesses the Required Claims-Paying Ratings and (ii) provides protection equivalent to a claim under an Environmental Insurance Policythe individual policies otherwise required, the Master Servicer shall notify or the Special Servicer Servicer, as applicable, shall conclusively be deemed to have satisfied its obligation to cause such effect and insurance to be maintained on such Mortgaged Property (in the case of the Master Servicer) or REO Property (in the case of the Special Servicer). If the Master Servicer shall take reasonable actions cause any Mortgaged Property as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect related Mortgagor has failed to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policymaintain the required insurance coverage, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, or the Special Servicer shall notify cause any REO Property, to be covered by such master single interest insurance policy, then the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions incremental costs of such Environmental Insurance Policy insurance applicable to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each such Mortgaged Property or REO Property that (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether covered thereby) paid by the Master Servicer or the Special Servicer, as applicable, shall constitute a Servicing Advance. The Master Servicer shall, consistent with the Servicing Standard and the terms of the related Mortgage Loan documents, pursue the related Mortgagor for the amount of such incremental costs. All other costs associated with any such master single interest insurance policy (including, without limitation, any minimum or standby premium payable for such policy) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such master single interest insurance policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as applicable, shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property, as the case may be, a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such property specific policy had it been maintained, promptly deposit into the Certificate Account from its own funds (without right of reimbursement) the amount not otherwise payable under the master single interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing AdvanceStandard.
(dc) The Each of the Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having recognized insurers that possess the Required Claims-Paying Ratings, Ratings a fidelity bond in such form and amount as are consistent with would permit it to be a qualified F▇▇▇▇▇ M▇▇ or F▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) 30 days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations In addition, each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement keep in force with recognized insurers that possess the Required Claims-Paying Ratings a policy or Special policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its obligation to service the Mortgage Loans for which it is responsible hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified F▇▇▇▇▇ Mae or F▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Any such errors and omissions policy, if required, shall provide that it may not be canceled without 30 days' prior written notice to the Trustee. It is understood and agreed that the Rating Agencies have affirmed in writing that the use of certain specified insurance carriers by the Master Servicer, the Special Servicer and/or Sub-Servicers will not, in and of itself, cause a downgrade, qualification or change in the rating assigned to any Class of Certificates, notwithstanding that such party’s corporainsurance carriers do not possess the Required Claims-Paying Ratings as of the Closing Date. It is further understood and agreed that if the claims-paying ratings of any such insurance carrier are downgraded below the level assigned as of the Closing Date, such insurance carrier promptly shall be replaced by a Qualified Insurer that possesses the Required Claims-Paying Ratings.
(d) All insurance coverage required to be maintained under this Section 3.07 shall be obtained from Qualified Insurers.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Banc of America Commercial Mortgage Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Property Manager (other than with respect to Specially Managed Units) and the case of each Mortgage Loan, the Master Special Servicer (with respect to Specially Managed Units) shall use reasonable efforts consistent in accordance with the Servicing Standard to cause the related Tenant or Mortgage Loan Borrower to maintain (including identifying the extent to which a Borrower is maintaining for each Property all insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Lease or Mortgage Loan Documents and is available at commercially reasonable rates;
Loan, as applicable (B) including for the avoidance of doubt, any Environmental Policy); provided, that if and to the extent that any such Lease or Mortgage Loan grants permits the lender lessor thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Tenant or Mortgage Loan Borrower is required to maintain, the Property Manager or the Special Servicer, as the case may be, shall exercise such discretion in a manner to cause such Tenant or Mortgage Loan Borrower to meet the Insurance Requirements; and provided, further, that, if and to the extent that a Lease or Mortgage Loan so permits, the related Tenant or Mortgage Loan Borrower shall be required to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite required insurance coverage from Qualified Insurers thatthat have a claims-paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide. If such Tenant or Mortgage Loan Borrower does not maintain the required insurance or, with respect to any Environmental Policy in each caseplace as of the Closing Date or Transfer Date, have the Required Claims-Paying Ratings at the time Property Manager will itself cause such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or with Qualified Insurers; provided, that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer Manager shall not be required to maintain such insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer Administrative Agent has determined (in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Periodjudgment) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (ai) such insurance is not available at a commercially reasonable rates rate and that such the subject hazards are not at the time not commonly insured against for by prudent owners of properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, located or (bii) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”)rate. The Subordinate Class Representative and/or Trust AdvisorSpecial Servicer shall also use reasonable efforts to cause to be maintained for each REO Property no less property insurance coverage than was previously required of the Tenant or Mortgage Loan Borrower under the related Mortgage or Lease and at a minimum, as applicable(i) hazard insurance with a replacement cost rider and (ii) comprehensive general liability insurance, will have no more than thirty (30) days to respond to in each case, in an amount customary for the Special Servicer’s request for type and geographic location of such consent or consultation; provided, however, that upon the Special Servicer’s determination, REO Property and consistent with the Servicing Standard, insurance meeting the Insurance Requirements; provided, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisorall such insurance shall be obtained from Qualified Insurers that, the Special Servicer will not be required to do soif they are providing casualty insurance, shall have a claims-paying ability rated at least “A-:VIII” by A.M. Best’s Key Rating Guide. If The cost of any such approval of insurance coverage obtained by either the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative Property Manager or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with be a Property Protection Advance to be paid by the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing StandardManager. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf Property Manager, as agent of and for the account of the Trusteeapplicable Borrower and the Administrative Agent, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer Property Manager or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerTenant, in each case in accordance with the Servicing Standardrelated Lease) shall be deposited in the Collection Account in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing AdvanceAccount.
(b) The Property Manager or Special Servicer may satisfy its obligations under Section 3.06(a) by obtaining, maintaining or causing to be maintained a blanket or forced place insurance policy. If (i) applicable, the Master Servicer Property Manager or the Special Servicer shall obtain and maintain, or cause to be obtained and maintainedmaintained on behalf of each applicable Borrower, a master forced place insurance policy or a blanket policy (or master force-placed policy an endorsement to an existing policy) insuring against hazard losses (not otherwise insured by a Tenant or Mortgage Loan Borrower due to a default by such Tenant or Mortgage Loan Borrower under the insurance covenants of its Lease or Mortgage Loan or because a Tenant or Mortgage Loan Borrower permitted to self-insure fails to pay for casualty losses) on all of the Mortgage Loans or REO Propertiesapplicable Properties that it is required to service and administer, as applicable, then, to the extent such which policy shall (Ai) is be obtained from a Qualified Insurer having the Required Claimsa claims-Paying Ratingspaying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, and (Bii) provides provide protection equivalent to the individual policies otherwise required herein under Section 3.06(a). The Property Manager and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer shall bear the cost of any premium payable in respect of any such blanket policy (other than blanket policies specifically obtained for Properties or its corporate parentREO Properties) has long-term unsecured debt obligations without right of reimbursement; provided, that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and if the Master Servicer Property Manager or the Special Servicer, as the case may be, self-insures for its obligation causes any Property or REO Property to maintain the individual policies otherwise requiredbe covered by such blanket policy, the Master Servicer incremental costs of such insurance applicable to such Property or REO Property shall constitute, and be reimbursable as, a Property Protection Advance to the extent that, except with respect to an REO Property, such blanket policy provides insurance that the related Tenant or Mortgage Loan Borrower, as applicable, has failed to maintain. If the Property Manager or Special Servicer, as the case may beapplicable, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance causes any Property or REO Property to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such covered by a blanket or master force-placed insurance policy, the incremental costs of such insurance applicable to such Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Property or REO Property is covered thereby) shall be paid as a Property Protection Advance. Such policy may contain a deductible clause (not in excess of a customary amount), ) in which case the Master Servicer Property Manager or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any Mortgaged the related Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), 3.06(a) and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and Property Manager or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee Administrative Agent and Certificateholdersthe applicable Borrower, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy. Any payments on such policy shall be made to the Property Manager as agent of and for the account of the applicable Borrower, the Lenders and the Administrative Agent.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer Manager and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or REO Properties Managed Units exist as part of the Trust FundCollateral) keep in force with a Qualified Insurer having the Required Claims-Paying Ratingsa claims paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a fidelity bond in such form and amount as are consistent with would not adversely affect any rating assigned by any Rating Agency, if applicable (as evidenced in writing from each Rating Agency). Each of the Servicing Standard. The Master Servicer or Property Manager and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer Property Manager or the Special Servicer, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to each Borrower. Each of the TrusteeProperty Manager and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Managed Units exist as part of the Collateral) also keep in force with a Qualified Insurer having a claims-paying ability rated at least “A: VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall name the Administrative Agent as an additional insured and shall be in such form and amount as would not adversely affect any rating assigned by any Rating Agency, if applicable (as evidenced in writing from each Rating Agency). So long Each of the Property Manager and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Property Manager or the Special Servicer, as the longcase may be. Any such errors and omissions policy shall provide that it may not be canceled without ten (10) days’ prior written notice to each Borrower. The Back-term unsecured debt obligations of the Master Servicer Up Manager (whether as Back-Up Manager, Property Manager or Special Servicer) shall at all times during the term of this Agreement maintain insurance in conformity with market requirements and shall keep in force with a Qualified Insurer having a claims paying ability rated by at least one of the following Rating Agencies of at least (a) “A3” by Moody’s, (b) “A-” by S&P, (c) “A-” by Fitch or (d) “A:X” by A.M. Best Company, Inc., (i) a fidelity bond (employee dishonesty insurance) in such partyform and amount as is consistent with the Servicing Standard, and (ii) a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as is consistent with the Servicing Standard. The Back-Up Manager shall cause any awards or other amounts payable under such policy or policies that result from the errors or omissions of its officers and employees in connection with its servicing obligations hereunder to be promptly remitted to the Administrative Agent for application in accordance with the Credit Agreement. The Back-Up Manager shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond and/or errors and omissions coverage and, by the terms of such fidelity bond and/or errors and omissions policy, the coverage afforded thereunder extends to the Property Manager or the Special Servicer, as the case may be. Each of the Property Manager and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Managed Units exist as part of the Collateral) also, on behalf of each Borrower, keep in force with a Qualified Insurer having a claims-paying ability rated at least “A:VIII” by A.M. Best’s corporaKey Rating Guide and at least “A” by S&P, a lessor’s general liability insurance policy or policies, which policy or policies shall be in such form and amount as would not adversely affect any rating assigned by any Rating Agency, if applicable, without giving effect to any Insurance Policy (as evidenced in writing from each Rating Agency). Any such general liability insurance policy shall provide that it may not be canceled without ten (10) days’ prior written notice to each Borrower and the Administrative Agent. Any payments on such policy shall be made to the Property Manager as agent of and for the account of any applicable Borrower and the Administrative Agent. If the Property Manager (or its corporate parent), the Special Servicer (or its corporate parent) or the Back-Up Manager (or its corporate parent), as applicable, are rated not lower than “A” by S&P, the Property Manager, the Special Servicer or the Back-Up Manager, as applicable, may self-insure with respect to any insurance coverage or fidelity bond coverage required hereunder, in which case it shall not be required to maintain an insurance policy with respect to such coverage; provided, that the Company may not self-insure with respect to any such insurance coverage or fidelity bond.
Appears in 1 contract
Sources: Property Management and Servicing Agreement (STORE CAPITAL Corp)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In Each of the Master Servicer (in the case of Mortgage Loans other than Specially Serviced Mortgage Loans) and the Special Servicer (in the case of Specially Serviced Mortgage Loans) shall use reasonable efforts to cause each Mortgagor to maintain in respect of the related Mortgaged Property all insurance coverage as is required under the related Mortgage; provided that if any Mortgage Loanpermits the holder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall use reasonable efforts impose such insurance requirements as are consistent with the Servicing Standard Standard. If a Mortgagor fails to maintain such insurance, the Master Servicer (at the direction of the Special Servicer in the case of a Specially Serviced Loan) shall (to the extent available at commercially reasonable terms) obtain such insurance (which may be through a master or single interest policy) and the cost (including any deductible relating to such insurance) of such insurance (or in the case of a master or single interest policy, the incremental cost (including any deductible relating to such insurance) of such insurance relating to the specific Mortgaged Property), shall be a Servicing Advance and shall be recoverable by the Master Servicer pursuant to Section 3.05(a). If at any time a Mortgaged Property is located in an area identified in the Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Federal Emergency Management Agency as having special flood hazards or it becomes located in such area by virtue of remapping conducted by such agency (and flood insurance has been made available), the Master Servicer (or in the case of a Specially Serviced Loan, the Special Servicer) shall, if and to the extent that the Mortgage Loan requires the Mortgagor or permits the mortgagee to require the Mortgagor to do so, use reasonable efforts to cause the related Borrower Mortgagor to maintain (including identifying a flood insurance policy meeting the extent to which a Borrower is maintaining requirements of the current guideline of the Federal Insurance Administration in the maximum amount of insurance coverage andavailable under the National Flood Insurance Act or 1968, if the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as amended, unless otherwise specified by the related Mortgage Loan. If
(i) the Mortgagor is required by the terms of the Mortgage Loan to maintain such Borrower does not so maintaininsurance (or becomes obligated by virtue of the related Mortgaged Property becoming located in such area by virtue of such remapping) or (ii) the terms of the Mortgage Loan permit the mortgagee to require the Mortgagor to obtain such insurance, the Master Servicer will itself cause (or in the case of a Specially Serviced Loan, the Special Servicer), shall promptly notify the Mortgagor of its obligation to be maintained with Qualified Insurers having obtain such insurance. If the Required Claims-Paying RatingsMortgagor fails to obtain such flood insurance within 120 days of such notification, the Master Servicer (or in the case of a Specially Serviced Loan, the Special Servicer) for shall obtain such insurance, the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan which shall be a Servicing Advance and (ii) shall be recoverable by the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient Master Servicer or Special Servicer pursuant to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsSection 3.05(a); provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer or Special Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If incur any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, cost if such approval shall be deemed to have been granted. If the Special Servicer is in the process of making Advance would constitute a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyNonrecoverable Servicing Advance. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall also use reasonable efforts, consistent with the Servicing Standard, efforts to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide cause to be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and terms) no less insurance coverage than was previously required of the Mortgagor under the related Mortgage or as is consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer (in the case of Mortgaged Properties) or the Special Servicer (in the case of REO Properties) on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with applicable law, the terms of the related Mortgage Loan documents and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid the outstanding principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence but shall not limit the rights of be recoverable by the Master Servicer or Special Servicer on behalf of the Trust as a Servicing Advance pursuant to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to Section 3.05(a).
(i) If the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) obtains and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintains a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or Mortgaged Properties and/or REO Properties, as applicableProperties for which it is responsible to cause the maintenance of insurance hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related such Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any a Mortgaged Property securing a Mortgage Loan or any an REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by (or into the Master Servicer, Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (Loan, or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket policy maintained by it in a timely fashion in accordance with the terms of such policy.
(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-force placed insurance policy, which provides protection equivalent to the individual policies otherwise required, the Master Servicer or Special Servicer shall conclusively be deemed to have satisfied its respective obligations to cause hazard insurance to be maintained on such Mortgaged Properties and/or REO Properties. Such policy may contain a deductible clause, in which case the Master Servicer or the 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 3.07(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 Certificate Account (or into the Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) 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. 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 master force placed insurance policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard term of this Agreement a blanket fidelity bond and the terms an errors and conditions omissions insurance policy covering its officers and employees and other persons acting on behalf of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard it in connection with any claim its activities under this Agreement and naming the Trustee as an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) additional insured. The amount of coverage shall be (subject at least equal to Section 3.11(h) and Section 3.19(b)) paid bythe coverage that would be required by FNMA or FHLMC, and reimbursable towhichever is greater, with respect to the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be, were servicing and administering the Mortgage Loans and/or REO Properties for which it is responsible hereunder for FNMA or FHLMC. Such fidelity Coverage of the Master Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of such Person and providing the coverage required by this Section 3.07(c) shall provide that it may not satisfy the requirements of this Section 3.07(c).
(d) All insurance coverage required to be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of maintained by the Master Servicer or Special Servicer, as applicable, under this Section 3.07 shall be obtained from Qualified Insurers having a claims paying ability rating (or the obligations of which are guaranteed or backed by a company having such party’s corporaclaims paying ability rating or insurance financial strength rating, as applicable) not less than (w) two increments (but not less than BBB) below the rating of the highest rated Certificate from Standard & Poor's (x) A2 by Moody's and (y) if rated by FITCH IBCA, "A" by FITCH IBCA (or, if not rated by FITCH IBCA, rated A-IX or better by A.M. Best); provided, however, that the requirements of clauses (w), (x) and (y) shall not be applicable with respect to Moody's, Standard & Poor's or FITCH IBCA, as applicable, if the related Rating Agency shall have confirmed in writing that an insurance company with a lower claims paying ability rating shall not result, in and of itself, in a downgrade, qualification on withdrawal of the then current ratings by such Rating Agency of any class of Certificates.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Gmac Commercial Mortgage Securities Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Performing Serviced Mortgage Loan, the applicable Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the such Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and or (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the applicable Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Performing Serviced Mortgage Loan unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates (and if the applicable Master Servicer does not cause the Borrower to maintain or does not itself maintain such earthquake or environmental insurance policy on any Mortgaged Property, the Special Servicer shall have the right, but not the duty, to obtain, at the Trust's expense, earthquake or environmental insurance on any Mortgaged Property securing a Specially Serviced Mortgage Loan or on an Administered REO Property so long as such insurance is available at commercially reasonable rates);
(B) if and to the extent that any Performing Serviced Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the applicable Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause require the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the applicable Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Performing Serviced Mortgage Loan to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the applicable Master Servicer be required to cause the Borrower under any Performing Serviced Mortgage Loan to maintain, or itself obtain, insurance coverage that the applicable Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property mortgaged property and located in or around the region in which the related Mortgaged Property is locatedlocated (in each case, as determined by the applicable Master Servicer, which shall be entitled to rely, at its own expense, on insurance consultants in making such determination) (and provided that any such determinations by the applicable Master Servicer must be made not less frequently (but need not be made more frequently) than annually but in any event shall be made at the approximate date on which the applicable Master Servicer receives notice of the renewal, replacement or cancellation of coverage);
(E) the reasonable efforts of the applicable Master Servicer to cause the Borrower under any Performing Serviced Mortgage Loan to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the applicable Master Servicer on a force-placed basis; and
(F) to the extent the applicable Master Servicer itself is required to maintain insurance that the Borrower under any Performing Serviced Mortgage Loan does not maintain, the applicable Master Servicer shall not be required to maintain insurance other than what is available to the such Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails applicable Master Servicer shall, prior to maintain availing itself of any limitation described in that clause with respect to any Performing Serviced Mortgage Loan that has a Stated Principal Balance in excess of $2,500,000, obtain the related Mortgaged Property approval or disapproval of the Special Servicer (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically excludeand, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar actsin connection therewith, the Special Servicer shall be required to comply with any applicable provisions of Section 3.24 and/or 3.27, if and as applicable). The applicable Master Servicer shall cause be entitled to rely on the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as determination of the Closing Date, unless the Special Servicer has determined made in its reasonable judgment based on inquiry consistent connection with such approval or disapproval. The Special Servicer shall decide whether to withhold or grant such approval in accordance with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety seven Business Days (90or in the case of the Serviced Mortgage Loan Groups, such longer period of time, if any, that is provided in or pursuant to Section 3.24 and/or 3.27, if and as applicable) days of the Special Servicer’s 's receipt from the applicable Master Servicer of the such Master Servicer’s 's determination and analysis and all information reasonably requested thereby and reasonably available to the applicable Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The applicable Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Controlling Class Representative and (if a Serviced Mortgage Loan Group is involved) the Majority Subordinate Certificateholder related Serviced Non-Pooled Mortgage Loan Noteholder, if the applicable Master Servicer determines that the Borrower under any Borrower Performing Serviced Mortgage Loan has failed to maintain insurance required under (or that the such Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if the Borrower under any Borrower Performing Serviced Mortgage Loan has notified the applicable Master Servicer in writing that such the Borrower does not intend to maintain such insurance and the applicable Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2005-Pwr9)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower each Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage maintain, and, if such Borrower the Mortgagor does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) maintained, for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due including each Mortgaged Property relating to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such any Specially Serviced Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably requirerequired, subject to applicable law, under the related Mortgage Loan Documentsloan documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any Mortgage Loan grants such loan documents permit the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Mortgagor is required to obtain the requisite insurance coveragemaintain, the Master Servicer shall (exercise such discretion in a manner consistent with the Servicing Standard and, prior to the date such existing insurance expires or is required to be renewed, the Master Servicer may, to the extent consistent with the Servicing Standard, take into account insurance in place at loan origination, with a view towards requiring insurance comparable to that required under other Mortgage Loans with express provisions governing such matters and including business interruption or rental loss insurance for at least 12 months; provided, further, that the Master Servicer shall be required to maintain such insurance coverage upon the related Mortgagor's failure to do so only to the extent that such insurance is available at commercially reasonable rates and the Trustee, on behalf of the Trust, as mortgagee has an insurable interest. Subject to Section 3.17(b), the Special Servicer shall also cause to be maintained for each REO Property no less insurance coverage (to the extent available at commercially reasonable rates) use efforts (A) than was previously required of the related Mortgagor under the related loan documents and (B), at a minimum, (i) hazard insurance with a replacement cost rider, (ii) business interruption or rental loss insurance for at least 12 months, and (iii) commercial general liability insurance, in each case, in an amount customary for the type and geographic location of such REO Property and consistent with the Servicing Standard Standard; provided that all such insurance required to cause the related Borrower to obtain the requisite insurance coverage be maintained by Master Servicer or Special Servicer shall be obtained from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have a financial strength or claims-paying rating no obligation beyond using its reasonable efforts consistent with lower than two rating categories below the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standardhighest rated Certificates outstanding, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain no lower than "A2" from Moody's and "A" from S&P (or obtain in such other form and amount or issu▇▇ ▇▇ ▇n insurer with such other financial strength or claims-paying ability as would not, as confirmed in writing by the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardrelevant Rating Agency, result in an Adverse Rating Event. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a the Mortgage LoanLoans), or shall name the Trustee Trustee) as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of REO Properties), and shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in into the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), or Section 3.05(f), as applicable, in the case of amounts received in respect of a Mortgage Loan, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an a REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower Mortgagor under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, by and reimbursable to, to the Master Servicer or the Special Servicer, as the case may be, as a Servicing Advance. Notwithstanding the foregoing, if as of the Closing Date the loan documents specifically and expressly set forth terms requiring insurance coverage against terrorist or similar acts for a Mortgage Loan with a Stated Principal Balance greater than $[_________], then the Master Servicer and the Special Servicer shall enforce the terms of the related loan documents in accordance with the Servicing Standard, and if the Mortgagor fails to maintain such insurance, such failure shall constitute a Servicing Transfer Event. To the extent the loan documents do not set forth specific terms requiring insurance coverage against terrorist or similar acts and a Mortgage Loan (x) requires a Mortgagor to maintain insurance policies covering some or all of the risks contained in the Additional Exclusions or (y) in accordance with the Servicing Standard, the Master Servicer (in consultation with the Special Servicer (in consultation with the Directing Certificateholder)) has determined that the loan documents permit the lender to require the Mortgagor to maintain insurance policies covering some or all the risks contained in the Additional Exclusions (the covered risks required to be covered or that the lender has the discretion to require to be covered being referred to as "Covered Risks"), the Master Servicer shall use reasonable efforts in accordance with the Servicing Standard to determine whether, upon renewal of the Mortgagor's property or casualty insurance (including any all risk insurance policy), any of the Covered Risks are excluded from coverage. If any of the Covered Risks are determined by the Master Servicer to be excluded from coverage, the Master Servicer shall request the Mortgagor to either (i) purchase insurance acceptable to the Master Servicer in accordance with the Servicing Standard and in accordance with the related loan documents covering such Covered Risks or (ii) provide a written explanation as to its reasons for failing to purchase such insurance. Notwithstanding the foregoing, with the written consent of the Special Servicer in accordance with the Servicing Standard the Master Servicer may waive the requirement to procure insurance covering any of the Covered Risks if the Master Servicer determines in accordance with the Servicing Standard that (1) insurance covering any such Covered Risks is not available at a commercially reasonable price, or (2) based on information reasonably available to the Master Servicer, after due inquiry, any such Covered Risks are at that time not commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which the Mortgaged Property is located unless the Stated Principal Balance of the Mortgage Loan is greater than $[_________]. If the Stated Principal Balance of the Mortgage Loan is greater than $[_________], then the Master Servicer must determine that the circumstances in both clauses (1) and (2) of the immediately preceding sentence apply prior to waiving the Mortgagor's requirement to procure insurance with respect to any Covered Risks. If the Special Servicer fails to give a response to the Master Servicer as referenced in the second preceding sentence within [___] Business Days of the Master Servicer initially notifying the Special Servicer in writing of such request, the Master Servicer shall promptly notify the Directing Certificateholder of such failure of the Special Servicer to respond to such request. If the Directing Certificateholder and/or the Special Servicer have not responded to the Master Servicer within [___] Business Days of the notice referenced in the immediately preceding sentence, the Master Servicer shall determine in accordance with the Servicing Standard whether to require (or not require) the Mortgagor to maintain such insurance; provided that during the period that the Special Servicer and/or the Directing Certificateholder are evaluating such insurance, none of the Master Servicer, the Special Servicer and/or the Directing Certificateholder shall be liable for any loss related to its failure to require a Mortgagor to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure. If the Master Servicer requires the Mortgagor to maintain such insurance and the Mortgagor fails to maintain such insurance, to the extent such insurance is then reasonably available, the Master Servicer shall then procure such insurance in accordance with the Servicing Standard and such failure by the Mortgagor shall constitute a Servicing Transfer Event. For purposes of computing whether the $[_________] threshold described herein is met for a particular Mortgage Loan, if a Mortgage Loan is secured by multiple Mortgaged Properties, then the amount subject to the $[_________] threshold shall be the portion of the Stated Principal Balance of the related Mortgage Loan pro rated based on an individual Mortgaged Property's appraised value as a percentage of the total appraised value of all of the related Mortgaged Properties.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-force placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, that it is required to service and administer hereunder, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having a financial strength or claims-paying rating no lower than "A3" from Moody's and "A" from S&P or having such other financial strength o▇ ▇▇▇▇▇s-paying ability rating as would not, as confirmed in writing by the Required Claims-Paying Ratingsrelevant Rating Agency, result in an Adverse Rating Event and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-force placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which that is consistent with the Servicing Standard). The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-forced placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or or REO Properties for which it is responsible exist as part of the Trust Fund) keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the Required Claimshighest rated Certificates outstanding, and in any event no lower than "A2" from Moody's (or, if not rated by Moody's, "A-Paying RatingsIX" by A.M. Best) and "A" ▇▇▇▇ ▇&P, a fidelity bond in such ▇▇▇▇ ▇orm and amount as would permit it to be a qualified Fannie Mae seller-servicer of multifamily mortgage loans (or in su▇▇ ▇▇▇er form and amount or issued by an insurer with such other financial strength or claims-paying ability rating as are consistent would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Servicing StandardTrustee by the relevant Rating Agency)). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten [ten] days' prior written notice to the Trustee. Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (10or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties for which it is responsible exist as part of the Trust Fund) also keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than "A2" from Moody's (or, if not rated by Moody's, "A-IX" by A.M. Best) and "A" ▇▇▇▇ ▇&P, a policy or polici▇▇ ▇▇ ▇nsurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified Fannie Mae seller-servicer of multifamily mortgage loans (or in su▇▇ ▇▇▇e▇ ▇orm and amount or issued by an insurer with such other financial strength or claims-paying rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Trustee by the relevant Rating Agency)). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without [ten] days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or the Special Servicer (or its direct or indirect parent company), as applicable, are rated not lower than "A2" from Moody's and "A" from S&P, the Master Servicer or Special Servicer, ▇▇ ▇▇▇licable, may self-insure with respect to either or both of the fidelity bond coverage and the errors and omissions coverage required as described above, in which case it shall not be required to maintain an insurance policy with respect to such party’s corporacoverage.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Banc of America Commercial Mortgage Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts (with respect to Mortgage Loans and Companion Loans to the extent that the Trust Fund has an insurable interest, but other than with respect to the 2006-C23 Serviced Mortgage Loan and its related Companion Loan) and the Special Servicer (with respect to REO Properties to the extent that the Trust Fund has an insurable interest) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, howeverfurther, if and to the extent that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisora Mortgage so permits, the Special Servicer will not related Mortgagor shall be required to do so. If any such approval of exercise its reasonable best efforts to obtain the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt required insurance coverage from the Master Servicer of the Master Servicer’s determination Qualified Insurers and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation required insurance coverage obtained by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable from Qualified Insurers. For the avoidance of doubt, REO Property with respect to the 2006-C23 Serviced Mortgage Loan is excluded for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insuranceall purposes from this Section 3.07. The cost of any such insurance coverage obtained by either the Master Servicer shall notify or the Special ServicerServicer shall be a Servicing Advance to be paid by the Master Servicer pursuant to Section 3.03. Whether or not the applicable Mortgage Loan documents require such insurance, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if may request that earthquake insurance be secured for one or more Mortgaged Properties at the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest expense of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyMajority Subordinate Certificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, also cause to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan DocumentsMortgage; provided, however, provided that the Special Servicer all such insurance shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardobtained from Qualified Insurers. All such insurance policies maintained as described above by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “"standard” " mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, or Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without thirty (30) days' prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan document; and (vii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan or Companion Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loans so permit; provided, however, that this sentence shall not limit . Notwithstanding the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toforegoing, the Master Servicer or Special Servicer, as applicable, will not be required to maintain (and in the case may beof the Special Servicer, with respect to any Specially Serviced Mortgage Loan), and shall not cause a Mortgagor to be in default with respect to the failure of the related Mortgagor to obtain, all-risk casualty insurance which does not contain any carve-out for terrorist or similar acts, if and only if the Master Servicer with respect to non-Specially Serviced Mortgage Loans or the Special Servicer with respect to Specially Serviced Mortgage Loans, in consultation with the Controlling Class Representative, and, with respect to each Co-Lender Loan (other than the 2006-C23 Serviced Mortgage Loan), in consultation with the related Companion Holder if required under the applicable Intercreditor Agreement, has determined in accordance with the Servicing Standard that either (a) such insurance is not available at any rate or (b) such insurance is not available at commercially reasonably rates and that such hazards are not at the time commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which such Mortgaged Property is located and the Controlling Class Representative has approved the decision not to require the borrower to maintain terrorism insurance (provided that the decision of the Controlling Class Representative to grant or withhold such consent shall be disregarded by the Special Servicer if such consent or lack of consent would cause the Master Servicer or the Special Servicer, as applicable, to violate the Servicing Standard); provided, however, the Controlling Class Representative's approval shall be deemed to have been given if it has not responded within five (5) Business Days of receipt of the Master Servicer's or the Special Servicer's written recommendation and the information upon which such recommendation is based; provided, further, that upon the Master Servicer's or the Special Servicer's determination, as applicable, consistent with the Servicing Standard, that exigent circumstances do not allow the Master Servicer or the Special Servicer to consult with the Controlling Class Representative or Companion Holder, if applicable, the Master Servicer or the Special Servicer, as applicable, shall not be required to do so; provided, further, during the period that the Special Servicer is evaluating such insurance hereunder, the Master Servicer shall not be liable for any loss related to its failure to require the Mortgagor to maintain terrorism insurance and shall not be in default of its obligations hereunder as a Servicing Advanceresult of such failure. The Special Servicer shall promptly notify the Master Servicer of each determination under this paragraph.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans, Companion Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without for ten (10) days’ prior ' written notice to the TrusteeTrustee prior to any cancellation. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification, downgrade or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten days' written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct or indirect parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Wachovia Bank Commercial Mortgage Trust Series 2006-C25)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Master Servicer, with respect to each of the case of each Serviced Mortgage LoanLoans including Specially Serviced Mortgage Loans, and the Master Servicer Special Servicer, with respect to Administered REO Properties, shall use reasonable efforts efforts, consistent with the Servicing Standard Standard, to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to by the terms of the related Mortgage Loan Documents and documents, or if the Mortgagor does not maintain, shall itself maintain for each Mortgaged Property all insurance coverage as is available at commercially reasonable rates;
(B) required under the related Mortgage; provided that if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not exercise such discretion in a manner consistent with the Servicing Standard and subject to the terms of this Section 3.07; and provided, further that, if and to the extent that a Mortgage so permits, the related Mortgagor shall be required to maintain insurance other than what is available exercise its reasonable efforts to obtain the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty required insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific from Qualified Insurers and required insurance coverage with respect to damages or casualties caused obtained by terrorist or similar acts, the Master Servicer shall be from Qualified Insurers. The cost of any such insurance coverage obtained by either the Master Servicer or the Special Servicer shall be a Servicing Advance to be paid by the Master Servicer pursuant to Section 3.03. If not required under the terms of the Mortgage or the Mortgage Loan documents, the Special Servicer may require that earthquake insurance be secured for one or more Serviced Mortgaged Properties at the expense of the Trust Fund (including the Special Servicer's costs and expenses incurred in obtaining such insurance). Subject to Section 3.17(a), the Special Servicer shall also cause to be maintained for each Administered REO Property no less insurance coverage than was required of the Mortgagor under the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place Mortgage as of the Closing Date; provided that all such insurance shall be obtained from Qualified Insurers. All such insurance policies maintained by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to property and do not relate to an REO Property) a "standard" mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee (and, in the case of a Loan Combination, the related Non-Trust Noteholder(s)) (in the case of insurance maintained in respect of Mortgage Loans); (ii) shall be in the name of the Special Servicer (in the case of insurance maintained in respect of Administered REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Serviced Mortgaged Property or Administered REO Property, as applicable, or (y) the outstanding principal balance owing on the related Serviced Mortgage Loan or Serviced REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan documents; (vii) to the extent that the Mortgage or other Mortgage Loan documents specifically require terrorism coverage or the Mortgage requires the related Mortgagor to carry "all risk" coverage, shall include terrorism coverage, unless the failure to obtain such terrorism coverage constitutes an Acceptable Insurance Default; and (viii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Notwithstanding the foregoing, the Master Servicer or the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standardshall not be required to obtain, and (during shall not be in default hereunder for failing to obtain, any Subordinate Control Period) with the consent insurance coverage that was previously required of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with Mortgagor under the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either related Mortgage if (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or any rate; (b) such insurance is not available at any rate from a Qualified Insurer (failure to maintain required insurance due to either of clause (a) provided that the Master Servicer or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisorthe Special Servicer, as applicable, will have no more than thirty (30) days to respond to shall obtain such insurance from the Special Servicer’s request for next highest rated insurer offering such consent or consultationinsurance at commercially reasonable rates; provided, howeverfurther, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available in making determinations as to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process availability of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative insurance at commercially reasonable rates or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable)otherwise, the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss be entitled to rely, at its own expense, on insurance covering revenues or rents for a period of at least twelve consultants in making such determination); (12c) months, in each case if so required pursuant subject to the related Mortgage Loan Documents; provided, however, that prior approval of the Controlling Class Representative (which approval is deemed granted if not denied within 10 Business Days after its receipt of the Master Servicer's or the Special Servicer shall Servicer's request for such approval), such insurance is not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and and, as determined by the Master Servicer or the Special Servicer following due inquiry conducted in a manner consistent with the Servicing Standard. All , the subject hazards are not commonly insured against by prudent owners of similar real properties in similar locales (but only by reference to such insurance policies maintained as described above shall contain that has been obtained by such owners at the then current market rates); or (if they insure against loss to propertyd) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee does not have an insurable interest in the case of insurance maintained in respect of a Mortgage Loan, related Mortgaged Property or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an Administered REO Property. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Serviced Mortgaged Property or Administered REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Serviced Mortgage LoanLoan (other than a Loan Combination), or in the related Loan Combination Custodial Account, subject to withdrawal pursuant to Section 3.05(e), in the case of amounts received in respect of a Loan Combination, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage Loan, notwithstanding that the terms of such Serviced Mortgage Loan so permit; provided. Notwithstanding the foregoing, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs with respect to the Master Servicer Serviced Mortgage Loans which either (x) require the Mortgagor to maintain "all risk" property insurance (and do not expressly permit an exclusion for terrorism) or (y) contain provisions generally requiring the Special Servicer applicable Mortgagor to maintain insurance in types and against such risks as the holder of maintaining insurance policies pursuant such Serviced Mortgage Loan reasonably requires from time to this Section 3.07 shall (subject time in order to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toprotect its interests, the Master Servicer will be required to (A) use efforts consistent with the Servicing Standard, to monitor whether the insurance policies for the related Mortgaged Property contain Additional Exclusions, (B) request the Mortgagor to either purchase insurance against the risks specified in the Additional Exclusions or provide an explanation as to its reasons for failing to purchase such insurance and (C) notify the Special ServicerServicer if any insurance policy contains Additional Exclusions or if any Mortgagor fails to purchase the insurance requested to be purchased by the Master Servicer pursuant to clause (B) above. If the Special Servicer determines in accordance with the Servicing Standard that such failure is not an Acceptable Insurance Default, the Special Servicer shall notify the Master Servicer and the Master Servicer shall cause such insurance to be maintained. Furthermore, the Special Servicer shall inform the Rating Agencies as to such conclusions for those Serviced Mortgage Loans that (i) have one of the case may be10 highest outstanding Stated Principal Balances of all of the Mortgage Loans then included in the Trust Fund or (ii) comprise more than 5% of the outstanding Stated Principal Balance of the Mortgage Loans then included in the Trust Fund (and, if a Loan Combination satisfies clause (i) and/or clause (ii), the Special Servicer shall also inform the related Non-Trust Noteholder(s) as to such conclusion). During the period that the Special Servicer is evaluating the availability of such insurance, the Master Servicer will not be liable for any loss related to its failure to require the Mortgagor to maintain such insurance and will not be in default of its obligations as a Servicing Advanceresult of such failure and the Master Servicer will not itself maintain such insurance or cause such insurance to be maintained.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Serviced Mortgage Loans or and/or Serviced REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Serviced Mortgaged Properties or and/or Administered REO Properties. In the event that the Special Servicer causes any Administered REO Property to be covered by such blanket policy, the incremental cost of such insurance applicable to such Administered REO Property (other than any minimum or standby premium payable for such policy whether or not any Administered REO Property is covered thereby) shall be paid by the Master Servicer as applicablea Servicing Advance pursuant to Section 3.03. Such a blanket policy or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Serviced Mortgaged Property securing a Mortgage Loan or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by (or, in the Master Servicercase of a Loan Combination Mortgaged Property or any Loan Combination REO Property, into the related Loan Combination Custodial Account) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket policy or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any the amount of such deductible exceeds the deductible limitation that pertained to permitted under the related Mortgage Loan documents (oror if the related Mortgage Loan documents are silent regarding a permitted deductible, in the absence of any such a deductible limitation, the deductible limitation for an individual policy which that is consistent with the Servicing Standard). The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholdersthe Certificateholders (and, in the case of a Loan Combination, the related Non-Trust Noteholder(s)), claims under any such blanket policy or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or Administered REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause an Adverse Rating Event (as evidenced in writing from each Rating Agency). Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or Administered REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not result in an Adverse Rating Event (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without ten (10) for 10 days’ prior ' written notice to the TrusteeTrustee prior to cancellation. So The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in an Adverse Rating Event, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this Section 3.07.
(d) Within 90 days of the Closing Date, with respect to each of the Serviced Mortgage Loans identified on Exhibit J as being covered by an environmental insurance policy, the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) shall notify the insurer under such environmental insurance policy and take all other action necessary for the Certificate Administrator, on behalf of the Certificateholders (and in the case of a Loan Combination, the related Non-Trust Noteholder(s)), to be an insured (and for the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan), on behalf of the Trust Fund (and in the case of a Loan Combination, the related Non-Trust Noteholder(s)), to make claims) under such environmental insurance policy. In the event that the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) has actual knowledge of any event (an "Insured Environmental Event") giving rise to a claim under any environmental insurance policy in respect of any Serviced Mortgage Loan covered thereby, the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) shall, in accordance with the terms of such environmental insurance policy and the Servicing Standard, timely make a claim thereunder with the appropriate insurer and shall take such other actions in accordance with the Servicing Standard which are necessary under such environmental insurance policy in order to realize the full va
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Merrill Lynch Mortgage Trust 2005-Lc1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Serviced Loan, the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower each Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage maintain, and, if such Borrower the Mortgagor does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) maintained, for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due including each Mortgaged Property relating to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage any Specially Serviced Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably requirerequired, subject to applicable law, under the related Mortgage Loan Documentsloan documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any Mortgage Loan grants such loan documents permit the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Mortgagor is required to obtain the requisite insurance coveragemaintain, the Master Servicer shall (exercise such discretion in a manner consistent with the Servicing Standard and, prior to the date such existing insurance expires or is required to be renewed, the Master Servicer may, to the extent consistent with the Servicing Standard, take into account insurance in place at loan origination, with a view towards requiring insurance comparable to that required under other Serviced Loans with express provisions governing such matters and including business interruption or rental loss insurance for at least 12 months; and provided, further, the Master Servicer shall be required to maintain such insurance coverage upon the related Mortgagor's failure to do so only to the extent that such insurance is available at commercially reasonable rates and the Trustee, on behalf of the Trust, as mortgagee has an insurable interest. Subject to Section 3.17(b), the Special Servicer shall also cause to be maintained for each REO Property (other than with respect to any REO Property related to a Non-Serviced Loan) use efforts no less insurance coverage (to the extent available at commercially reasonable rates) (A) than was previously required of the related Mortgagor under the related loan documents and (B), at a minimum, (i) hazard insurance with a replacement cost rider, (ii) business interruption or rental loss insurance for at least 12 months, and (iii) commercial general liability insurance, in each case, in an amount customary for the type and geographic location of such REO Property and consistent with the Servicing Standard Standard; provided that all such insurance required to cause the related Borrower to obtain the requisite insurance coverage be maintained by Master Servicer or Special Servicer shall be obtained from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have a financial strength or claims-paying rating no obligation beyond using its reasonable efforts consistent with lower than two rating categories below the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standardhighest rated Certificates outstanding, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain no lower than "A" from Fitch, "A2" from Moody's and "A" from S&P (or obtain in such other form and amount or issued by ▇▇ ▇▇▇urer with such other financial strength or claims-paying ability as would not, as confirmed in writing by the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardrelevant Rating Agency, result in an Adverse Rating Event. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a the Mortgage LoanLoans), or shall name the Trustee (and in the case of a Whole Loan the related Companion Loan Holder) as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (and in the case of a Whole Loan the related Companion Loan Holder) (in the case of insurance maintained in respect of REO Properties), and shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in into the Collection Certificate Account in accordance with Section 3.04or, if a Serviced Whole Loan is involved, the related Serviced Whole Loan Custodial Account, subject to withdrawal pursuant to Section 3.053.05(a), or Section 3.05(f), as applicable in the case of amounts received in respect of a Mortgage Loan, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an a REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Serviced Loan, notwithstanding that the terms of such Mortgage Serviced Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust or, if a Whole Loan is involved, on behalf of the related Companion Loan Holder, to enforce any obligations of the related Borrower Mortgagor under such Mortgage Serviced Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, by and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on a Servicing Advance. If the related Mortgaged Properties loan documents specifically and expressly set forth terms requiring insurance coverage against terrorist or REO Propertiessimilar acts for a Serviced Loan, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case then the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf enforce the terms of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion related loan documents in accordance with the Servicing Standard, and if the Mortgagor fails to maintain such insurance, such failure shall constitute a Servicing Transfer Event. To the extent the loan documents do not set forth specific terms requiring insurance coverage against terrorist or similar acts and a Serviced Loan (x) requires a Mortgagor to maintain insurance policies covering some or all of such policy.
the risks contained in the Additional Exclusions or (cy) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policyin accordance with the Servicing Standard, if the Master Servicer has actual knowledge of any event determined that the loan documents permit the lender to require the Mortgagor to maintain insurance policies covering some or all the risks contained in the Additional Exclusions (an “Insured Environmental Event”) giving rise the covered risks required to a claim under an Environmental Insurance Policybe covered or that the lender has the discretion to require to be covered being referred to as "Covered Risks"), the Master Servicer shall notify use reasonable efforts in accordance with the Special Servicing Standard to determine whether, upon renewal of the Mortgagor's property or casualty insurance (including any all risk insurance policy), any of the Covered Risks are excluded from coverage. If any of the Covered Risks are determined by the Master Servicer to such effect and be excluded from coverage, the Master Servicer shall take reasonable actions as are request the Mortgagor to either (i) purchase insurance acceptable to the Master Servicer in accordance with the Servicing Standard and in accordance with the terms and conditions related loan documents covering such Covered Risks or (ii) provide a written explanation as to its reasons for failing to purchase such insurance. Notwithstanding the foregoing, with the written consent of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge in accordance with the Servicing Standard the Master Servicer may waive the requirement to procure insurance covering any of the Covered Risks if the Master Servicer determines in accordance with the Servicing Standard that (1) insurance covering any event giving rise such Covered Risks is not available at a commercially reasonable price, or (2) based on information reasonably available to the Master Servicer, after due inquiry, any such Covered Risks are at that time not commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which the Mortgaged Property is located unless the Stated Principal Balance of the Serviced Loan is greater than $20,000,000. If the Stated Principal Balance of the Serviced Loan is greater than $20,000,000, then the Master Servicer must determine that the circumstances in both clauses (1) and (2) of the immediately preceding sentence apply prior to waiving the Mortgagor's requirement to procure insurance with respect to any Covered Risks. If the Special Servicer fails to give a claim under an Environmental Insurance Policyresponse to the Master Servicer as referenced in the second preceding sentence within ten Business Days of the Master Servicer initially notifying the Special Servicer in writing of such request, the Master Servicer shall promptly notify the Directing Certificateholder of such failure of the Special Servicer to respond to such request. If the Directing Certificateholder and/or the Special Servicer have not responded to the Master Servicer within ten Business Days of the notice referenced in the immediately preceding sentence, the Master Servicer shall determine in accordance with the Servicing Standard whether to require (or not require) the Mortgagor to maintain such insurance; provided, that during the period that the Special Servicer and/or the Directing Certificateholder are evaluating such insurance, none of the Master Servicer, the Special Servicer and/or the Directing Certificateholder shall notify be liable for any loss related to its failure to require a Mortgagor to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure. If the Master ServicerServicer requires the Mortgagor to maintain such insurance and the Mortgagor fails to maintain such insurance, which to the extent such insurance is then reasonably available, the Master Servicer shall take reasonable actions as are then procure such insurance in accordance with the Servicing Standard and such failure by the terms and conditions Mortgagor shall constitute a Servicing Transfer Event. For purposes of such Environmental Insurance Policy computing whether the $20,000,000 threshold described herein is met for a particular Serviced Loan, if a Serviced Loan is secured by multiple Mortgaged Properties, then the amount subject to make the $20,000,000 threshold shall be the portion of the Stated Principal Balance of the related Serviced Loan pro rated based on an individual Mortgaged Property's appraised value as a claim thereunder and achieve percentage of the payment total appraised value of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporarelated Mortgaged Properties.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Banc of America Commercial Mortgage Inc., Series 2007-3)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case Each of each Mortgage Loan, the Master Servicer shall and the Special Servicer shall, as to those Mortgage Loans it is obligated to service hereunder, use its reasonable efforts consistent in accordance with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower the related Mortgagor is required by the terms of the related Mortgage Loan and does not so maintain, the Master Servicer will (even in the case of Specially Serviced Mortgage Loans) shall itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property maintain (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal subject to the lesser provisions of (ithis Agreement regarding Nonrecoverable Advances, and further subject to Section 3.11(h) hereof)), to the full replacement cost extent the Trustee, as mortgagee on behalf of improvements securing such Mortgage Loan the Certificateholders, has an insurable interest and (ii) to the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (yextent available at commercially reasonable rates) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; (subject to applicable law), provided that all of if any Mortgage permits the following conditions and/or limitations shall apply:
(A) holder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless impose such insurance policy was in effect at requirements as are consistent with the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverageServicing Standard. Upon request, the Master Servicer shall (make available to the extent consistent Trustee copies of each insurance policy and declaration of insurance for a Mortgaged Property covered by an insurance policy. Any amounts the Master Servicer pays to maintain insurance as set forth herein shall constitute Servicing Advances. The Special Servicer shall maintain for each REO Property with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have an insurer that possesses the Required Claims-Paying Ratings at the time such policy is purchased, no less insurance coverage is obtained;
than was previously required of the related Mortgagor under the related Mortgage (Cto the extent available at commercially reasonable rates) and, if the Master Servicer shall have no obligation beyond using its reasonable efforts related Mortgage did not so require, hazard insurance, public liability insurance and business interruption or rent loss insurance in such amounts as are consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates the cost of which shall be paid as a Servicing Advance, or the Special Servicer may request the Master Servicer to make such Servicing Advance, and consistent the Master Servicer or the Special Servicer, as applicable, shall be reimbursed for the premium costs thereof and any deductible relating to such insurance as a Servicing Advance with the Servicing Standard. Advance Interest pursuant to Section 3.05
(a) All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, the Mortgaged Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer Servicer, as applicable, in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy insuring against hazard losses on any or all of the Mortgage Loans Mortgaged Properties (in the case of the Master Servicer) or REO Properties, as applicableProperties (in the case of the Special Servicer), then, to the extent such policy (A) is obtained from a Qualified Insurer having that possesses the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable, so covered, and the premium costs and any deductible thereof shall be, if and to the extent they are specifically attributable either to a specific Mortgaged Property during any period that the related Mortgagor has failed to maintain the hazard insurance required under the related Mortgage Loan in respect of such Mortgaged Property or to a specific REO Property, a Servicing Advance by the Master Servicer at the direction of the Special Servicer (in the case of a Specially Serviced Mortgage Loan) under Section 3.07(a) which is reimbursable to the Master Servicer pursuant to and to the extent permitted under Section 3.05(a); provided that, to the extent that such premium costs are attributable to properties other than Mortgaged Properties and/or REO Properties or are attributable to Mortgaged Properties as to which the hazard insurance required under the related Mortgage Loan is being maintained, they shall be borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such a blanket or master force-placed policy may contain a reasonable deductible clause (not in excess of a customary amount)clause, in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder Property, as applicable, a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyproperty specific policy (taking into account any deductible clause that would have been permitted therein), promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds (without any right of reimbursement from the Trust, reimbursement) the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such losses up to the difference between the amount of the deductible clause to in such blanket policy and the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence amount of any deductible clause that would have been permitted under such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)property specific policy. The Master Servicer and the Special Servicer shall each agree to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cii) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if If the Master Servicer has actual knowledge shall cause any Mortgaged Property or the Special Servicer shall cause any REO Property to be covered by a forced placed insurance policy naming the Master Servicer or the Special Servicer, as applicable, on behalf of any event the Trustee as the loss payee, then to the extent such policy (an “Insured Environmental Event”A) giving rise is obtained from a Qualified Insurer that possesses the Required Claims-Paying Ratings and (B) provides protection equivalent to a claim under an Environmental Insurance Policythe individual policies otherwise required, the Master Servicer shall notify or the Special Servicer Servicer, as applicable, shall conclusively be deemed to have satisfied its obligation to cause such effect and insurance to be maintained on such Mortgaged Property (in the case of the Master Servicer) or REO Property (in the case of the Special Servicer). If the Master Servicer shall take reasonable actions cause any Mortgaged Property as are in accordance to which the related Mortgagor has failed to maintain the required insurance coverage, or the Special Servicer shall cause any REO Property, to be covered by such forced placed insurance policy, then the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) paid by the Master Servicer, or the Special Servicer, shall constitute a Servicing Advance which is reimbursable to the Master Servicer or the Special Servicer pursuant to and to the extent permitted under Section 3.05(a). The Master Servicer or the Special Servicer shall, consistent with the Servicing Standard and the terms and conditions of the related Mortgage Loan documents, pursue the related Mortgagor for the amount of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunderincremental costs. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or All other out-of-pocket costs incurred in accordance with the Servicing Standard in connection associated with any claim under an Environmental Insurance Policy described above such forced placed insurance policy (whether by the Master Servicer including, without limitation, any minimum or the Special Servicerstandby premium payable for such policy) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such forced placed insurance policy may contain a reasonable deductible clause, in which case the Master Servicer or the Special Servicer, as applicable, shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property, as the case may be, a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such property specific policy had it been maintained, promptly deposit into the Certificate Account from its own funds (without right of reimbursement) the amount not otherwise payable under the forced placed 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing AdvanceStandard.
(dc) The Each of the Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having Insurers that possess the Required Claims-Paying Ratings, Ratings a fidelity bond in such form and amount as are consistent with would permit it to be a qualified ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten thirty (1030) days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations In addition, each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement keep in force with Qualified Insurers that possess the Required Claims-Paying Ratings a policy or Special Servicerpolicies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its obligation to service the Mortgage Loans for which it is responsible hereunder, which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified ▇▇▇▇▇▇ Mae seller-servicer of multifamily mortgage loans. Any such errors and omissions policy, if required, shall provide that it may not be canceled without thirty (30) days' prior written notice to the Trustee.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Commercial Mortgage Pass Thru Certs Series 2001-3)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case Each of each Mortgage Loan, the Master Servicer shall and the Special Servicer shall, as to those Mortgage Loans it is obligated to service hereunder, use reasonable its best efforts consistent in accordance with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower the related Mortgagor is required by the terms of the related Mortgage Loan and does not so maintain, the Master Servicer will (even in the case of Specially Serviced Mortgage Loans) shall itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property maintain (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal subject to the lesser provisions of (i) the full replacement cost of improvements securing such Mortgage Loan this Agreement regarding Nonrecoverable Advances, and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, further subject to applicable lawSection 3.11(h) hereof), under to the related Mortgage Loan Documents; provided that all extent the Trustee, as mortgagee on behalf of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant Certificateholders, has an insurable interest and to the terms of the related Mortgage Loan Documents and is extent available at commercially reasonable rates;
) all insurance coverage as is required under the related Mortgage (B) subject to applicable law); provided that if and any Mortgage permits the holder thereof to dictate to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to Mortgagor the insurance provider from whom the related Borrower is coverage to obtain the requisite insurance coveragebe maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall (to the extent impose such insurance requirements as are consistent with the Servicing Standard) use efforts consistent with the Servicing Standard . The Special Servicer shall cause to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thatbe maintained for each REO Property, in each case, have case with an insurer that possesses the Required Claims-Paying Ratings at the time such policy is purchased, no less insurance coverage is obtained;
(C) than was previously required of the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, related Mortgagor under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty Mortgage did not so require, hazard insurance, public liability insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist and business interruption or similar acts, and/or (ii) specific rent loss insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, in such insurance upon terms not materially less favorable than those in place amounts as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry are consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with be reimbursed for the premium costs thereof as a Servicing Standard, Advance pursuant to maintain with Qualified Insurers having and to the Required Claims-Paying Ratings extent permitted under Section 3.05
(a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, the Mortgaged Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer Servicer, as applicable, in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy insuring against hazard losses on any or all of the Mortgage Loans Mortgaged Properties (in the case of the Master Servicer) or REO Properties, as applicableProperties (in the case of the Special Servicer), then, to the extent such policy (Ai) is obtained from a Qualified Insurer having that possesses the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable, so covered, and the premium costs thereof shall be, if and to the extent they are specifically attributable either to a specific Mortgaged Property during any period that the related Mortgagor has failed to maintain the hazard insurance required under the related Mortgage Loan in respect of such Mortgaged Property or to a specific REO Property, a Servicing Advance reimbursable pursuant to and to the extent permitted under Section 3.05(a); provided that, to the extent that such premium costs are attributable to properties other than Mortgaged Properties and/or REO Properties or are attributable to Mortgaged Properties as to which the hazard insurance required under the related Mortgage Loan is being maintained, they shall be borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder Property, as applicable, a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyproperty specific policy (taking into account any deductible clause that would have been permitted therein), promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds (without any right of reimbursement from the Trust, reimbursement) the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such losses up to the difference between the amount of the deductible clause to in such blanket policy and the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence amount of any deductible clause that would have been permitted under such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)property specific policy. The Master Servicer and the Special Servicer shall each agree to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Nationslink Funding Corp Comm Mort Pass THR Cert Ser 1998-2)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case Each of each Mortgage Loan, the Master Servicer shall and the Special Servicer shall, as to those Mortgage Loans it is obligated to service hereunder, use reasonable its best efforts consistent in accordance with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower the related Mortgagor does not so maintain, the Master Servicer will (even in the case of Specially Serviced Mortgage Loans) shall itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property maintain (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal subject to the lesser provisions of (i) the full replacement cost of improvements securing such Mortgage Loan this Agreement regarding Nonrecoverable Advances, and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, further subject to applicable lawSection 3.11(h) hereof), under to the related Mortgage Loan Documents; provided that all extent the Trustee, as mortgagee on behalf of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant Certificateholders, has an insurable interest and to the terms of the related Mortgage Loan Documents and is extent available at commercially reasonable rates;
) all insurance coverage as is required under the related Mortgage (B) subject to applicable law); provided that if and any Mortgage permits the holder thereof to dictate to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to Mortgagor the insurance provider from whom the related Borrower is coverage to obtain the requisite insurance coveragebe maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall (to the extent impose such insurance requirements as are consistent with the Servicing Standard) use efforts consistent with the Servicing Standard . The Special Servicer shall cause to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thatbe maintained for each REO Property, in each case, have case with an insurer that possesses the Required Claims-Paying Ratings at the time such policy is purchased, no less insurance coverage is obtained;
(C) than was previously required of the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, related Mortgagor under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty Mortgage did not so require, hazard insurance, public liability insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist and business interruption or similar acts, and/or (ii) specific rent loss insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, in such insurance upon terms not materially less favorable than those in place amounts as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry are consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with be reimbursed for the premium costs thereof as a Servicing Standard, Advance pursuant to maintain with Qualified Insurers having and to the Required Claims-Paying Ratings extent permitted under Section 3.05
(a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, the Mortgaged Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released re leased to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer Servicer, as applicable, in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy insuring against hazard losses on any or all of the Mortgage Loans Mortgaged Properties (in the case of the Master Servicer) or REO Properties, as applicableProperties (in the case of the Special Servicer), then, to the extent such policy (Ai) is obtained from a Qualified Insurer having that possesses the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable, so covered, and the premium costs thereof shall be, if and to the extent they are specifically attributable either to a specific Mortgaged Property during any period that the related Mortgagor has failed to maintain the hazard insurance required under the related Mortgage Loan in respect of such Mortgaged Property or to a specific REO Property, a Servicing Advance reimbursable pursuant to and to the extent permitted under Section 3.05(a); provided that, to the extent that such premium costs are attributable to properties other than Mortgaged Properties and/or REO Properties or are attributable to Mortgaged Properties as to which the hazard insurance required under the related Mortgage Loan is being maintained, they shall be borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder Property, as applicable, a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyproperty specific policy (taking into account any deductible clause that would have been permitted therein), promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds (without any right of reimbursement from the Trust, reimbursement) the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such losses up to the difference between the amount of the deductible clause to in such blanket policy and the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence amount of any deductible clause that would have been permitted under such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)property specific policy. The Master Servicer and the Special Servicer shall each agree to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cii) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if If the Master Servicer has actual knowledge shall cause any Mortgaged Property or the Special Servicer shall cause any REO Property to be covered by a master single interest insurance policy naming the Master Servicer or the Special Servicer, as applicable, on behalf of any event the Trustee as the loss payee, then to the extent such policy (an “Insured Environmental Event”i) giving rise is obtained from a Qualified Insurer that possesses the Required Claims-Paying Ratings and (ii) provides protection equivalent to a claim under an Environmental Insurance Policythe individual policies otherwise required, the Master Servicer shall notify or the Special Servicer Servicer, as applicable, shall conclusively be deemed to have satisfied its obligation to cause such effect and insurance to be maintained on such Mortgaged Property (in the case of the Master Servicer) or REO Property (in the case of the Special Servicer). If the Master Servicer shall take reasonable actions cause any Mortgaged Property as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect related Mortgagor has failed to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policymaintain the required insurance coverage, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, or the Special Servicer shall notify cause any REO Property, to be covered by such master single interest insurance policy, then the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions incremental costs of such Environmental Insurance Policy insurance applicable to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each such Mortgaged Property or REO Property that (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether covered thereby) paid by the Master Servicer or the Special Servicer, as applicable, shall constitute a Servicing Advance. The Master Servicer shall, consistent with the Servicing Standard and the terms of the related Mortgage Loan documents, pursue the related Mortgagor for the amount of such incremental costs. All other costs associated with any such master single interest insurance policy (including, without limitation, any minimum or standby premium payable for such policy) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such master single interest insurance policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as applicable, shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property, as the case may be, a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such property specific policy had it been maintained, promptly deposit into the Certificate Account from its own funds (without right of reimbursement) the amount not otherwise payable under the master single interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing AdvanceStandard.
(dc) The Each of the Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having recognized insurers that possess the Required Claims-Paying Ratings, Ratings a fidelity bond in such form and amount as are consistent with would permit it to be a qualified ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) 30 days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations In addition, each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement keep in force with recognized insurers that possess the Required Claims-Paying Ratings a policy or policies of insurance covering loss occasioned by the errors and omissions of its (or, in the case of each of the initial Master Servicer and the initial Special Servicer, its general partner's) officers and employees in connection with its obligation to service the Mortgage Loans for which it is responsible hereunder, which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Any such errors and omissions policy, if required, shall provide that it may not be canceled without 30 days' prior written notice to the Trustee. It is understood and agreed that the Rating Agencies have affirmed in writing that the use of certain specified insurance carriers by the Master Servicer, the Special Servicer and/or Sub-Servicers will not, in and of itself, cause a downgrade, qualification or change in the rating assigned to any Class of Certificates, notwithstanding that such insurance carriers do not possess the Required Claims-Paying Ratings as of the Closing Date. It is further understood and agreed that if the claims-paying ratings of any such insurance carrier are downgraded below the level assigned as of the Closing Date, such insurance carrier promptly shall be replaced by a Qualified Insurer that possesses the Required Claims-Paying Ratings.
(d) All insurance coverage required to be maintained under this Section 3.07 shall be obtained from Qualified Insurers.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Mortgage Capital Funding Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Performing Serviced Mortgage Loan, the applicable Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the such Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and or (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the applicable Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Performing Serviced Mortgage Loan unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates (and if the applicable Master Servicer does not cause the Borrower to maintain or does not itself maintain such earthquake or environmental insurance policy on any Mortgaged Property, the Special Servicer shall have the right, but not the duty, to obtain, at the Trust's expense, earthquake or environmental insurance on any Mortgaged Property securing a Specially Serviced Mortgage Loan or on an Administered REO Property so long as such insurance is available at commercially reasonable rates);
(B) if and to the extent that any Performing Serviced Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the applicable Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause require the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the applicable Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Performing Serviced Mortgage Loan to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the applicable Master Servicer be required to cause the Borrower under any Performing Serviced Mortgage Loan to maintain, or itself obtain, insurance coverage that the applicable Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property mortgaged property and located in or around the region in which the related Mortgaged Property is locatedlocated (in each case, as determined by the applicable Master Servicer, which shall be entitled to rely, at its own expense, on insurance consultants in making such determination) (and provided that any such determinations by the applicable Master Servicer must be made not less frequently (but need not be made more frequently) than annually but in any event shall be made at the approximate date on which the applicable Master Servicer receives notice of the renewal, replacement or cancellation of coverage);
(E) the reasonable efforts of the applicable Master Servicer to cause the Borrower under any Performing Serviced Mortgage Loan to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the applicable Master Servicer on a force-placed basis; and
(F) to the extent the applicable Master Servicer itself is required to maintain insurance that the Borrower under any Performing Serviced Mortgage Loan does not maintain, the applicable Master Servicer shall not be required to maintain insurance other than what is available to the such Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails applicable Master Servicer shall, prior to maintain availing itself of any limitation described in that clause with respect to any Performing Serviced Mortgage Loan that has a Stated Principal Balance in excess of $2,500,000, obtain the related Mortgaged Property approval or disapproval of the Special Servicer (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically excludeand, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar actsin connection therewith, the Special Servicer shall be required to comply with any applicable provisions of Section 3.24 and/or 3.27, if and as applicable). The applicable Master Servicer shall cause be entitled to rely on the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as determination of the Closing Date, unless the Special Servicer has determined made in its reasonable judgment based on inquiry consistent connection with such approval or disapproval. The Special Servicer shall decide whether to withhold or grant such approval in accordance with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety seven Business Days (90or in the case of the Serviced Mortgage Loan Groups, such longer period of time, if any, that is provided in or pursuant to Section 3.24 and/or 3.27, if and as applicable) days of the Special Servicer’s 's receipt from the applicable Master Servicer of the such Master Servicer’s 's determination and analysis and all information reasonably requested thereby and reasonably available to the applicable Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The applicable Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Controlling Class Representative and (if a Serviced Mortgage Loan Group is involved) the Majority Subordinate Certificateholder related Serviced Non-Pooled Mortgage Loan Noteholder, if the applicable Master Servicer determines that the Borrower under any Borrower Performing Serviced Mortgage Loan has failed to maintain insurance required under (or that the such Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if the Borrower under any Borrower Performing Serviced Mortgage Loan has notified the applicable Master Servicer in writing that such the Borrower does not intend to maintain such insurance and the applicable Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), 3.24 and/or 3.243.27, as applicable, with respect to each Specially Serviced Mortgage Loan and Administered REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain (and, in the case of Specially Serviced Mortgage Loans, the Special Servicer shall (x) direct the applicable Master Servicer to make a Servicing Advance for the costs associated with coverage that the Special Servicer determines to maintain, in which case the applicable Master Servicer shall make such Servicing Advance (subject to Section 3.19(b)), or (y) direct the applicable Master Servicer to cause such coverage to be maintained under the applicable Master Servicer's force-place insurance policy, in which case the applicable Master Servicer shall so cause such coverage to be maintained thereunder to the extent that the identified coverage is available under the applicable Master Servicer's existing force-place policy) with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan or at such REO Property or (ii) the outstanding principal balance of such Mortgage Loan or the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months or, with respect to Mortgage Loans with initial principal balances greater than $35 million, at least eighteen (18) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that neither the applicable Master Servicer nor the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the applicable Master Servicer on behalf of the Trustee, in the case of insurance maintained in respect of a Serviced Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an Administered REO Property. Any amounts collected by the a Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account of the applicable Master Servicer, a related Companion Note Custodial Account and/or a related Subordinate Note Custodial Account, as appropriate in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Serviced Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the a Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the a Master Servicer or Special Servicer on behalf of the Trust (and, if applicable, the Serviced Non-Pooled Mortgage Loan Noteholders) to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the a Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the such Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the a Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Serviced Mortgage Loans or Administered REO Properties, as applicable, as to which it is the applicable Master Servicer or the Special Servicer, as the case may be, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the a Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “"A” " by Fitch and the "A" by S&P and such Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain maintain, and deposits into its Collection Account (any such deposit to be deemed to constitute "Insurance Proceeds") the amount of any loss to the Trust that would have been covered by, the individual policies otherwise required, the such Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the applicable Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Serviced Mortgage Loan or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the applicable Collection Account (or, to the extent the loss affects a related Serviced Non-Pooled Mortgage Loan Noteholder, in the related Companion Note Custodial Account or Subordinate Note Custodial Account, as applicable) maintained by the applicable Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Serviced Mortgage Loan (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer Servicers and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and CertificateholdersCertificateholders and, if applicable, the Serviced Non-Pooled Mortgage Loan Noteholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the applicable Master Servicer (or the applicable Primary Servicer serving on its behalf) has actual knowledge of any event (an “"Insured Environmental Event”") giving rise to a claim under an Environmental Insurance Policy, the such Master Servicer shall notify the Special Servicer to such effect and the such Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Administered REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the applicable Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2006-Pwr11)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In Each of the Master Servicer (in the case of each Mortgage Loan, Loans (including the Master ▇▇▇▇▇▇▇▇ Fashion Center A/B Loan but excluding the Oakbrook Center Mortgage Loan and Specially Serviced Mortgage Loans) and the Special Servicer (solely in the case of Specially Serviced Mortgage Loans) shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower each Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for in respect of the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of (to the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless extent such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and coverage is available at commercially reasonable rates;
(B) terms as determined by the Master Servicer or Special Servicer, as applicable); provided, that if and any Mortgage permits the holder thereof to dictate to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to Mortgagor the insurance provider from whom the related Borrower is coverage to obtain the requisite insurance coveragebe maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall impose such insurance requirements as are consistent with the Servicing Standard. If a Mortgagor fails to maintain such insurance, the Master Servicer (at the direction of the Special Servicer in the case of a Specially Serviced Mortgage Loan or REO Loan) shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates terms as determined by the Master Servicer, which shall be entitled to rely (at its own expense) on an opinion of counsel or insurance consultants in making such determination) obtain such insurance (which may be through a master or single interest policy) and the related hazards are not at the time commonly insured against at the then-available rates for properties similar cost (including any deductible relating to the related Mortgaged Property such insurance and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts any out of pocket cost incurred by the Master Servicer in obtaining advice of counsel or insurance consultants) of such insurance (or in the case of a master or single interest policy, the incremental cost (including any deductible relating to cause such insurance) of such insurance relating to the Borrower to maintain insurance specific Mortgaged Property), shall be conducted in a manner that takes into account the insurance that would then Servicing Advance and shall be available to recoverable by the Master Servicer on a force-placed basis; and
(F) pursuant to the extent Section 3.05(a). If the Master Servicer itself is required to maintain insurance or Special Servicer, as the case may be, determines in accordance with the preceding provisions of this paragraph that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such applicable insurance is not available at commercially reasonable rates and that such hazards are not at terms, the time commonly insured against for properties similar to the related Mortgaged Property and located in Master Servicer or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for , as the case may be, shall notify the Majority Certificateholder of the Controlling Class and the Rating Agencies of such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If at any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available time a Mortgaged Property related to the Master Servicer a Mortgage Loan serviced hereunder is located in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is area identified in the process of making a determination described above in this paragraph, then, during the period of such evaluation Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Special Servicer Federal Emergency Management Agency as having special flood hazards or it becomes located in such area by virtue of remapping conducted by such agency (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicableand flood insurance has been made available), the Master Servicer shall not be liable for any loss related (or in the case of a Specially Serviced Mortgage Loan, the Special Servicer) shall, if and to its failure the extent that the Mortgage Loan (including the ▇▇▇▇▇▇▇▇ Fashion Center A/B Loan) requires the Mortgagor or permits the mortgagee to require the Mortgagor to do so, use reasonable efforts to cause the related Borrower Mortgagor to maintain terrorism a flood insurance and shall not be policy meeting the requirements of the current guideline of the Federal Insurance Administration in default the maximum amount of its obligations hereunder as a result insurance coverage available under the National Flood Insurance Act of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer1968, the TrusteeFlood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) as amended, unless otherwise specified by the related Mortgage Loan Documents and such failure materially and adversely affects such (including the ▇▇▇▇▇▇▇▇ Fashion Center A/B Loan). With respect to any Mortgage Loan and/or (including the interest ▇▇▇▇▇▇▇▇ Fashion Center A/B Loan but excluding the Oakbrook Center Mortgage Loan), if (i) the Mortgagor is required by the terms of the Trust in Mortgage Loan (including the ▇▇▇▇▇▇▇▇ Fashion Center A/B Loan) to maintain such insurance (or becomes obligated by virtue of the related Mortgaged Property or if any Borrower has notified the Master Servicer becoming located in writing that such Borrower does not intend to maintain area by virtue of such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (aremapping) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance terms of the related REO Mortgage Loan permit the mortgagee to require the Mortgagor to obtain such insurance, the Master Servicer (or in the case of a Specially Serviced Loan, the Special Servicer), shall promptly notify the Mortgagor of its obligation to obtain such insurance. If the Mortgagor fails to obtain such flood insurance within 120 days of such notification, the Master Servicer (or in the case of a Specially Serviced Mortgage Loan, butthe Special Servicer) shall obtain such insurance, in any event, in an amount sufficient to avoid the application cost of any co-insurance clause, (b) which shall be a comprehensive general liability insurance policy with coverage comparable to that which would Servicing Advance and shall be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to recoverable by the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required Master Servicer pursuant to the related Mortgage Loan DocumentsSection 3.05(a); provided, however, that the Master Servicer or Special Servicer shall not be required to incur any such cost if such Advance would constitute a Nonrecoverable Servicing Advance; provided, further, if the Master Servicer or Special Servicer, as applicable, shall determine that the payment of such amount is (i) necessary to preserve the related Mortgaged Property and (ii) would be in any event the best interest of the Certificateholders (or with respect to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is ▇▇▇▇▇▇▇▇ Fashion Center A/B Loan, the Certificateholders and the ▇▇▇▇▇▇▇▇ Fashion Center Companion Holders), then the Master Servicer shall make such payment from amounts in the Certificate Account or, with respect to the ▇▇▇▇▇▇▇▇ Fashion Center A/B Loan, from the ▇▇▇▇▇▇▇▇ Fashion Center Custodial Account. Subject to Section 3.17(a), the Special Servicer shall also use reasonable efforts to cause to be maintained for each REO Property (to the extent available at commercially reasonable rates and terms) no less insurance coverage than was previously required of the Mortgagor under the related Mortgage or as is consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer (in the case of Mortgaged Properties) or the Special Servicer (in the case of REO Properties) on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with applicable law, the terms of the related Mortgage Loan (including the ▇▇▇▇▇▇▇▇ Fashion Center A/B Loan) documents and the Servicing Standard) shall be deposited in the Collection Certificate Account or, with respect to the ▇▇▇▇▇▇▇▇ Fashion Center A/B Loan, deposited in accordance with Section 3.04the ▇▇▇▇▇▇▇▇ Fashion Center Custodial Account, subject to withdrawal pursuant to Section 3.053.05(a) or Section 3.05(e), respectively, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid the outstanding principal balance or Stated Principal Balance of the related Mortgage Loan (including the ▇▇▇▇▇▇▇▇ Fashion Center A/B Loan), notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence but shall not limit the rights of be recoverable by the Master Servicer or Special Servicer on behalf of the Trust as a Servicing Advance pursuant to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to Section 3.05(a)or 3.05(e), as applicable.
(i) If the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) obtains and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintains a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or Mortgaged Properties and/or REO Properties, as applicableProperties for which it is responsible to cause the maintenance of insurance hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise 134 required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related such Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any a Mortgaged Property securing a Mortgage Loan or any an REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by or, with respect to the Master Servicer▇▇▇▇▇▇▇▇ Fashion Center A/B Loan, deposited in the ▇▇▇▇▇▇▇▇ Fashion Center Custodial Account (or into the Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (Loan, or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholdersthe Certificateholders (and with respect to the ▇▇▇▇▇▇▇▇ Fashion Center A/B Loan, the Chandler Fashion Companion Holders), claims under any such blanket policy maintained by it in a timely fashion in accordance with the terms of such policy.
(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-force placed insurance policy, which provides protection equivalent to the individual policies otherwise required, the Master Servicer or Special Servicer shall conclusively be deemed to have satisfied its respective obligations to cause hazard insurance to be maintained on such Mortgaged Properties and/or REO Properties. Such policy may contain a deductible clause, in which case the Master Servicer or the Special Servicer, as applicable, shall in the event that (x) there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and (y) 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 Certificate Account or, with respect to the ▇▇▇▇▇▇▇▇ Fashion Center A/B Loan, deposit into the ▇▇▇▇▇▇▇▇ Fashion Center Custodial Account (or into the Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) 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. The Master Servicer and the Special Servicer each agrees to prepare and present, on behalf of itself, the Trustee and the Certificateholders (and with respect to the ▇▇▇▇▇▇▇▇ Fashion Center A/B Loan, the Chandler Fashion Companion Holders), claims under any such master force placed insurance policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard term of this Agreement a blanket fidelity bond and the terms an errors and conditions omissions insurance policy covering its officers and employees and other persons acting on behalf of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard it in connection with any claim its activities under this Agreement and naming the Trustee as an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) additional insured. The amount of coverage 135 shall be (subject at least equal to Section 3.11(h) and Section 3.19(b)) paid bythe coverage that would be required by FNMA or FHLMC, and reimbursable towhichever is greater, with respect to the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be, were servicing and administering the Mortgage Loans, ▇▇▇▇▇▇▇▇ Fashion Center Companion Loans and/or the REO Properties for which it is responsible hereunder for FNMA or FHLMC. Such fidelity Coverage of the Master Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of such Person and providing the coverage required by this Section 3.07(c) shall provide that it may not satisfy the requirements of this Section 3.07(c).
(d) All insurance coverage required to be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of maintained by the Master Servicer or Special Servicer, as applicable, under this Section 3.07 shall be obtained from Qualified Insurers having a claims paying ability rating (or the obligations of which are guaranteed or backed by a company having such party’s corporaclaims paying ability rating or insurance financial strength rating, as applicable) of not less than (x) "A" by Standard & Poor's and (y) "A2" by ▇▇▇▇▇'▇; provided, however, that the requirements of clauses (x) or (y) shall not be applicable with respect to Standard & Poor's or ▇▇▇▇▇'▇, as applicable, if the related Rating Agency shall have confirmed in writing that an insurance company with a lower claims paying ability rating shall not result, in and of itself, in a downgrade, qualification or withdrawal of the then current ratings by such Rating Agency of any Class of Certificates.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Gmac Commercial Mortgage Securities Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts to cause each Mortgagor to maintain in respect of the related Mortgaged Property all insurance coverage (other than earthquake insurance) as is required under the related Mortgage; provided that if any Mortgage permits the holder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Master Servicer, or the Special Servicer in the case of Specially Serviced Mortgage Loans, shall impose such insurance requirements as are consistent with the Servicing Standard to cause the related Borrower Standard. If a Mortgagor fails to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintaininsurance, the Master Servicer will itself cause to be maintained with Qualified Insurers having or the Required Claims-Paying Ratings) for Special Servicer in the related Mortgaged Property case of Specially Serviced Mortgage Loans, shall (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is extent available at commercially reasonable rates;
) obtain such insurance (Bwhich may be through a master or single interest policy), and the cost (including any deductible relating to such insurance) of such insurance (or in the case of a master or single interest policy, the incremental cost (including any deductible relating to such insurance) of such insurance relating to the specific Mortgaged Property) shall be a Servicing Advance (subject to the limitations set forth in Section 4.2(a)) recoverable by the Master Servicer, or the Special Servicer in the case of Specially Serviced Mortgage Loans, pursuant to Section 5.2. If at any time a Mortgaged Property is located in an area identified in the Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Federal Emergency Management Agency as having special flood hazards or it becomes located in such area by virtue of remapping conducted by such agency (and flood insurance has been made available), then upon the Master Servicer or the Special Servicer becoming aware of such fact (using efforts consistent with the Servicing Standard), the Master Servicer, or the Special Servicer in the case of Specially Serviced Mortgage Loans, shall, if and to the extent that any the Mortgage Loan grants requires the lender thereunder any discretion (by way of consentMortgagor or permits the Mortgagee to require the Mortgagor to do so, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower Mortgagor to obtain maintain a flood insurance policy meeting the requisite insurance requirements of the current guidelines of the Federal Insurance Administration in an amount representing coverage from Qualified Insurers that, in each case, have of not less than the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
least of (Ci) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under unpaid principal balance of the related Mortgage Loan Documents;
Loan, (Dii) in no event shall the Master Servicer be required to cause full insurable value of such Mortgaged Property, (iii) the Borrower to maintain, or itself obtain, maximum amount of insurance coverage that available under the Master Servicer has determined is either National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as amended, and (iv) 100% of the replacement cost of the improvements on such Mortgaged Property. If (i) not available at any rate the Mortgagor is required by the terms of the Mortgage Loan to maintain such insurance (or becomes obligated by virtue of the related Mortgaged Property becoming located in such area by virtue of such remapping) or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts terms of the Master Servicer Mortgage Loan permit the mortgagee to cause require the Borrower Mortgagor to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintainobtain such insurance, the Master Servicer shall not be required promptly notify the Mortgagor of its obligation to maintain insurance other than what is available to obtain such insurance. If the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower Mortgagor fails to maintain with respect to the related Mortgaged Property (i) specific casualty obtain such flood insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar actswithin 120 days of such notification, the Master Servicer shall cause the related Borrower to maintainServicer, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standardcase of Specially Serviced Mortgage Loans, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) shall obtain such insurance is not (to the extent available at commercially reasonable rates rates), and that the cost of such hazards are not at insurance shall be a Servicing Advance recoverable by the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is locatedMaster Servicer, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer in the case of Specially Serviced Mortgage Loans, pursuant to consult with the Subordinate Class Representative and/or Trust Advisor, the Section 5.2. The Special Servicer will not shall cause to be maintained for each REO Property no less insurance coverage than was previously required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require Mortgagor under the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insuranceMortgage. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain All such insurance and policies shall contain a "standard" mortgagee clause or shall identify the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or Trustee as the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24named insured, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer (in the case of Mortgaged Properties) or the Special Servicer (in the case of REO Properties) on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with applicable law, the terms of the related Mortgage Loan documents and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property5.2. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid the outstanding principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may beapplicable, self-insures for its obligation causes any Mortgaged Property or REO Property to maintain be covered by a blanket insurance policy, which provides protection equivalent to the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall Servicer will conclusively be deemed to have satisfied its obligation respective obligations to cause hazard insurance to be maintained on the related such Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount)clause, in which case the Master Servicer or the Special Servicer, as applicable, will in the case may be, whichever maintains such policy, shall, if event that (i) there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy otherwise complying with the requirements provisions of Section 3.07(a8.5(a), and there shall have been one or more losses (ii) a loss occurs that would have been covered by such an individual policya policy had it been maintained, promptly immediately deposit into the Collection Account maintained by (or into the Master Servicer, Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed such policy in connection with such loss or losses because of such deductible clause deductible, to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (Loan, or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed insurance policy maintained by it in a timely fashion in accordance with the terms of such policy. The incremental cost of such insurance allocable to any Mortgaged Property or REO Property, if not borne by the Mortgagor, will be paid by the Master Servicer as a Servicing Advance.
(cii) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by 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 provides protection equivalent to the individual policies otherwise required, the Master Servicer or Special Servicer shall conclusively be deemed to have satisfied its respective obligations to cause hazard insurance to be maintained on such Mortgaged Properties and/or REO Properties. Such policy may contain a deductible clause, in which case the Master Servicers or the 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 8.5(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 (or into the Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) 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. The Master Servicer and the Special Servicer each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any 113 such master force placed insurance policy maintained by it in a timely fashion in accordance with the terms of such policy. The incremental cost of such insurance allocable to any Mortgaged Property or REO Property, if not borne by the Mortgagor, will be paid by the Master Servicer as a Servicing Advance.
(c) Each of the Master Servicer and the Special Servicer shall obtain and maintain at its own expense and keep in full force and effect throughout the term of this Agreement a blanket fidelity bond and an errors and omissions insurance policy covering its officers and employees. The amount of coverage shall be (subject at least equal to Section 3.11(h) and Section 3.19(b)) paid bythe coverage that would be required by FNMA or FHLMC, and reimbursable towhichever is greater, with respect to the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be, were servicing and administering the Mortgage Loans and/or REO Properties for which it is responsible hereunder for FNMA or FHLMC. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations Coverage of the Master Servicer or the Special ServicerServicer under a policy or bond obtained by an Affiliate of such Person and providing the coverage required by this Section 8.5(c) shall satisfy the requirements of this Section 8.5(c).
(d) All insurance coverage required to be maintained by the Master Servicer or the Special Servicer under this Section 8.5 shall be obtained from Qualified Insurers (A) whose claims-paying ability is rated (or the obligations of which are guaranteed or backed by a company having such claims paying ability or rating) at least "A" or its equivalent (or, in the case of a blanket hazard policy obtained in accordance with Section 8.5(b), rated in one of the two highest ratings categories) by any two Rating Agencies or such party’s corpora(B) who are (as evidenced by the receipt of Rating Agency Confirmation) otherwise acceptable to each Rating Agency.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Morgan Stanley Capital I Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Performing Serviced Mortgage Loan, the applicable Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the such Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and or (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the applicable Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Performing Serviced Mortgage Loan unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates (and if the applicable Master Servicer does not cause the Borrower to maintain or does not itself maintain such earthquake or environmental insurance policy on any Mortgaged Property, the Special Servicer shall have the right, but not the duty, to obtain, at the Trust's expense, earthquake or environmental insurance on any Mortgaged Property securing a Specially Serviced Mortgage Loan or on an Administered REO Property so long as such insurance is available at commercially reasonable rates);
(B) if and to the extent that any Performing Serviced Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the applicable Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause require the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the applicable Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Performing Serviced Mortgage Loan to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the applicable Master Servicer be required to cause the Borrower under any Performing Serviced Mortgage Loan to maintain, or itself obtain, insurance coverage that the applicable Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property mortgaged property and located in or around the region in which the related Mortgaged Property is locatedlocated (in each case, as determined by the applicable Master Servicer, which shall be entitled to rely, at its own expense, on insurance consultants in making such determination) (and provided that any such determinations by the applicable Master Servicer must be made not less frequently (but need not be made more frequently) than annually but in any event shall be made at the approximate date on which the applicable Master Servicer receives notice of the renewal, replacement or cancellation of coverage);
(E) the reasonable efforts of the applicable Master Servicer to cause the Borrower under any Performing Serviced Mortgage Loan to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the applicable Master Servicer on a force-placed basis; and
(F) to the extent the applicable Master Servicer itself is required to maintain insurance that the Borrower under any Performing Serviced Mortgage Loan does not maintain, the applicable Master Servicer shall not be required to maintain insurance other than what is available to the such Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails applicable Master Servicer shall, prior to maintain availing itself of any limitation described in that clause with respect to any Performing Serviced Mortgage Loan that has a Stated Principal Balance in excess of $2,500,000, obtain the related Mortgaged Property approval or disapproval of the Special Servicer (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically excludeand, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar actsin connection therewith, the Special Servicer shall be required to comply with any applicable provisions of Section 3.24). The applicable Master Servicer shall cause be entitled to rely on the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as determination of the Closing Date, unless the Special Servicer has determined made in its reasonable judgment based on inquiry consistent connection with such approval or disapproval. The Special Servicer shall decide whether to withhold or grant such approval in accordance with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days seven Business Days of the Special Servicer’s 's receipt from the applicable Master Servicer of the such Master Servicer’s 's determination and analysis and all information reasonably requested thereby and reasonably available to the applicable Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The applicable Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Controlling Class Representative and (if a Serviced Mortgage Loan Group is involved) the Majority Subordinate Certificateholder related Serviced Non-Pooled Mortgage Loan Noteholder, if the applicable Master Servicer determines that the Borrower under any Borrower Performing Serviced Mortgage Loan has failed to maintain insurance required under (or that the such Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if the Borrower under any Borrower Performing Serviced Mortgage Loan has notified the applicable Master Servicer in writing that such the Borrower does not intend to maintain such insurance and the applicable Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections Section 3.17(b), ) and/or Section 3.24, as applicable, with respect to each Specially Serviced Mortgage Loan and Administered REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain (and, in the case of Specially Serviced Mortgage Loans, the Special Servicer shall itself maintain, subject to the right of the Special Servicer to (x) direct the applicable Master Servicer to make a Servicing Advance for the costs associated with coverage that the Special Servicer determines to maintain, in which case the applicable Master Servicer shall make such Servicing Advance (subject to Section 3.19(b)), or (y) direct the applicable Master Servicer to cause such coverage to be maintained under the applicable Master Servicer's force-place insurance policy, in which case the applicable Master Servicer shall so cause such coverage to be maintained thereunder to the extent that the identified coverage is available under the applicable Master Servicer's existing force-place policy) with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan or at such REO Property or (ii) the outstanding principal balance of such Mortgage Loan or the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months or, with respect to Mortgage Loans with initial principal balances greater than $35 million, at least eighteen (18) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that neither the applicable Master Servicer nor the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing StandardStandard or coverage with respect to which the Trustee does not have an insurable interest in the related Mortgaged Property or REO Property. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the applicable Master Servicer on behalf of the Trustee, in the case of insurance maintained in respect of a Serviced Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an Administered REO Property. Any amounts collected by the a Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account of the applicable Master Servicer and/or a related Companion Note Custodial Account, as appropriate in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Serviced Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the a Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the a Master Servicer or the Special Servicer on behalf of the Trust (and, if applicable, the Serviced Non-Pooled Mortgage Loan Noteholders) to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the a Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the such Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the a Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Serviced Mortgage Loans or Administered REO Properties, as applicable, as to which it is the applicable Master Servicer or the Special Servicer, as the case may be, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the a Master Servicer or the Special Servicer (or its the corporate parentparent of the applicable Master Servicer or the Special Servicer, as the case may be) has long-term unsecured debt obligations that are rated not lower than “"A2” " by ▇▇▇▇▇’▇ and “'▇, "A” " by Fitch and the "A" by DBRS (or, if not rated by DBRS, an equivalent rating (such as those listed above for ▇▇▇▇▇'▇ and Fitch) by at least two nationally recognized statistical rating organizations) and such Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain maintain, and deposits into its Collection Account (any such deposit to be deemed to constitute "Insurance Proceeds") the amount of any loss to the Trust that would have been covered by, the individual policies otherwise required, the such Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the applicable Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Serviced Mortgage Loan or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the applicable Collection Account (or, to the extent the loss affects a related Serviced Non-Pooled Mortgage Loan Noteholder, in the related Companion Note Custodial Account) maintained by the applicable Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Serviced Mortgage Loan (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer Servicers and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and CertificateholdersCertificateholders and, if applicable, the Serviced Non-Pooled Mortgage Loan Noteholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2004-Pwr5)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case Each of each Mortgage Loan, the Master Servicer shall and the Special Servicer shall, as to those Mortgage Loans it is obligated to service hereunder, use its reasonable efforts consistent in accordance with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower the related Mortgagor is required by the terms of the related Mortgage Loan and does not so maintain, the Master Servicer will (even in the case of Specially Serviced Mortgage Loans) shall itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property maintain (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal subject to the lesser provisions of (ithis Agreement regarding Nonrecoverable Advances, and further subject to Section 3.11(h) hereof)) and except to the full replacement cost extent that the failure is an Acceptable Insurance Default, to the extent the Trustee, as mortgagee on behalf of improvements securing such Mortgage Loan the Certificateholders, has an insurable interest and (ii) to the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (yextent available at commercially reasonable rates) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; (subject to applicable law), provided that all of if any Mortgage permits the following conditions and/or limitations holder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall apply:
(A) impose such insurance requirements as are consistent with the Servicing Standard. Notwithstanding the foregoing, the Master Servicer shall not be required require the related Mortgagor to maintain any earthquake or environmental upon such Mortgagor's failure, shall itself maintain insurance coverage for property damage resulting from "terrorism" or "terrorist acts" except to the extent such failure constitutes an Acceptable Insurance Default. As mutually agreed upon by the Master Servicer and the Trustee, the Master Servicer shall make available to the Trustee as of the Closing Date copies of each insurance policy on any and declaration of insurance for a Mortgaged Property unless such covered by an insurance policy was in effect policy. Any amounts the Master Servicer pays to maintain insurance as set forth herein shall constitute Servicing Advances. The Special Servicer shall maintain for each REO Property with an insurer that possesses the Required Insurer Financial Strength Rating at the time of the origination of such Mortgage Loan pursuant to the terms policy is purchased, no less insurance coverage than was previously required of the related Mortgagor under the related Mortgage Loan Documents and is (to the extent available at commercially reasonable rates;
(B) and, if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite Mortgage did not so require, hazard insurance, public liability insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts and business interruption or rent loss insurance in such amounts as are consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates the cost of which shall be paid as a Servicing Advance, or the Special Servicer may request the Master Servicer to make such Servicing Advance, and consistent the Master Servicer or the Special Servicer, as applicable, shall be reimbursed for the premium costs thereof and any deductible relating to such insurance as a Servicing Advance with the Servicing Standard. Advance Interest pursuant to Section 3.05
(a) All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, the Mortgaged Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer Servicer, as applicable, in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy insuring against hazard losses on any or all of the Mortgage Loans Mortgaged Properties (in the case of the Master Servicer) or REO Properties, as applicableProperties (in the case of the Special Servicer), then, to the extent such policy (A) is obtained from a Qualified Insurer having that possesses the Required Claims-Paying RatingsInsurer Financial Strength Rating, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable, so covered, and the premium costs and any deductible thereof shall be, if and to the extent they are specifically attributable either to a specific Mortgaged Property during any period that the related Mortgagor has failed to maintain the hazard insurance required under the related Mortgage Loan in respect of such Mortgaged Property or to a specific REO Property, a Servicing Advance by the Master Servicer at the direction of the Special Servicer (in the case of a Specially Serviced Mortgage Loan) under Section 3.07(a) which is reimbursable to the Master Servicer pursuant to and to the extent permitted under Section 3.05(a); provided that, to the extent that such premium costs are attributable to properties other than Mortgaged Properties and/or REO Properties or are attributable to Mortgaged Properties as to which the hazard insurance required under the related Mortgage Loan is being maintained, they shall be borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such a blanket or master force-placed policy may contain a reasonable deductible clause (not in excess of a customary amount)clause, in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder Property, as applicable, a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyproperty specific policy (taking into account any deductible clause that would have been permitted therein), promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds (without any right of reimbursement from the Trust, reimbursement) the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such losses up to the difference between the amount of the deductible clause to in such blanket policy and the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence amount of any deductible clause that would have been permitted under such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)property specific policy. The Master Servicer and the Special Servicer shall each agree to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cii) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if If the Master Servicer has actual knowledge shall cause any Mortgaged Property or the Special Servicer shall cause any REO Property to be covered by a forced placed insurance policy naming the Master Servicer or the Special Servicer, as applicable, on behalf of any event the Trustee as the loss payee, then to the extent such policy (an “Insured Environmental Event”A) giving rise is obtained from a Qualified Insurer that possesses the Required Insurer Financial Strength Rating and (B) provides protection equivalent to a claim under an Environmental Insurance Policythe individual policies otherwise required, the Master Servicer shall notify or the Special Servicer Servicer, as applicable, shall conclusively be deemed to have satisfied its obligation to cause such effect and insurance to be maintained on such Mortgaged Property (in the case of the Master Servicer) or REO Property (in the case of the Special Servicer). If the Master Servicer shall take reasonable actions cause any Mortgaged Property as are in accordance to which the related Mortgagor has failed to maintain the required insurance coverage, or the Special Servicer shall cause any REO Property, to be covered by such forced placed insurance policy, then the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) paid by the Master Servicer, or the Special Servicer, shall constitute a Servicing Advance which is reimbursable to the Master Servicer or the Special Servicer pursuant to and to the extent permitted under Section 3.05(a). The Master Servicer or the Special Servicer shall, consistent with the Servicing Standard and the terms and conditions of the related Mortgage Loan documents, pursue the related Mortgagor for the amount of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunderincremental costs. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or All other out-of-pocket costs incurred in accordance with the Servicing Standard in connection associated with any claim under an Environmental Insurance Policy described above such forced placed insurance policy (whether by the Master Servicer including, without limitation, any minimum or the Special Servicerstandby premium payable for such policy) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such forced placed insurance policy may contain a reasonable deductible clause, in which case the Master Servicer or the Special Servicer, as applicable, shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property, as the case may be, a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such property specific policy had it been maintained, promptly deposit into the Certificate Account from its own funds (without right of reimbursement) the amount not otherwise payable under the forced placed 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing AdvanceStandard.
(dc) The Each of the Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having Insurers that possess the Required Claims-Paying Ratings, Insurer Financial Strength Rating a fidelity bond in such form and amount as are consistent with would permit it to be a qualified Fannie Mae or Freddie Mac seller-servicer of multifamily mortgage loans. ▇▇▇▇ ▇▇ the Servicing Standard. The Master ▇▇▇▇▇▇ Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten thirty (1030) days’ ' prior written notice to the Trustee. So In the event the Trustee becomes the successor Master Servicer or successor Special Servicer pursuant to Section 7.02, the Trustee shall be permitted to self-insure for purposes of meeting the requirements of this Section 3.07(c) for so long as the long-term unsecured debt obligations Trustee is rated no lower than "A" by S&P and "A2" by Moody's Investors Service, Inc. In addition, each of the Master M▇▇▇▇▇ ▇ervicer and the Special Servicer shall at all times during the term of this Agreement keep in force with Qualified Insurers that possess the Required Insurer Financial Strength Rating a policy or Special Servicerpolicies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its obligation to service the Mortgage Loans for which it is responsible hereunder, which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified Fannie Mae seller-servicer of multifamily mortgage loans. Any such erro▇▇ ▇▇▇ ▇▇▇ssions policy, if required, shall provide that it may not be canceled without thirty (30) days' prior written notice to the Trustee.
(d) It is understood and agreed for the avoidance of doubt that an amendment is pending concerning the Bank of America Plaza Loan to adjust the rating requirements for insurers with respect to such Mortgage Loan in a manner consistent with the description of such requirements in the Prospectus Supplement, and that when such Mortgage Loan is so amended, such amended requirements shall apply hereunder with respect to such Mortgage Loan.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Banc of America Commercial Mort Pass Through Cert Ser 2002-2)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case Each of each Mortgage Loan, the Master Servicer shall and the Special Servicer shall, as to those Mortgage Loans it is obligated to service hereunder, use reasonable its best efforts consistent in accordance with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower the related Mortgagor does not so maintain, the Master Servicer will (even in the case of Specially Serviced Mortgage Loans) shall itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property maintain (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal subject to the lesser provisions of (i) the full replacement cost of improvements securing such Mortgage Loan this Agreement regarding Nonrecoverable Advances, and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, further subject to applicable lawSection 3.11(h) hereof, under and to the related Mortgage Loan Documents; provided that all extent the Trustee, as mortgagee on behalf of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant Certificateholders, has an insurable interest and to the terms of the related Mortgage Loan Documents and is extent available at commercially reasonable rates;
) all insurance coverage as is required under the related Mortgage (B) subject to applicable law); provided that if and any Mortgage permits the holder thereof to dictate to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to Mortgagor the insurance provider from whom the related Borrower is coverage to obtain the requisite insurance coveragebe maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall (to the extent impose such insurance requirements as are consistent with the Servicing Standard) use efforts consistent with the Servicing Standard . The Special Servicer shall cause to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thatbe maintained for each REO Property, in each casecase with an insurer that possesses (or whose obligations are guaranteed or backed, have in writing, by an entity having) the Required Claims-Paying Ratings at the time such policy is purchased, no less insurance coverage is obtained;
(C) than was previously required of the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, related Mortgagor under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty Mortgage did not so require, hazard insurance, public liability insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist and business interruption or similar acts, and/or (ii) specific rent loss insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, in such insurance upon terms not materially less favorable than those in place amounts as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry are consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with be reimbursed for the premium costs thereof as a Servicing Standard, Advance pursuant to maintain with Qualified Insurers having and to the Required Claims-Paying Ratings extent permitted under Section 3.05
(a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, the Mortgaged Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer Servicer, as applicable, in maintaining any such insurance shall not, solely for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust provision is in no way intended to enforce any obligations of affect amounts due and owing from the related Borrower Mortgagor under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy insuring against hazard losses on any or all of the Mortgage Loans Mortgaged Properties (in the case of the Master Servicer) or REO Properties, as applicableProperties (in the case of the Special Servicer), then, to the extent such policy (Ai) is obtained from a Qualified Insurer having that possesses (or whose obligations are guaranteed or backed, in writing, by an entity having) the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable, so covered, and the premium costs thereof shall be, if and to the extent they are specifically attributable either to a specific Mortgaged Property during any period that the related Mortgagor has failed to maintain the hazard insurance required under the related Mortgage Loan in respect of such Mortgaged Property or to a specific REO Property, a Servicing Advance reimbursable pursuant to and to the extent permitted under Section 3.05(a); provided that, to the extent that such premium costs are attributable to properties other than Mortgaged Properties and/or REO Properties or are attributable to Mortgaged Properties as to which the hazard insurance required under the related Mortgage Loan is being maintained, they shall be borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder Property, as applicable, a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyproperty specific policy (taking into account any deductible clause that would have been permitted therein), promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds (without any right of reimbursement from the Trust, reimbursement) the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such losses up to the difference between the amount of the deductible clause to in such blanket policy and the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence amount of any deductible clause that would have been permitted under such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)property specific policy. The Master Servicer and the Special Servicer shall each agree to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cii) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if If the Master Servicer has actual knowledge shall cause any Mortgaged Property or the Special Servicer shall cause any REO Property to be covered by a master single interest insurance policy naming the Master Servicer or the Special Servicer, as applicable, on behalf of any event the Trustee as the loss payee, then to the extent such policy (i) is obtained from a Qualified Insurer that possesses (or whose obligations are guaranteed or backed, in writing, by an “Insured Environmental Event”entity having) giving rise the Required Claims-Paying Ratings and (ii) provides protection equivalent to a claim under an Environmental Insurance Policythe individual policies otherwise required, the Master Servicer shall notify or the Special Servicer Servicer, as applicable, shall conclusively be deemed to have satisfied its obligation to cause such effect and insurance to be maintained on such Mortgaged Property (in the case of the Master Servicer) or REO Property (in the case of the Special Servicer). If the Master Servicer shall take reasonable actions cause any Mortgaged Property as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect related Mortgagor has failed to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policymaintain the required insurance coverage, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, or the Special Servicer shall notify cause any REO Property, to be covered by such master single interest insurance policy, then the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions incremental costs of such Environmental Insurance Policy insurance applicable to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each such Mortgaged Property or REO Property that (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether covered thereby) paid by the Master Servicer or the Special Servicer, as applicable, shall constitute a Servicing Advance. The Master Servicer shall, consistent with the Servicing Standard and the terms of the related Mortgage Loan documents, pursue the related Mortgagor for the amount of such incremental costs. All other costs associated with any such master single interest insurance policy (including, without limitation, any minimum or standby premium payable for such policy) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such master single interest insurance policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as applicable, shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property, as the case may be, a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such property specific policy had it been maintained, promptly deposit into the Collection Account from its own funds (without right of reimbursement) the amount not otherwise payable under the master single interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing AdvanceStandard.
(dc) The Each of the Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having recognized insurers that possess (or whose obligations are guaranteed or backed, in writing, by entities having) the Required Claims-Paying Ratings, Ratings a fidelity bond in such form and amount as are consistent with would permit it to be a qualified ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) 30 days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations In addition, each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement keep in force with recognized insurers that possess (or whose obligations are guaranteed or backed, in writing, by entities having) the Required Claims-Paying Ratings a policy or policies of insurance covering loss occasioned by the errors and omissions of its (or, in the case of each of the initial Master Servicer and the initial Special Servicer, its general partner's) officers and employees in connection with its obligation to service the Mortgage Loans for which it is responsible hereunder, which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Any such errors and omissions policy, if required, shall provide that it may not be canceled without 30 days' prior written notice to the Trustee.
(d) All insurance coverage required to be maintained under this Section 3.07 shall be obtained from Qualified Insurers.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Mortgage Capital Funding Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts to cause each Mortgagor to maintain in respect of the related Mortgaged Property all insurance coverage (other than 123 earthquake insurance) as is required under the related Mortgage; provided that if any Mortgage permits the holder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Master Servicer, or the Special Servicer in the case of Specially Serviced Mortgage Loans, shall impose such insurance requirements as are consistent with the Servicing Standard to cause the related Borrower Standard. If a Mortgagor fails to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverageinsurance, the Master Servicer shall (to the extent available at commercially reasonable rates and to the extent the Trustee, as mortgagee on behalf of the Trust, has an insurable interest) obtain such insurance (which may be through a master or single interest policy), and the cost (including any deductible relating to such insurance) of such insurance (or in the case of a master or single interest policy, the incremental cost (including any deductible relating to such insurance) of such insurance relating to the specific Mortgaged Property) shall be a Servicing Advance (subject to the limitations set forth in Section 4.2(a)) recoverable by the Master Servicer pursuant to Section 5.2. If at any time a Mortgaged Property is located in an area identified in the Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Federal Emergency Management Agency as having special flood hazards or it becomes located in such area by virtue of remapping conducted by such agency (and flood insurance has been made available), then upon the Master Servicer or the Special Servicer becoming aware of such fact (using efforts consistent with the Servicing Standard) ), the Master Servicer, or the Special Servicer in the case of Specially Serviced Mortgage Loans, shall, if and to the extent that the Mortgage Loan requires the Mortgagor or permits the Mortgagee to require the Mortgagor to do so, use efforts consistent with the Servicing Standard to cause the related Borrower Mortgagor to obtain maintain a flood insurance policy meeting the requisite insurance requirements of the current guidelines of the Federal Insurance Administration in an amount representing coverage from Qualified Insurers that, in each case, have of not less than the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
least of (Ci) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under unpaid principal balance of the related Mortgage Loan Documents;
Loan, (Dii) in no event shall the Master Servicer be required to cause full insurable value of such Mortgaged Property, (iii) the Borrower to maintain, or itself obtain, maximum amount of insurance coverage that available under the Master Servicer has determined is either National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as amended, and (iv) 100% of the replacement cost of the improvements on such Mortgaged Property. If (i) not available at any rate the Mortgagor is required by the terms of the Mortgage Loan to maintain such insurance (or becomes obligated by virtue of the related Mortgaged Property becoming located in such area by virtue of such remapping) or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts terms of the Master Servicer Mortgage Loan permit the mortgagee to cause require the Borrower Mortgagor to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintainobtain such insurance, the Master Servicer shall not be required promptly notify the Mortgagor of its obligation to maintain insurance other than what is available to obtain such insurance. If the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower Mortgagor fails to maintain with respect to the related Mortgaged Property (i) specific casualty obtain such flood insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar actswithin 120 days of such notification, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, obtain such insurance upon terms not materially less favorable than those in place as of (to the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not extent available at commercially reasonable rates rates), and that the cost of such hazards are not at insurance shall be a Servicing Advance recoverable by the time commonly insured against Master Servicer pursuant to Section 5.2. The Special Servicer shall cause to be maintained for properties similar to each REO Property no less insurance coverage than was previously required of the Mortgagor under the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) Mortgage if obtaining such insurance is not available can be done at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”)commercially reasonable rates. The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust AdvisorIn addition, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed entitled to have been granted. If the Special Servicer cause to be maintained earthquake insurance for any REO Property if obtaining such insurance is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting accordance with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents Servicing Standard and such failure materially and adversely affects insurance can be obtained for such Mortgage Loan and/or the interest of the Trust in the related Mortgaged REO Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain at commercially reasonable rates. All such insurance and policies shall contain a "standard" mortgagee clause or shall identify the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or Trustee as the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24named insured, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer (in the case of Mortgaged Properties) or the Special Servicer (in the case of REO 124 Properties) on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with applicable law, the terms of the related Mortgage Loan documents and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property5.2. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid the outstanding principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may beapplicable, self-insures for its obligation causes any Mortgaged Property or REO Property to maintain be covered by a blanket insurance policy, which provides protection equivalent to the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall Servicer will conclusively be deemed to have satisfied its obligation respective obligations to cause hazard insurance to be maintained on the related such Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount)clause, in which case the Master Servicer or the Special Servicer, as applicable, will in the case may be, whichever maintains such policy, shall, if event that (i) there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy otherwise complying with the requirements provisions of Section 3.07(a8.5(a), and there shall have been one or more losses (ii) a loss occurs that would have been covered by such an individual policya policy had it been maintained, promptly immediately deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed such policy in connection with such loss or losses because of such deductible clause deductible, to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (Loan, or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed insurance policy maintained by it in a timely fashion in accordance with the terms of such policy. The incremental cost of such insurance allocable to any Mortgaged Property or REO Property, if not borne by the Mortgagor, will be paid by the Master Servicer as a Servicing Advance.
(cii) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by 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 provides protection equivalent to the individual policies otherwise required, the Master Servicer or Special Servicer shall conclusively be deemed to have satisfied its respective obligations to cause hazard insurance to be maintained on such Mortgaged Properties and/or REO Properties. Such policy may contain a deductible clause, in which case the Master Servicers or the 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 8.5(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. 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 master force placed insurance policy maintained by it in a timely fashion in accordance with the terms of such policy. The incremental cost of such insurance allocable to any Mortgaged Property or REO Property, if not borne by the Mortgagor, will be paid by the Master Servicer as a Servicing Advance.
(c) Each of the Master Servicer and the Special Servicer shall obtain and maintain at its own expense and keep in full force and effect throughout the term of this Agreement a blanket fidelity bond and an errors and omissions insurance policy covering its officers and employees. The amount of coverage shall be (subject at least equal to Section 3.11(h) and Section 3.19(b)) paid bythe coverage that would be required by FNMA or FHLMC, and reimbursable towhichever is greater, with respect to the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be, were servicing and administering the Mortgage Loans and/or REO Properties for which it is responsible hereunder for FNMA or FHLMC. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations Coverage of the Master Servicer or the Special ServicerServicer under a policy or bond obtained by an Affiliate of such Person and providing the coverage required by this Section 8.5(c) shall satisfy the requirements of this Section 8.5(c).
(d) All insurance coverage required to be maintained by the Master Servicer or the Special Servicer under this Section 8.5 shall be obtained from Qualified Insurers (A) whose claims-paying ability is rated (or the obligations of which are guaranteed or backed by a company having such claims paying ability or rating) at least "A" or its equivalent by the Rating Agencies (or if not rated by Fitch, then no lower than "A" by S&P or such party’s corpora"A-IX" by A.M. Best) or (B) who are (as evidenced by the receipt of Rating Agency Confirmation) otherwise acceptable to each Rating Agency.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Heller Financial Commercial Mort Asset Corp Series 1999 Ph 2)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Master Servicers, with respect to each of the case Serviced Mortgage Loans, including Specially Serviced Mortgage Loans, and the Special Servicer, with respect to Administered REO Properties, shall use reasonable efforts, consistent with the Servicing Standard, to cause the Mortgagor to maintain, to the extent required by the terms of the related Mortgage Loan documents, or if the Mortgagor does not maintain, shall itself maintain for each Mortgaged Property all insurance coverage as is required under the related Mortgage; provided that if and to the extent that any such Mortgage Loanpermits the holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance coverage that the related Mortgagor is required to maintain, the Master Servicers shall exercise such discretion in a manner consistent with the Servicing Standard; and provided, further that, if and to the extent that a Mortgage so permits, the applicable Master Servicer shall use reasonable efforts consistent with the Servicing Standard (but shall not be required to institute any enforcement proceeding) to cause the related Borrower Mortgagor to maintain obtain the required insurance coverage from Qualified Insurers and required insurance coverage obtained by the Master Servicers shall be from Qualified Insurers. The cost of any such insurance coverage obtained by either Master Servicer or the Special Servicer shall be a Servicing Advance to be paid by the applicable Master Servicer pursuant to Section 3.03. If not required under the terms of the Mortgage or the Mortgage Loan documents, the Special Servicer may require that earthquake insurance be secured for one or more Serviced Mortgaged Properties at the expense of the Trust Fund (including identifying the extent Special Servicer's costs and expenses incurred in obtaining such insurance). Subject to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintainSection 3.17(a), the Master Special Servicer will itself shall also cause to be maintained with Qualified Insurers having for each Administered REO Property no less insurance coverage than was required of the Required Claims-Paying Ratings) for Mortgagor under the related Mortgaged Property Mortgage as of the Closing Date; provided that all such insurance shall be obtained from Qualified Insurers. All such insurance policies maintained by either Master Servicer or the Special Servicer (xi) shall contain (if they insure against loss to property and do not relate to an REO Property) a fire and casualty extended coverage "standard" mortgagee clause, with loss payable to (or naming as an additional insured) the Trustee or the applicable Master Servicer on behalf of the Trustee (and, in the case of a Serviced Loan Combination, the related Non-Trust Noteholder(s)) (in the case of insurance maintained in respect of Mortgage Loans); (ii) shall be in the name of the Special Servicer (in the case of insurance maintained in respect of Administered REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party or with respect to non-payment shall be non-cancelable without the insurer providing 10 days' prior notice; (iv) in the case of a hazard insurance policy, which does not provide for reduction due to depreciation, shall include coverage in an amount that is at least equal to not less than the lesser of (ix) the full replacement cost of the improvements securing such Mortgage Loan and a Serviced Mortgaged Property or Administered REO Property, as applicable, or (iiy) the outstanding principal balance of such owing on the related Serviced Mortgage Loan or Administered REO Loan, butas applicable, and in any event, in an the amount sufficient necessary to avoid the application operation of any co-insurance clause and provisions; (yv) all other insurance coverage shall include a replacement cost endorsement providing no deduction for depreciation (including but unless such endorsement is not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, permitted under the related Mortgage Loan Documentsdocuments); provided (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan documents; (vii) to the extent that the Mortgage or other Mortgage Loan documents specifically require terrorism coverage or the Mortgage requires the related Mortgagor to carry "all of risk" coverage, shall include terrorism coverage, unless the following conditions and/or limitations failure to obtain such terrorism coverage constitutes an Acceptable Insurance Default (upon which determination the applicable Master Servicer may conclusively rely); and (viii) in each case such insurance shall apply:
(A) be issued by an insurer authorized under applicable law to issue such insurance. Notwithstanding the foregoing, the Master Servicers and the Special Servicer shall not be required to maintain obtain, and shall not be in default hereunder for failing to obtain, (A) any insurance coverage that was previously required of the Mortgagor under the related Mortgage if (a) such insurance is not available at any rate; (b) such insurance is not available from a Qualified Insurer (provided that either Master Servicer or the Special Servicer, as applicable, shall obtain such insurance from the next highest rated insurer offering such insurance at commercially reasonable rates); (c) subject to the prior approval of the Controlling Class Representative (which approval is in any such case deemed granted if not denied within 10 Business Days after its receipt of the applicable Master Servicer's or the Special Servicer's request for such approval), such insurance is not available at commercially reasonable rates and, as determined by the applicable Master Servicer or the Special Servicer following due inquiry conducted in a manner consistent with the Servicing Standard, the subject hazards are not commonly insured against by prudent owners of similar real properties in similar locales (but only by reference to such insurance that has been obtained by such owners at the then current market rates); or (d) the Trustee does not have an insurable interest in the related Mortgaged Property or Administered REO Property or (B) any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such the related Mortgage Loan or on the Closing Date pursuant to the terms of the related Mortgage Loan Documents documents and is available at commercially reasonable rates;
(B) if and , which determination shall be subject to the extent that approval of the Controlling Class Representative, such approval to be deemed granted if not rejected within 10 Business Days after its receipt of the applicable Master Servicer's or the Special Servicer's request for such approval and all reasonably requested information. In determining whether any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval insurance coverage is available or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverageavailable at reasonable rates, the applicable Master Servicer shall be entitled to rely, at its own expense, on insurance consultants in making such determination and any such determinations by the applicable Master Servicer must be made not less frequently (to the extent consistent with but need not be made more frequently) than annually (or such other lesser period as may be required by the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required but in any event to maintain or obtain shall be made at the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with approximate date on which the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the applicable Master Servicer on behalf receives notice of the Trusteerenewal, in the case replacement or cancellation of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertycoverage. Any amounts collected by the either Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Serviced Mortgaged Property or Administered REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the applicable Master Servicer's Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Serviced Mortgage LoanLoan (other than a Serviced Loan Combination), or in the related Loan Combination Custodial Account, subject to withdrawal pursuant to Section 3.05(e), in the case of amounts received in respect of a Serviced Loan Combination, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the either Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided. Notwithstanding the foregoing, howeverwith respect to the Serviced Mortgage Loans which either (x) require the Mortgagor to maintain "all risk" property insurance (and do not expressly permit an exclusion for terrorism) or (y) contain provisions generally requiring the applicable Mortgagor to maintain insurance in types and against such risks as the holder of such Serviced Mortgage Loan reasonably requires from time to time in order to protect its interests, that this sentence shall not limit the rights of the applicable Master Servicer or Special Servicer on behalf of will be required to (A) use reasonable efforts to monitor whether the Trust to enforce any obligations of insurance policies for the related Borrower under Mortgaged Property contain Additional Exclusions, (B) request the Mortgagor to either purchase insurance against the risks specified in the Additional Exclusions or provide an explanation as to its reasons for failing to purchase such Mortgage Loan. Costs to the Master Servicer or insurance and (C) notify the Special Servicer of maintaining if any insurance policies policy contains Additional Exclusions or if any Mortgagor fails to purchase the insurance requested to be purchased by such Master Servicer pursuant to this Section 3.07 clause (B) above. If the Special Servicer determines in accordance with the Servicing Standard that such failure is not an Acceptable Insurance Default, the Special Servicer shall (notify the applicable Master Servicer and such Master Servicer shall cause such insurance to be maintained subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toin accordance with the requirements otherwise set forth in the prior paragraph. Furthermore, the Special Servicer shall inform the Rating Agencies as to such conclusions for those Serviced Mortgage Loans that (i) have one of the 10 highest outstanding Stated Principal Balances of all of the Mortgage Loans then included in the Trust Fund or (ii) comprise more than 5% of the outstanding Stated Principal Balance of the Mortgage Loans then included in the Trust Fund (and, if a Serviced Loan Combination satisfies clause (i) and/or clause (ii), the Special Servicer shall also inform the related Non-Trust Noteholder(s) as to such conclusion). During the period that the Special Servicer is evaluating the availability of such insurance, the applicable Master Servicer or Special Servicer, as will not be liable for any loss related to its failure to require the case may be, Mortgagor to maintain such insurance and will not be in default of its obligations as a Servicing Advanceresult of such failure and such Master Servicer will not itself maintain such insurance or cause such insurance to be maintained.
(b) If (i) the either Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties relating to Serviced Mortgage Loans that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the such Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Serviced Mortgaged Properties or and/or Administered REO Properties. In the event that the Special Servicer causes any Administered REO Property to be covered by such blanket policy, the incremental cost of such insurance applicable to such Administered REO Property (other than any minimum or standby premium payable for such policy whether or not any Administered REO Property is covered thereby) shall be paid by the applicable Master Servicer as applicablea Servicing Advance pursuant to Section 3.03. Such a blanket policy or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the applicable Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Serviced Mortgaged Property securing a Mortgage Loan or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the its Collection Account maintained by (or, in the Master Servicercase of a Loan Combination Mortgaged Property or any Loan Combination REO Property, into the related Loan Combination Custodial Account) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket policy or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any the amount of such deductible exceeds the deductible limitation that pertained to permitted under the related Mortgage Loan documents (oror if the related Mortgage Loan documents are silent regarding a permitted deductible, in the absence of any such a deductible limitation, the deductible limitation for an individual policy which that is consistent with the Servicing Standard). The applicable Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholdersthe Certificateholders (and, in the case of a Serviced Loan Combination, the related Non-Trust Noteholder(s)), claims under any such blanket policy or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer Servicers and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or Administered REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be commercially reasonable in such form the mortgage servicing industry and in an amount not less than the greater of (X) $20,000,000 and (Y) an amount (determined by reference to the size of its servicing portfolio of commercial mortgage loans) as are consistent with would either permit it to be a qualified FNMA or FHLMC (whichever is greater) seller-servicer of multifamily mortgage loans. Each of the Servicing Standard. The Master Servicer or Servicers and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms of such fidelity bond, the coverage afforded thereunder extends to the subject Master Servicer or the Special Servicer, as the case may be. Such fidelity bond Each of the Master Servicers and the Special Servicer shall provide that it may at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or Administered REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be commercially reasonable in the mortgage servicing industry and in an amount not be canceled without ten less than the greater of (10X) days’ prior written notice $20,000,000 and (Y) an amount (determined by reference to the Trusteesize of its servicing portfolio of commercial mortgage loans) as would either permit it to be a qualified FNMA or FHLMC (whichever is greater) seller-servicer of multifamily mortgage loans. So Each of the Master Servicers and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the subject Master Servicer or the Special Servicer, as the case may be. For so long as the long-term unsecured debt obligations of the either Master Servicer or the Special Servicer (or in the case of each initial Master Servicer and Special Servicer, their respective direct parent) are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in an Adverse Rating Event, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this Section 3.07.
(d) Within 90 days of the Closing Date, with respect to each of the Serviced Mortgage Loans
Appears in 1 contract
Sources: Pooling and Servicing Agreement (ML-CFC Commercial Mortgage Trust 2007-8)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts (with respect to Mortgage Loans and Companion Loans to the extent that the Trust Fund has an insurable interest) and the Special Servicer (with respect to REO Properties to the extent that the Trust Fund has an insurable interest) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, howeverfurther, if and to the extent that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisora Mortgage so permits, the Special Servicer will not related Mortgagor shall be required to do so. If any such approval of exercise its reasonable best efforts to obtain the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt required insurance coverage from the Master Servicer of the Master Servicer’s determination Qualified Insurers and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation required insurance coverage obtained by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurancefrom Qualified Insurers. The cost of any such insurance coverage obtained by either the Master Servicer shall notify or the Special ServicerServicer shall be a Servicing Advance to be paid by the Master Servicer pursuant to Section 3.03. Whether or not the applicable Mortgage Loan documents require such insurance, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if may request that earthquake insurance be secured for one or more Mortgaged Properties at the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest expense of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyMajority Subordinate Certificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, also cause to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan DocumentsMortgage; provided, however, provided that the Special Servicer all such insurance shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardobtained from Qualified Insurers. All such insurance policies maintained as described above by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “standard” mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, or Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days’ prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan document; and (vii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan or Companion Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loans so permit; provided, however, that this sentence shall not limit . Notwithstanding the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toforegoing, the Master Servicer or Special Servicer, as applicable, will not be required to maintain (and in the case may beof the Special Servicer, with respect to any Specially Serviced Mortgage Loan), and shall not cause a Mortgagor to be in default with respect to the failure of the related Mortgagor to obtain, all-risk casualty insurance which does not contain any carve-out for terrorist or similar acts or windstorm coverage, if and only if the Master Servicer with respect to non-Specially Serviced Mortgage Loans or the Special Servicer with respect to Specially Serviced Mortgage Loans, in consultation with the Controlling Class Representative, and, with respect to each Co-Lender Loan, in consultation with the related Companion Holder if required under the applicable Intercreditor Agreement, has determined in accordance with the Servicing Standard that either (a) such insurance is not available at any rate or (b) such insurance is not available at commercially reasonably rates (which determination as to whether such insurance is available at commercially reasonable rates shall be made subject to consultation with the Special Servicer in consultation with and subject to the approval of the Controlling Class Representative with respect to all Mortgage Loans) and that such hazards are not at the time commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which such Mortgaged Property is located and the Controlling Class Representative has approved the decision not to require the Mortgagor to maintain terrorism insurance or windstorm coverage (provided that the decision of the Controlling Class Representative to grant or withhold such consent shall be disregarded by the Special Servicer if such consent or lack of consent would cause the Master Servicer or the Special Servicer, as applicable, to violate the Servicing Standard); provided, however, the Controlling Class Representative’s approval shall be deemed to have been given if it has not responded within 5 Business Days of receipt of the Master Servicer’s or the Special Servicer’s written recommendation and the information upon which such recommendation is based; provided, further, upon the Master Servicer’s or the Special Servicer’s determination, as applicable, consistent with the Servicing Standard, that exigent circumstances do not allow the Master Servicer or the Special Servicer to consult with the Controlling Class Representative or Companion Holder, if applicable, the Master Servicer or the Special Servicer, as applicable, shall not be required to do so; provided, further, during the period that the Special Servicer or Controlling Class Representative is evaluating such insurance hereunder, the Master Servicer shall not be liable for any loss related to its failure to require the Mortgagor to maintain terrorism insurance or windstorm coverage and shall not be in default of its obligations hereunder as a Servicing Advanceresult of such failure. The Special Servicer shall promptly notify the Master Servicer of each determination under this paragraph.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans, Companion Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without for ten (10) days’ prior written notice to the TrusteeTrustee prior to any cancellation. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification, downgrade or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten days’ written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct or indirect parent), are rated at least “A” or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Wachovia Bank Commercial Mortgage Trust Series 2007-C34)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the Master The Servicer shall use its reasonable best efforts consistent with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to by the terms of the related Mortgage Note, or if the Mortgagor does not so maintain, shall itself maintain, for each Mortgage Loan Documents all Insurance Policy coverage as is required under the related Mortgage (to the extent that the Trustee has an insurable interest and such Insurance Policy coverage is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) aboveStandards). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon if any Mortgage permits the Special Servicer’s determinationholder thereof to dictate to the Mortgagor the Insurance Policy coverage to be maintained on such Mortgaged Property, the Servicer shall impose such insurance requirements as are consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyStandards. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with maintain for each REO Property no less Insurance Policy coverage than was previously required of the Servicing Standard, to maintain with Qualified Insurers having Mortgagor under the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of related Mortgage Loan. All such Insurance Policies shall (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) contain a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage LoanLoans other than REO Properties), or shall (ii) be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, (iii) include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing Mortgaged Property or the REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions, (iv) include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents), (v) be noncancellable without 30 days' prior written notice to the insured party and (vi) be issued by a Qualified Insurer authorized under applicable law to issue such Insurance Policies. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies Insurance Policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing StandardStandards and the provisions of the related Mortgage Loan) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Ge Commercial Mortgage Corp)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Master Servicer, with respect to each of the case of each Mortgage LoanLoans, including Specially Serviced Mortgage Loans, and the Master Servicer Special Servicer, with respect to REO Properties, shall use reasonable efforts efforts, consistent with the Servicing Standard Standard, to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to by the terms of the related Mortgage Loan Documents and documents, or if the Mortgagor does not maintain, shall itself maintain for each Mortgaged Property all insurance coverage as is available at commercially reasonable rates;
(B) required under the related Mortgage; provided that if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not exercise such discretion in a manner consistent with the Servicing Standard and subject to the terms of this Section 3.07; and provided, further that, if and to the extent that a Mortgage so permits, the related Mortgagor shall be required to maintain insurance other than what is available exercise its reasonable efforts to obtain the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty required insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific from Qualified Insurers and required insurance coverage with respect to damages or casualties caused obtained by terrorist or similar acts, the Master Servicer shall be from Qualified Insurers. The cost of any such insurance coverage obtained by either the Master Servicer or the Special Servicer shall be a Servicing Advance to be paid by the Master Servicer pursuant to Section 3.03. If not required under the terms of the Mortgage or the Mortgage Loan documents, the Special Servicer may require that earthquake insurance be secured for one or more Mortgaged Properties at the expense of the Trust Fund (including the Special Servicer's costs and expenses incurred in obtaining such insurance). Subject to Section 3.17(a), the Special Servicer shall also cause to be maintained for each REO Property no less insurance coverage than was required of the Mortgagor under the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place Mortgage as of the Closing Date; provided that all such insurance shall be obtained from Qualified Insurers. All such insurance policies maintained by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to property and do not relate to an REO Property) a "standard" mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee (and, in the case of a Loan Combination, the related Non-Trust Noteholder(s)) (in the case of insurance maintained in respect of Mortgage Loans); (ii) shall be in the name of the Special Servicer (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan documents; (vii) to the extent that the Mortgage or other Mortgage Loan documents specifically require terrorism coverage or the Mortgage requires the related Mortgagor to carry "all risk" coverage, shall include terrorism coverage, unless the failure to obtain such terrorism coverage constitutes an Acceptable Insurance Default; and (viii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Notwithstanding the foregoing, the Master Servicer or the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standardshall not be required to obtain, and (during shall not be in default hereunder for failing to obtain, any Subordinate Control Period) with the consent insurance coverage that was previously required of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with Mortgagor under the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either related Mortgage if (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or any rate; (b) such insurance is not available at any rate from a Qualified Insurer (failure to maintain required insurance due to either of clause (a) provided that the Master Servicer or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisorthe Special Servicer, as applicable, will have no more than thirty shall obtain such insurance from the next highest rated insurer offering such insurance at commercially reasonable rates); (30c) days subject to respond to the prior approval of the Controlling Class Representative (which approval is deemed granted if not denied within 10 Business Days after its receipt of the Master Servicer's or the Special Servicer’s 's request for such consent approval), such insurance is not available at commercially reasonable rates and, as determined by the Master Servicer or consultation; provided, however, that upon the Special Servicer’s determination, Servicer following due inquiry conducted in a manner consistent with the Servicing Standard, the subject hazards are not commonly insured against by prudent owners of similar real properties in similar locales (but only by reference to such insurance that exigent circumstances do not allow has been obtained by such owners at the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety then current market rates); or (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance underd) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the Trustee does not have an insurable interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage LoanLoan (other than a Loan Combination), or in the related Loan Combination Custodial Account, subject to withdrawal pursuant to Section 3.05(e), in the case of amounts received in respect of a Loan Combination, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided. Notwithstanding the foregoing, however, that this sentence shall with respect to the Mortgage Loans which either (x) require the Mortgagor to maintain "all risk" property insurance (and do not limit expressly permit an exclusion for terrorism) or (y) contain provisions generally requiring the rights applicable Mortgagor to maintain insurance in types and against such risks as the holder of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs Loan reasonably requires from time to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant time in order to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toprotect its interests, the Master Servicer will be required to (A) use reasonable efforts to monitor whether the insurance policies for the related Mortgaged Property contain Additional Exclusions, (B) request the Mortgagor to either purchase insurance against the risks specified in the Additional Exclusions or provide an explanation as to its reasons for failing to purchase such insurance and (C) notify the Special ServicerServicer if any insurance policy contains Additional Exclusions or if any Mortgagor fails to purchase the insurance requested to be purchased by the Master Servicer pursuant to clause (B) above. If the Special Servicer determines in accordance with the Servicing Standard that such failure is not an Acceptable Insurance Default, the Special Servicer shall notify the Master Servicer and the Master Servicer shall cause such insurance to be maintained. Furthermore, the Special Servicer shall inform the Rating Agencies as to such conclusions for those Mortgage Loans that (i) have one of the case may be10 highest outstanding Stated Principal Balances of all of the Mortgage Loans then included in the Trust Fund or (ii) comprise more than 5% of the outstanding Stated Principal Balance of the Mortgage Loans then included in the Trust Fund (and, if a Loan Combination satisfies clause (i) and/or clause (ii), the Special Servicer shall also inform the related Non-Trust Noteholder(s) as to such conclusion). During the period that the Special Servicer is evaluating the availability of such insurance, the Master Servicer will not be liable for any loss related to its failure to require the Mortgagor to maintain such insurance and will not be in default of its obligations as a Servicing Advanceresult of such failure and the Master Servicer will not itself maintain such insurance or cause such insurance to be maintained.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties. In the event that the Special Servicer causes any REO Property to be covered by such blanket policy, the incremental cost of such insurance applicable to such REO Property (other than any minimum or standby premium payable for such policy whether or not any REO Property is covered thereby) shall be paid by the Master Servicer as applicablea Servicing Advance pursuant to Section 3.03. Such a blanket policy or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by (or, in the Master Servicercase of a Loan Combination Mortgaged Property or any Loan Combination REO Property, into the related Loan Combination Custodial Account) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket policy or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any the amount of such deductible exceeds the deductible limitation that pertained to permitted under the related Mortgage Loan documents (oror if the related Mortgage Loan documents are silent regarding a permitted deductible, in the absence of any such a deductible limitation, the deductible limitation for an individual policy which that is consistent with the Servicing Standard). The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholdersthe Certificateholders (and, in the case of a Loan Combination, the related Non-Trust Noteholder(s)), claims under any such blanket policy or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause an Adverse Rating Event (as evidenced in writing from each Rating Agency). Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not result in an Adverse Rating Event (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without ten (10) for 10 days’ prior ' written notice to the TrusteeTrustee prior to cancellation. So The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in an Adverse Rating Event, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this Section 3.07.
(d) Within 90 days of the Closing Date, with respect to each of the Mortgage Loans identified on Schedule II as being covered by an environmental insurance policy, the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) shall notify the insurer under such environmental insurance policy and take all other action necessary for the Trustee, on behalf of the Certificateholders (and in the case of a Loan Combination, the related Non-Trust Noteholder(s)), to be an insured (and for the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan), on behalf of the Trust Fund (and in the case of a Loan Combination, the related Non-Trust Noteholder(s)), to make claims) under such environmental insurance policy. In the event that the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) has actual knowledge of any event (an "Insured Environmental Event") giving rise to a claim under any environmental insurance policy in respect of any Mortgage Loan covered thereby, the Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) shall, in accordance with the terms of such environmental insurance policy and the Servicing Standard, timely make a claim thereunder with the appropriate insurer and shall take such other actions in accordance with the Servicing Standard which are necessary under such environmental insurance policy in order to realize the full value thereof for the benefit of the Certificateholders (and in the case of a Loan Combination, the related Non-Trust Noteholder(s)). Any legal fees, premiums or other out-of-pocket costs incurred in connection with any such claim under an environmental insurance policy shall be paid by the Master Servicer and shall be reimbursable to it as a Servicing Advance. With respect to each environmental insurance policy that relates to one or more Mortgage Loans, the Master Servicer shall review and familiarize itself with the terms and conditions relating to enforcement of claims and shall monitor the dates by which any claim must be made or any action must be taken under such policy t
Appears in 1 contract
Sources: Pooling and Servicing Agreement (MLCFC Commercial Mortgage Trust Series 2006-1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Loan (other than the Fashion Show Mall Mortgage Loan), the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower each Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage maintain, and, if such Borrower the Mortgagor does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) maintained, for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due including each Mortgaged Property relating to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage any Specially Serviced Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably requirerequired, subject to applicable law, under the related Mortgage Loan Documentsdocuments; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any Mortgage such Loan grants documents permit the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Mortgagor is required to obtain the requisite insurance coveragemaintain, the Master Servicer shall (exercise such discretion in a manner consistent with the Servicing Standard and, prior to the date such existing insurance expires or is required to be renewed, the Master Servicer may, to the extent consistent with the Servicing Standard, take into account insurance in place at loan origination, with a view towards requiring insurance comparable to that required under other Loans with express provisions governing such matters and including business interruption or rental loss insurance for at least 12 months; and provided, further, that the Master Servicer shall be required to maintain such insurance coverage upon the related Mortgagor's failure to do so only to the extent that such insurance is available at commercially reasonable rates and the Trustee, on behalf of the Trust, as mortgagee has an insurable interest. Subject to Section 3.17(b), the Special Servicer shall also cause to be maintained for each REO Property no less insurance coverage (to the extent available at commercially reasonable rates) use efforts (A) than was previously required of the related Mortgagor under the related Loan documents and (B), at a minimum, (i) hazard insurance with a replacement cost rider, (ii) business interruption or rental loss insurance for at least 12 months, and (iii) commercial general liability insurance, in each case, in an amount customary for the type and geographic location of such REO Property and consistent with the Servicing Standard Standard; provided that all such insurance required to cause the related Borrower to obtain the requisite insurance coverage be maintained by Master Servicer or Special Servicer shall be obtained from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have a financial strength or claims-paying rating no obligation beyond using its reasonable efforts consistent with lower than two rating categories below the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standardhighest rated Certificates outstanding, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain no lower than "A2" from Moody's and "A" from S&P (or obtain in such other form and amount or issued by ▇▇ ▇▇▇urer with such other financial strength or claims-paying ability as would not, as confirmed in writing by the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardrelevant Rating Agency, result in an Adverse Rating Event. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a the Mortgage LoanLoans), or shall name the Trustee (and in the case of a Whole Loan the related Companion Loan Noteholder(s)) as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (and in the case of a Whole Loan the related Companion Loan Noteholder(s)) (in the case of insurance maintained in respect of REO Properties), and shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in into the Collection Certificate Account in accordance with Section 3.04or, if a Whole Loan is involved, the related Whole Loan Custodial Account, subject to withdrawal pursuant to Section 3.053.05(a), or Section 3.05(f), as applicable in the case of amounts received in respect of a Mortgage Loan, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust or, if a Whole Loan is involved, on behalf of the related Companion Loan Noteholders, to enforce any obligations of the related Borrower Mortgagor under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, by and reimbursable to, to the Master Servicer or the Special Servicer, as the case may be, as a Servicing Advance. If the related Loan documents specifically and expressly set forth terms requiring insurance coverage against terrorist or similar acts for a Loan, then the Master Servicer and the Special Servicer shall enforce the terms of the related Loan documents in accordance with the Servicing Standard, and if the Mortgagor fails to maintain such insurance, such failure shall constitute a Servicing Transfer Event. To the extent the Loan documents do not set forth specific terms requiring insurance coverage against terrorist or similar acts and a Loan (x) requires a Mortgagor to maintain insurance policies covering some or all of the risks contained in the Additional Exclusions or (y) in accordance with the Servicing Standard, the Master Servicer has determined that the Loan documents permit the lender to require the Mortgagor to maintain insurance policies covering some or all the risks contained in the Additional Exclusions (the covered risks required to be covered or that the lender has the discretion to require to be covered being referred to as "Covered Risks"), the Master Servicer shall use reasonable efforts in accordance with the Servicing Standard to determine whether, upon renewal of the Mortgagor's property or casualty insurance (including any all risk insurance policy), any of the Covered Risks are excluded from coverage. If any of the Covered Risks are determined by the Master Servicer to be excluded from coverage, the Master Servicer shall request the Mortgagor to either (i) purchase insurance acceptable to the Master Servicer in accordance with the Servicing Standard and in accordance with the related Loan documents covering such Covered Risks or (ii) provide a written explanation as to its reasons for failing to purchase such insurance. Notwithstanding the foregoing, with the written consent of the Special Servicer in accordance with the Servicing Standard the Master Servicer may waive the requirement to procure insurance covering any of the Covered Risks if the Master Servicer determines in accordance with the Servicing Standard that (1) insurance covering any such Covered Risks is not available at a commercially reasonable price, or (2) based on information reasonably available to the Master Servicer, after due inquiry, any such Covered Risks are at that time not commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which the Mortgaged Property is located unless the Stated Principal Balance of the Loan is greater than $20,000,000. If the Stated Principal Balance of the Loan is greater than $20,000,000, then the Master Servicer must determine that the circumstances in both clauses (1) and (2) of the immediately preceding sentence apply prior to waiving the Mortgagor's requirement to procure insurance with respect to any Covered Risks. If the Special Servicer fails to give a response to the Master Servicer as referenced in the second preceding sentence within ten Business Days of the Master Servicer initially notifying the Special Servicer in writing of such request, the Master Servicer shall promptly notify the Directing Certificateholder of such failure of the Special Servicer to respond to such request. If the Directing Certificateholder and/or the Special Servicer have not responded to the Master Servicer within ten Business Days of the notice referenced in the immediately preceding sentence, the Master Servicer shall determine in accordance with the Servicing Standard whether to require (or not require) the Mortgagor to maintain such insurance; provided, that during the period that the Special Servicer and/or the Directing Certificateholder are evaluating such insurance, none of the Master Servicer, the Special Servicer and/or the Directing Certificateholder shall be liable for any loss related to its failure to require a Mortgagor to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure. If the Master Servicer requires the Mortgagor to maintain such insurance and the Mortgagor fails to maintain such insurance, to the extent such insurance is then reasonably available, the Master Servicer shall then procure such insurance in accordance with the Servicing Standard and such failure by the Mortgagor shall constitute a Servicing Transfer Event. For purposes of computing whether the $20,000,000 threshold described herein is met for a particular Loan, if a Loan is secured by multiple Mortgaged Properties, then the amount subject to the $20,000,000 threshold shall be the portion of the Stated Principal Balance of the related Loan pro rated based on an individual Mortgaged Property's appraised value as a percentage of the total appraised value of all of the related Mortgaged Properties.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-force placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, that it is required to service and administer hereunder, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having a financial strength or claims-paying rating no lower than "A2" from Moody's and "A" from S&P or having such other financial strength or cla▇▇▇-▇▇▇ing ability rating as would not, as confirmed in writing by the Required Claims-Paying Ratingsrelevant Rating Agency, result in an Adverse Rating Event and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-force placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which that is consistent with the Servicing Standard). The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholdersthe Certificateholders and, in the case of a Whole Loan, the related Companion Loan Noteholders, claims under any such blanket or master force-forced placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or or REO Properties for which it is responsible exist as part of the Trust Fund) keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the Required Claims-Paying Ratingshighest rated Certificates outstanding, and in any event no lower than "A2" from Moody's and "A" from S&P, a fidelity bond in such form and amount as are consistent wo▇▇▇ ▇▇▇mit it to be a qualified Fannie Mae seller-servicer of multifamily mortgage loans (or in such ot▇▇▇ ▇▇r▇ ▇nd amount or issued by an insurer with such other financial strength or claims-paying ability rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Servicing StandardTrustee by the relevant Rating Agency)). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten days' prior written notice to the Trustee. Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (10or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Loans and/or REO Properties for which it is responsible exist as part of the Trust Fund) also keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than "A2" from Moody's and "A" from S&P, a policy or policies of insurance covering lo▇▇ ▇▇▇▇sioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified Fannie Mae seller-servicer of multifamily mortgage loans (or in such ot▇▇▇ ▇▇r▇ ▇nd amount or issued by an insurer with such other financial strength or claims-paying rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Trustee by the relevant Rating Agency)). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without ten days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or the Special Servicer (or its direct or indirect parent company), as applicable, are rated not lower than "A2" from Moody's and "A" from S&P, the Master Servicer or Special Servicer, as a▇▇▇▇▇▇▇le, may self-insure with respect to either or both of the fidelity bond coverage and the errors and omissions coverage required as described above, in which case it shall not be required to maintain an insurance policy with respect to such party’s corporacoverage.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Banc of America Commercial Mortgage Inc., Series 2005-2)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts to cause each Mortgagor to maintain in respect of the related Mortgaged Property all insurance coverage (other than earthquake insurance) as is required under the related Mortgage; provided that if any Mortgage permits the holder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Master Servicer, or the Special Servicer in the case of Specially Serviced Mortgage Loans, shall impose such insurance requirements as are consistent with the Servicing Standard to cause the related Borrower Standard. If a Mortgagor fails to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintaininsurance, the Master Servicer will itself cause to be maintained with Qualified Insurers having or the Required Claims-Paying Ratings) for Special Servicer in the related Mortgaged Property case of Specially Serviced Mortgage Loans, shall (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is extent available at commercially reasonable rates;
) obtain such insurance (Bwhich may be through a master or single interest policy), and the cost (including any deductible relating to such insurance) of such insurance (or in the case of a master or single interest policy, the incremental cost (including any deductible relating to such insurance) of such insurance relating to the specific Mortgaged Property), shall be a Servicing Advance (subject to the limitations set forth in Section 4.2(a)) recoverable by the Master Servicer, or the Special Servicer in the case of Specially Serviced Mortgage Loans, pursuant to Section 5.2. If at any time a Mortgaged Property is located in an area identified in the Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Federal Emergency Management Agency as having special flood hazards or it becomes located in such area by virtue of remapping conducted by such agency (and flood insurance has been made available), then upon the Master Servicer or the Special Servicer becoming aware of such fact (using efforts consistent with the Servicing Standard), the Master Servicer, or the Special Servicer in the case of Specially Serviced Mortgage Loans, shall, if and to the extent that any the Mortgage Loan grants requires the lender thereunder any discretion (by way of consentMortgagor or permits the Mortgagee to require the Mortgagor to do so, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower Mortgagor to maintain a flood insurance policy meeting the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts requirements of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as current guidelines of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Federal Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, Administration in an amount that is at representing coverage of not less than the least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that (ii) the terms full insurable value of such Mortgage Loan so permit; providedMortgaged Property, however(iii) the maximum amount of insurance coverage available under the National Flood Insurance Act of 1968, that this sentence shall not limit the rights Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as amended, and (iv) 100% of the Master Servicer or Special Servicer on behalf replacement cost of the Trust to enforce any obligations of the related Borrower under improvements on such Mortgage LoanMortgaged Property. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or Mortgagor is required by the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all terms of the Mortgage Loans Loan to maintain such insurance (or REO Properties, as applicable, then, to becomes obligated by virtue of the extent related Mortgaged Property becoming located in such policy (Aarea by virtue of such remapping) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and terms of the Master Servicer or Mortgage Loan permit the Special Servicer, as mortgagee to require the case may be, self-insures for its obligation Mortgagor to maintain the individual policies otherwise requiredobtain such insurance, the Master Servicer shall promptly notify the Mortgagor of its obligation to obtain such insurance. If the Mortgagor fails to obtain such flood insurance within 120 days of such notification, the Master Servicer, or the Special Servicer, as Servicer in the case may beof Specially Serviced Mortgage Loans, shall conclusively be deemed obtain such insurance (to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(aextent available at commercially reasonable rates), and there the cost of such insurance shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained be a Servicing Advance recoverable by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying RatingsLoans, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed pursuant to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaSection 5.2.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Morgan Stanley Capital I Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Serviced Mortgage LoanLoan or Serviced Loan Combination, the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Serviced Mortgage Loan and or Serviced Loan Combination or (ii) the outstanding principal balance of such Serviced Mortgage LoanLoan or Serviced Loan Combination, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or (subject to the Servicing Standard) that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Serviced Mortgage Loan or Serviced Loan Combination unless such insurance policy was in effect at the time of the origination of such Serviced Mortgage Loan or Serviced Loan Combination pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable ratesrates and the Trustee has an insurable interest;
(B) if and to the extent that any Serviced Mortgage Loan or Serviced Loan Combination grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Serviced Mortgage Loan to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower under any Serviced Mortgage Loan to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower under any Serviced Mortgage Loan to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower under any Serviced Mortgage Loan does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower under any Serviced Mortgage Loan fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, provided that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder and (if a Serviced Loan Combination is involved) the related Serviced Pari Passu Companion Loan Holder(s) if the Master Servicer determines that any Borrower under a Serviced Mortgage Loan or Serviced Loan Combination has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan or Loan Combination and/or the interest of the Trust or the Serviced Pari Passu Companion Loan Holder in the related Mortgaged Property or if any Borrower under a Serviced Mortgage Loan has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan or Loan Combination and/or the interest of the Trust or the Serviced Pari Passu Companion Loan Holder in the related Mortgaged Property. .
(b) Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each Administered REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such Administered REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million 1,000,000 per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months (or at least eighteen (18) months, in the case of an Administered REO Property whose related REO Mortgage Loan had an initial principal balance exceeding $35,000,000), in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, provided that both of the following conditions and/or limitations shall apply:
(A) the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what above unless the Trustee has an insurable interest; and
(B) the Special Servicer shall not be required to maintain or obtain the insurance coverage otherwise described above to the extent that the coverage is not available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer (or the applicable sub-servicer) on behalf of the Trustee, in the case of insurance maintained in respect of a Serviced Mortgage LoanLoan or Serviced Loan Combination, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an Administered REO Property. 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account or, to the extent the loss affects a Serviced Pari Passu Companion Loan Holder, in the Serviced Pari Passu Companion Loan Custodial Account, as applicable, in each case as appropriate in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Serviced Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage LoanLoan or Serviced Loan Combination, notwithstanding that the terms of such Serviced Mortgage Loan or Serviced Loan Combination so permit; provided, however, provided that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust (and, if applicable, any related Serviced Pari Passu Companion Loan Holders) to enforce any obligations of the related Borrower under such Serviced Mortgage LoanLoan or Serviced Loan Combination. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bc) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the any Serviced Mortgage Loans Loans, Serviced Loan Combinations or Administered REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2A (low)” by DBRS (or, if not rated by DBRS, an equivalent rating by (A) at least two NRSROs (which may include KBRA and/or M▇▇▇▇’▇) or (B) one NRSRO (which may include KBRA and/or M▇▇▇▇’▇) and A.M. Best Company), “A3” by M▇▇▇▇’▇ and (or, if not rated by M▇▇▇▇’▇, at least “AA-” by Fitch S&P (or, if not rated by S&P, an equivalent rating by (A) at least two NRSROs (which may include KBRA and/or DBRS) or (B) one NRSRO (which may include KBRA and/or DBRS) and A.M. Best Company)) and an equivalent rating by KBRA (if then rated by KBRA), or it has received a Rating Agency Confirmation from each Rating Agency with respect to which such rating is not satisfied, and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Serviced Mortgage Loan, Serviced Loan Combination or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account (or, to the extent the loss affects any Serviced Pari Passu Companion Loan Holder(s), in the Serviced Pari Passu Companion Loan Custodial Account, as applicable) maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Serviced Mortgage Loan or Serviced Loan Combination (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and CertificateholdersCertificateholders and, if applicable, any related Serviced Pari Passu Companion Loan Holders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cd) With respect to each Performing Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaact
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Wells Fargo Commercial Mortgage Trust 2015-C27)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Performing Serviced Mortgage Loan, the applicable Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the such Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and or (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the applicable Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Performing Serviced Mortgage Loan unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates (and if the applicable Master Servicer does not cause the Borrower to maintain or does not itself maintain such earthquake or environmental insurance policy on any Mortgaged Property, the applicable Special Servicer shall have the right, but not the duty, to obtain, at the Trust's expense, earthquake or environmental insurance on any Mortgaged Property securing a Specially Serviced Mortgage Loan or on an Administered REO Property so long as such insurance is available at commercially reasonable rates);
(B) if and to the extent that any Performing Serviced Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the applicable Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause require the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the applicable Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Performing Serviced Mortgage Loan to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the applicable Master Servicer be required to cause the Borrower under any Performing Serviced Mortgage Loan to maintain, or itself obtain, insurance coverage that the applicable Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property mortgaged property and located in or around the region in which the related Mortgaged Property is locatedlocated (in each case, as determined by the applicable Master Servicer, which shall be entitled to rely, at its own expense, on insurance consultants in making such determination) (and provided that any such determinations by the applicable Master Servicer must be made not less frequently (but need not be made more frequently) than annually but in any event shall be made at the approximate date on which the applicable Master Servicer receives notice of the renewal, replacement or cancellation of coverage);
(E) the reasonable efforts of the applicable Master Servicer to cause the Borrower under any Performing Serviced Mortgage Loan to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the applicable Master Servicer on a force-placed basis; and
(F) to the extent the applicable Master Servicer itself is required to maintain insurance that the Borrower under any Performing Serviced Mortgage Loan does not maintain, the applicable Master Servicer shall not be required to maintain insurance other than what is available to the such Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails applicable Master Servicer shall, prior to maintain availing itself of any limitation described in that clause with respect to any Performing Serviced Mortgage Loan that has a Stated Principal Balance in excess of $2,500,000, obtain the related Mortgaged Property approval or disapproval of the applicable Special Servicer (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically excludeand, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar actsin connection therewith, the applicable Special Servicer shall be required to comply with any applicable provisions of Section 3.24 or Section 3.25). The applicable Master Servicer shall cause be entitled to rely on the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as determination of the Closing Date, unless the applicable Special Servicer has determined made in its reasonable judgment based on inquiry consistent connection with such approval or disapproval. The applicable Special Servicer shall decide whether to withhold or grant such approval in accordance with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety seven Business Days (90) days or, in the case of the Shell Plaza Loan Group, such longer period of time, if any, that is provided in Section 3.25(a)) of the applicable Special Servicer’s 's receipt from the applicable Master Servicer of the such Master Servicer’s 's determination and analysis and all information reasonably requested thereby and reasonably available to the applicable Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The applicable Master Servicer shall notify the applicable Special Servicer, the Trustee, the Subordinate Controlling Class Representative and (if a Serviced Mortgage Loan Group is involved) the Majority Subordinate Certificateholder related Serviced Non-Pooled Mortgage Loan Noteholder, if the applicable Master Servicer determines that the Borrower under any Borrower Performing Serviced Mortgage Loan has failed to maintain insurance required under (or that the such Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if the Borrower under any Borrower Performing Serviced Mortgage Loan has notified the applicable Master Servicer in writing that such the Borrower does not intend to maintain such insurance and the applicable Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings .
(a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan or at such REO Property or (ii) the outstanding principal balance of such Mortgage Loan or the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months or, with respect to Mortgage Loans with initial principal balances greater than $35 million, at least eighteen (18) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that neither the applicable Master Servicer nor the applicable Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the applicable Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Serviced Mortgage Loan), or shall name the Trustee as the insured, with loss payable to the applicable Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of an Administered REO Property). Any amounts collected by the a Master Servicer or the a Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account of the applicable Master Servicer, a related Companion Note Custodial Account and/or the Shell Plaza Subordinate Note Custodial Account, as appropriate in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Serviced Mortgage Loan, or in the REO Account of the applicable Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the a Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the a Master Servicer or Special Servicer on behalf of the Trust (and, if applicable, the Serviced Non-Pooled Mortgage Loan Noteholders) to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the a Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, by and reimbursable to, the to such Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the a Master Servicer or the a Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Serviced Mortgage Loans or Administered REO Properties, as applicable, as to which it is the applicable Master Servicer or the applicable Special Servicer, as the case may be, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the a Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “"A2” " by ▇▇▇▇▇’'▇ and “"A” " by Fitch and the such Master Servicer or the such Special Servicer, as the case may be, self-insures for its obligation to maintain maintain, and deposits into its Collection Account (any such deposit to be deemed to constitute "Insurance Proceeds") the amount of any loss to the Trust that would have been covered by, the individual policies otherwise required, the such Master Servicer or the such Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the applicable Master Servicer or the applicable Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Serviced Mortgage Loan or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the applicable Collection Account (or, to the extent the loss affects a related Serviced Non-Pooled Mortgage Loan Noteholder, in the related Companion Note Custodial Account or the Shell Plaza Subordinate Note Custodial Account, as applicable) maintained by the applicable Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Serviced Mortgage Loan (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer Servicers and the Special Servicer Servicers shall each prepare and present, on behalf of itself, the Trustee and CertificateholdersCertificateholders and, if applicable, the Serviced Non-Pooled Mortgage Loan Noteholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2004-Pwr4)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the Master The Servicer shall use its reasonable efforts consistent with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to by the terms of the related Mortgage Note, or if the Mortgagor does not so maintain, shall itself maintain, for each Mortgage Loan Documents and all insurance coverage as is available at commercially reasonable rates;
(B) if and required under the related Mortgage, except to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way failure of consent, approval or otherwise) as to the insurance provider from whom the related Borrower Mortgagor to do so is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon if any Mortgage permits the Special Servicer’s determinationholder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Servicer shall impose such insurance requirements as are consistent with the Servicing StandardStandards, provided that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed obligated to maintain insurance required under (against property damage resulting from terrorist or that similar acts unless the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such Mortgagor's failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Propertyis an Acceptable Insurance Default. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that Loan. All Insurance Policies maintained by the Servicer or the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall (i) contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage LoanLoans other than REO Properties), or shall (ii) be in the name of the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), (iii) include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing Mortgaged Property or the REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions, (iv) include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents), (v) be noncancellable without 30 days prior written notice to the insured party (except in the case of nonpayment, in which case such policy shall not be cancelled without 10 days prior notice) and (vi) be issued by a Qualified Insurer authorized under applicable law to issue such Insurance Policies. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies Insurance Policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing StandardStandards and the provisions of the related Mortgage Loan) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c3.05(a), in the case of amounts received in respect of an REO Property. Any cost costs incurred by the Master Servicer or Special Servicer in maintaining any such insurance Insurance Policies in respect of Mortgage Loans (other than REO Properties)
(i) if the Mortgagor defaults on its obligation to do so, shall be advanced by the Servicer as a Servicing Advance and will be charged to the related Mortgagor and (ii) shall not, for purposes hereof, including of calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loan so permit; provided, however, that this sentence shall not limit . Any cost incurred by the rights of the Master Servicer or Special Servicer on behalf in maintaining any such Insurance Policies with respect to REO Properties shall be an expense of the Trust to enforce any obligations payable out of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies REO Account pursuant to this Section 3.07 shall (subject to Section 3.11(h3.16(c) and Section 3.19(b)) be paid byor, and reimbursable toif the amount on deposit therein is insufficient therefor, advanced by the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance. Notwithstanding the foregoing, with respect to the Mortgage Loans which either (x) require the Mortgagor to maintain "all risk" property insurance (and do not expressly permit an exclusion for terrorism) or (y) contain provisions generally requiring the applicable Mortgagor to maintain insurance in types and against such risks as the holder of such Mortgage Loan reasonably requires from time to time in order to protect its interests, the Servicer will be required to (A) actively monitor whether the insurance policies for the related Mortgaged Property contain Additional Exclusions, (B) request the Mortgagor to either purchase insurance against the risks specified in the Additional Exclusions or provide an explanation as to its reasons for failing to purchase such insurance and (C) notify the Special Servicer if any insurance policy contains Additional Exclusions or if any borrower fails to purchase the insurance requested to be purchased by the Servicer pursuant to clause (B) above. If the Special Servicer determines that such failure is not an Acceptable Insurance Default, the Special Servicer shall notify the Servicer and the Servicer shall cause such insurance to be maintained. Furthermore, the Special Servicer shall inform the Rating Agencies as to such conclusions for those Mortgage Loans that have one of the ten (10) highest outstanding Stated Principal Balances of all of the Mortgage Loans then included in the Trust. During the period that the Special Servicer is evaluating the availability of such insurance, the Servicer will not be liable for any loss related to its failure to require the Mortgagor to maintain such insurance and will not be in default of its obligations as a result of such failure.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy Insurance Policy with a Qualified Insurer insuring against fire and hazard losses on all of the Mortgage Loans or REO Properties, as applicablethe case may be, required to be serviced and administered hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) Insurance Policy provides protection equivalent to the individual policies otherwise required herein and in required, the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause fire and hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy Insurance Policy may contain a deductible clause (not in excess of a customary amount)clause, in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, Servicer shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a fire and hazard insurance policy Insurance Policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyInsurance Policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with of such loss or losses that would have been covered under the individual policy but are not covered under the blanket Insurance Policy because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (orLoan, or in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master In connection with its activities as administrator and Servicer and of the Special Mortgage Loans, the Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it Insurance Policy in a timely fashion in accordance with the terms of such policy. The Special Servicer, to the extent consistent with the Servicing Standards, may maintain, earthquake insurance on REO Properties, provided coverage is available at commercially reasonable rates, the cost of which shall be a Servicing Advance.
(ii) If the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by a master single interest or force-placed insurance policy with a Qualified Insurer naming the Servicer or the Special Servicer on behalf of the Trustee as the loss payee, then to the extent such Insurance Policy provides protection equivalent to the individual policies otherwise required, the Servicer or the Special Servicer shall conclusively be deemed to have satisfied its obligation to cause such insurance to be maintained on the related Mortgage Properties and REO Properties. In the event the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by such master single interest or force-placed insurance policy, the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) shall be paid by the Servicer as a Servicing Advance. Such master single interest or force-placed policy may contain a deductible clause, in which case the Servicer or the Special Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such policy had it been maintained, deposit into the Certificate Account from its own funds the amount not otherwise payable under the master single or force-placed interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing Standard.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master term of this Agreement a blanket fidelity bond and an errors and omissions Insurance Policy with a Qualified Insurer covering the Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard 's and the terms Special Servicer's, as applicable, officers and conditions employees acting on behalf of such Environmental Insurance Policy to make a claim thereunder the Servicer and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim its activities under this Agreement. Notwithstanding the foregoing, so long as the long term debt or the deposit obligations or claims-paying ability of the Servicer is rated at least "A" by Moody's and Fitch, the Servicer shall be allowed to provide self-insura▇▇▇ ▇▇▇h respect to a fidelity bond and an Environmental Errors and Omissions Insurance Policy described above (whether Policy. The amount of coverage shall be at least equal to the coverage that would be required by Fannie Mae or Freddie Mac, whichever is greater, with respect to the Master Se▇▇▇▇▇▇ or the ▇▇▇▇▇▇▇ Servicer if the Servicer or the Special Servicer, as applicable, were servicing and administering the Mortgage Loans or Specially Serviced Mortgage Loans, as applicable, for Fannie Mae or Freddie Mac. Coverage of the Servicer or the Special Serv▇▇▇▇ ▇nder a p▇▇▇▇▇ ▇r bond obtained by an Affiliate of the Servicer or the Special Servicer and providing the coverage required by this Section 3.07(c) shall be (subject satisfy the requirements of this Section 3.07(c). The Special Servicer and the Servicer will promptly report in writing to Section 3.11(h) the Trustee any material changes that may occur in their respective fidelity bonds, if any, and/or their respective errors and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Serviceromissions Insurance Policies, as the case may be, as a Servicing Advance.
(d) and will furnish to the Trustee copies of all binders and policies or certificates evidencing that such bonds, if any, and insurance policies are in full force and effect. The Master Servicer and the Special Servicer shall each at all times during cause the term Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Agreement Section 3.07(c).
(ord) At the time the Servicer determines in accordance with the Servicing Standard that any Mortgaged Property shall be in a federally designated special flood hazard area (and such flood insurance has been made available), the Servicer will use reasonable efforts to cause the related Mortgagor (in accordance with applicable law and the case terms of the Special ServicerMortgage Loan documents) to maintain, and, if the related Mortgagor shall default in its obligation to so maintain, shall itself maintain to the extent available at all times during commercially reasonable rates (as determined by the term Servicer in accordance with the Servicing Standards and to the extent the Trustee, as mortgagee, has an insurable interest therein), flood insurance in respect thereof, but only to the extent the related Mortgage Loan permits the mortgagee to require such coverage and the maintenance of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are coverage is consistent with the Servicing StandardStandards. 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 insurance which is available under the National Flood Insurance Act of 1968, as amended. If the cost of any insurance described above is not borne by the Mortgagor, the Servicer shall promptly make a Servicing Advance for such costs.
(e) During all such times as any REO Property shall be located in a federally designated special flood hazard area, the Special Servicer will cause to be maintained, to the extent available at commercially reasonable rates (as determined by the Special Servicer in accordance with the Servicing Standards), a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration in an amount representing coverage not less than the maximum amount of insurance which is available under the National Flood Insurance Act of 1968, as amended. The Master Servicer or Special Servicer cost of any such flood insurance with respect to an REO Property shall be deemed an expense of the Trust payable out of the related REO Account pursuant to have complied with Section 3.16(c) or, if the foregoing provision if an Affiliate thereof has such fidelity bond coverage andamount on deposit therein is insufficient therefor, paid by the terms of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaa Servicing Advance.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Jp Morgan Chase Com Mort Sec Corp Pas THR CRT Ser 2002 Cibc5)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Serviced Loan, the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower each Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage maintain, and, if such Borrower the Mortgagor does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) maintained, for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due including each Mortgaged Property relating to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage any Specially Serviced Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably requirerequired, subject to applicable law, under the related Mortgage Loan Documentsloan documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any Mortgage Loan grants such loan documents permit the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Mortgagor is required to obtain the requisite insurance coveragemaintain, the Master Servicer shall (exercise such discretion in a manner consistent with the Servicing Standard and, prior to the date such existing insurance expires or is required to be renewed, the Master Servicer may, to the extent consistent with the Servicing Standard, take into account insurance in place at loan origination, with a view towards requiring insurance comparable to that required under other Serviced Loans with express provisions governing such matters and including business interruption or rental loss insurance for at least 12 months; and provided, further, the Master Servicer shall be required to maintain such insurance coverage upon the related Mortgagor's failure to do so only to the extent that such insurance is available at commercially reasonable rates and the Trustee, on behalf of the Trust, as mortgagee has an insurable interest. Subject to Section 3.17(b), the Special Servicer shall also cause to be maintained for each REO Property (other than with respect to any REO Property related to a Non-Serviced Loan) use efforts no less insurance coverage (to the extent available at commercially reasonable rates) (A) than was previously required of the related Mortgagor under the related loan documents and (B), at a minimum, (i) hazard insurance with a replacement cost rider, (ii) business interruption or rental loss insurance for at least 12 months, and (iii) commercial general liability insurance, in each case, in an amount customary for the type and geographic location of such REO Property and consistent with the Servicing Standard Standard; provided that all such insurance required to cause the related Borrower to obtain the requisite insurance coverage be maintained by Master Servicer or Special Servicer shall be obtained from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have a financial strength or claims-paying rating no obligation beyond using its reasonable efforts consistent with lower than two rating categories below the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standardhighest rated Certificates outstanding, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain no lower than "A" from Fitch and "A" from S&P (or obtain in such other form and amount or issued by an insurer with such other financial strength or claims-paying ability as would not, as confirmed in writing by the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardrelevant Rating Agency, result in an Adverse Rating Event. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a the Mortgage LoanLoans), or shall name the Trustee (and in the case of a Whole Loan, the related Companion Loan Holder) as the insured, with loss payable to the Special Servicer on behalf of the TrusteeTrustee (and in the case of a Whole Loan, the related Companion Loan Holder) (in the case of insurance maintained in respect of REO Properties), and shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in into the Collection Account in accordance with Section 3.04Certificate Account, or, if a Whole Loan is involved, the related Whole Loan Custodial Account, subject to withdrawal pursuant to Section 3.053.05(a), or Section 3.05(f), as applicable in the case of amounts received in respect of a Mortgage Serviced Loan, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Serviced Loan, notwithstanding that the terms of such Mortgage Serviced Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust or, if a Whole Loan is involved, on behalf of the related Companion Loan Holder, to enforce any obligations of the related Borrower Mortgagor under such Mortgage Serviced Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, by and reimbursable to, to the Master Servicer or the Special Servicer, as the case may be, as a Servicing Advance. If the related loan documents specifically and expressly set forth terms requiring insurance coverage against terrorist or similar acts for a Serviced Loan, then the Master Servicer and the Special Servicer shall enforce the terms of the related loan documents in accordance with the Servicing Standard, and if the Mortgagor fails to maintain such insurance, such failure shall constitute a Servicing Transfer Event. To the extent the loan documents do not set forth specific terms requiring insurance coverage against terrorist or similar acts and a Serviced Loan (x) requires a Mortgagor to maintain insurance policies covering some or all of the risks contained in the Additional Exclusions or (y) in accordance with the Servicing Standard, the Master Servicer has determined (in consultation with the Special Servicer and the Directing Certificateholder) that the loan documents permit the lender to require the Mortgagor to maintain insurance policies covering some or all the risks contained in the Additional Exclusions (the covered risks required to be covered or that the lender has the discretion to require to be covered being referred to as "Covered Risks"), the Master Servicer shall use reasonable efforts in accordance with the Servicing Standard to determine whether, upon renewal of the Mortgagor's property or casualty insurance (including any all risk insurance policy), any of the Covered Risks are excluded from coverage. If any of the Covered Risks are determined by the Master Servicer to be excluded from coverage, the Master Servicer shall request the Mortgagor to either (i) purchase insurance acceptable to the Master Servicer in accordance with the Servicing Standard and in accordance with the related loan documents covering such Covered Risks or (ii) provide a written explanation as to its reasons for failing to purchase such insurance. Notwithstanding the foregoing, with the written consent of the Special Servicer in accordance with the Servicing Standard the Master Servicer may waive the requirement to procure insurance covering any of the Covered Risks if the Master Servicer determines in accordance with the Servicing Standard that (1) insurance covering any such Covered Risks is not available at a commercially reasonable price, or (2) based on information reasonably available to the Master Servicer, after due inquiry, any such Covered Risks are at that time not commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which the Mortgaged Property is located unless the Stated Principal Balance of the Serviced Loan is greater than $20,000,000. If the Stated Principal Balance of the Serviced Loan is greater than $20,000,000, then the Master Servicer must determine that the circumstances in both clauses (1) and (2) of the immediately preceding sentence apply prior to waiving the Mortgagor's requirement to procure insurance with respect to any Covered Risks. If the Special Servicer fails to give a response to the Master Servicer as referenced in the second preceding sentence within ten Business Days of the Master Servicer initially notifying the Special Servicer in writing of such request, the Master Servicer shall promptly notify the Directing Certificateholder of such failure of the Special Servicer to respond to such request. If the Directing Certificateholder and/or the Special Servicer have not responded to the Master Servicer within ten Business Days of the notice referenced in the immediately preceding sentence, the Master Servicer shall determine in accordance with the Servicing Standard whether to require (or not require) the Mortgagor to maintain such insurance; provided, that during the period that the Special Servicer and/or the Directing Certificateholder are evaluating such insurance, none of the Master Servicer, the Special Servicer and/or the Directing Certificateholder shall be liable for any loss related to its failure to require a Mortgagor to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure. If the Master Servicer requires the Mortgagor to maintain such insurance and the Mortgagor fails to maintain such insurance, to the extent such insurance is then reasonably available, the Master Servicer shall then procure such insurance in accordance with the Servicing Standard and such failure by the Mortgagor shall constitute a Servicing Transfer Event. For purposes of computing whether the $20,000,000 threshold described herein is met for a particular Serviced Loan, if a Serviced Loan is secured by multiple Mortgaged Properties, then the amount subject to the $20,000,000 threshold shall be the portion of the Stated Principal Balance of the related Serviced Loan pro rated based on an individual Mortgaged Property's appraised value as a percentage of the total appraised value of all of the related Mortgaged Properties.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-force placed policy insuring against hazard losses on all of the Mortgage Serviced Loans or REO PropertiesProperties (other than with respect to any REO Property related to a Non-Serviced Loan), as applicable, that it is required to service and administer hereunder, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having a financial strength or claims-paying rating no lower than "A" from Fitch and "A" from S&P or having such other financial strength or claims-paying ability rating as would not, as confirmed in writing by the Required Claims-Paying Ratingsrelevant Rating Agency, result in an Adverse Rating Event and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-force placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Serviced Loan (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which that is consistent with the Servicing Standard). The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholdersthe Certificateholders and, in the case of a Whole Loan, the related Companion Loan Holder, claims under any such blanket or master force-forced placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or or REO Properties for which it is responsible exist as part of the Trust Fund) keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the Required Claims-Paying Ratingshighest rated Certificates outstanding, and in any event no lower than "A" from Fitch and "A" from S&P, a fidelity bond in such form and amount as are consistent would permit it to be a qualified Fannie Mae seller-servicer of multifamily mortgage loans (or in such ot▇▇▇ ▇▇r▇ ▇nd amount or issued by an insurer with such other financial strength or claims-paying ability rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Servicing StandardTrustee by the relevant Rating Agency)). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten days' prior written notice to the Trustee. Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (10or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Loans and/or REO Properties for which it is responsible exist as part of the Trust Fund) also keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than "A" from Fitch and "A" from S&P, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified Fannie Mae seller-servicer of multifamily mortgage loans (or in such ot▇▇▇ ▇▇r▇ ▇nd amount or issued by an insurer with such other financial strength or claims-paying rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Trustee by the relevant Rating Agency)). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without ten days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or the Special Servicer (or its direct or indirect parent company), as applicable, are rated not lower than "A" from Fitch and "A" from S&P, the Master Servicer or Special Servicer, as applicable, may self-insure with respect to either or both of the fidelity bond coverage and the errors and omissions coverage required as described above, in which case it shall not be required to maintain an insurance policy with respect to such party’s corporacoverage.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Banc of America Commercial Mortgage Inc., Series 2007-2)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case Each of each Mortgage Loan, the Master Servicer shall and the Special Servicer shall, as to those Mortgage Loans it is obligated to service hereunder, use reasonable its best efforts consistent in accordance with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower the related Mortgagor does not so maintain, the Master Servicer will (even in the case of Specially Serviced Mortgage Loans) shall itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property maintain (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal subject to the lesser provisions of (i) the full replacement cost of improvements securing such Mortgage Loan this Agreement regarding Nonrecoverable Advances, and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, further subject to applicable lawSection 3.11(h) hereof, under and to the related Mortgage Loan Documents; provided that all extent the Trustee, as mortgagee on behalf of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant Certificateholders, has an insurable interest and to the terms of the related Mortgage Loan Documents and is extent available at commercially reasonable rates;
) all insurance coverage as is required under the related Mortgage (B) subject to applicable law); provided that if and any Mortgage permits the holder thereof to dictate to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to Mortgagor the insurance provider from whom the related Borrower is coverage to obtain the requisite insurance coveragebe maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall (to the extent impose such insurance requirements as are consistent with the Servicing Standard) use efforts consistent with the Servicing Standard . The Special Servicer shall cause to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thatbe maintained for each REO Property, in each casecase with an insurer that possesses (or whose obligations are guaranteed or backed, have in writing, by an entity having) the Required Claims-Paying Ratings at the time such policy is purchased, no less insurance coverage is obtained;
(C) than was previously required of the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, related Mortgagor under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty Mortgage did not so require, hazard insurance, public liability insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist and business interruption or similar acts, and/or (ii) specific rent loss insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, in such insurance upon terms not materially less favorable than those in place amounts as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry are consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with be reimbursed for the premium costs thereof as a Servicing Standard, Advance pursuant to maintain with Qualified Insurers having and to the Required Claims-Paying Ratings extent permitted under Section 3.05
(a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, the Mortgaged Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer Servicer, as applicable, in maintaining any such insurance shall not, solely for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust provision is in no way intended to enforce any obligations of affect amounts due and owing from the related Borrower Mortgagor under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy insuring against hazard losses on any or all of the Mortgage Loans Mortgaged Properties (in the case of the Master Servicer) or REO Properties, as applicableProperties (in the case of the Special Servicer), then, to the extent such policy (Ai) is obtained from a Qualified Insurer having that possesses (or whose obligations are guaranteed or backed, in writing, by an entity having) the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable, so covered, and the premium costs thereof shall be, if and to the extent they are specifically attributable either to a specific Mortgaged Property during any period that the related Mortgagor has failed to maintain the hazard insurance required under the related Mortgage Loan in respect of such Mortgaged Property or to a specific REO Property, a Servicing Advance reimbursable pursuant to and to the extent permitted under Section 3.05(a); provided that, to the extent that such premium costs are attributable to properties other than Mortgaged Properties and/or REO Properties or are attributable to Mortgaged Properties as to which the hazard insurance required under the related Mortgage Loan is being maintained, they shall be borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder Property, as applicable, a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyproperty specific policy (taking into account any deductible clause that would have been permitted therein), promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds (without any right of reimbursement from the Trust, reimbursement) the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such losses up to the difference between the amount of the deductible clause to in such blanket policy and the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence amount of any deductible clause that would have been permitted under such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)property specific policy. The Master Servicer and the Special Servicer shall each agree to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cii) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if If the Master Servicer has actual knowledge shall cause any Mortgaged Property or the Special Servicer shall cause any REO Property to be covered by a master single interest insurance policy naming the Master Servicer or the Special Servicer, as applicable, on behalf of any event the Trustee as the loss payee, then to the extent such policy (i) is obtained from a Qualified Insurer that possesses (or whose obligations are guaranteed or backed, in writing, by an “Insured Environmental Event”entity having) giving rise the Required Claims-Paying Ratings and (ii) provides protection equivalent to a claim under an Environmental Insurance Policythe individual policies otherwise required, the Master Servicer shall notify or the Special Servicer Servicer, as applicable, shall conclusively be deemed to have satisfied its obligation to cause such effect and insurance to be maintained on such Mortgaged Property (in the case of the Master Servicer) or REO Property (in the case of the Special Servicer). If the Master Servicer shall take reasonable actions cause any Mortgaged Property as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect related Mortgagor has failed to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policymaintain the required insurance coverage, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, or the Special Servicer shall notify cause any REO Property, to be covered by such master single interest insurance policy, then the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions incremental costs of such Environmental Insurance Policy insurance applicable to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each such Mortgaged Property or REO Property that (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether covered thereby) paid by the Master Servicer or the Special Servicer, as applicable, shall constitute a Servicing Advance. The Master Servicer shall, consistent with the Servicing Standard and the terms of the related Mortgage Loan documents, pursue the related Mortgagor for the amount of such incremental costs. All other costs associated with any such master single interest insurance policy (including, without limitation, any minimum or standby premium payable for such policy) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such master single interest insurance policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as applicable, shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property, as the case may be, a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such property specific policy had it been maintained, promptly deposit into the Collection Account from its own funds (without right of reimbursement) the amount not otherwise payable under the master single interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing AdvanceStandard.
(dc) The Each of the Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having recognized insurers that possess (or whose obligations are guaranteed or backed, in writing, by entities having) the Required Claims-Paying Ratings, Ratings a fidelity bond in such form and amount as are consistent with would permit it to be a qualified ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) 30 days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations In addition, each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement keep in force with recognized insurers that possess (or whose obligations are guaranteed or backed, in writing, by entities having) the Required Claims-Paying Ratings a policy or policies of insurance covering loss occasioned by the errors and omissions of its (or, in the case of each of the initial Master Servicer and the initial Special Servicer, its general partner's) officers and employees in connection with its obligation to service the Mortgage Loans for which it is responsible hereunder, which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Any such errors and omissions policy, if required, shall provide that it may not be canceled without 30 days' prior written notice to the Trustee.
(d) All insurance coverage required to be maintained under this Section 3.07 shall be obtained from Qualified Insurers.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Mortgage Capital Funding Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of The applicable Master Servicer (with respect to each Serviced Mortgage Loan, ) and the Master Special Servicer (with respect to each Administered REO Property) shall use reasonable efforts to require the related Mortgagor to maintain or, consistent with the Servicing Standard and to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled Trust has an insurable interest and the subject coverage, except as provided below with respect to reasonably requireinsurance against terrorist or similar acts, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) , otherwise cause to be maintained for each Mortgaged Property all insurance coverage as is required under the related Mortgage; provided that, if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Mortgagor is required to obtain the requisite insurance coveragemaintain, the applicable Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts exercise such discretion in a manner consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that(and, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss may take into account the insurance covering revenues or rents for a period in place at the closing of at least twelve (12) months, in each case if so required pursuant to the related subject Serviced Mortgage Loan DocumentsLoan); and provided, howeverfurther, that that, required insurance coverage obtained by the applicable Master Servicer shall be from Qualified Insurers. The cost of any such insurance coverage obtained by either the applicable Master Servicer or the Special Servicer shall not be a Servicing Advance to be paid by the applicable Master Servicer pursuant to Section 3.03. The Majority Controlling Class Certificateholder may request that earthquake insurance be secured for one or more Mortgaged Properties at the expense of the Majority Controlling Class Certificateholder, to the extent that the Trust has an insurable interest; provided that neither the applicable Master Servicer nor the Special Servicer shall be obligated to obtain at the expense of the Trust earthquake or environmental insurance for any Mortgaged Property securing a Serviced Mortgage Loan unless (i) it was in effect at the Closing Date or (ii) is required in any event to maintain or obtain under the insurance coverage otherwise described by this paragraph beyond what related loan documents and is available at commercially reasonable rates and consistent with rates. Subject to Section 3.17(a), the Servicing StandardSpecial Servicer shall also cause to be maintained for each Administered REO Property no less insurance coverage than was previously required of the Mortgagor under the related Mortgage; provided that all such insurance shall be obtained from Qualified Insurers. All such insurance policies maintained as described above by the applicable Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to propertyproperty and do not relate to an Administered REO Property) a “"standard” " mortgagee clause, with loss payable to the Trustee or the applicable Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Serviced Mortgage Loan, or Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of Administered REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (A) the full replacement cost of the improvements on the subject Mortgaged Property or Administered REO Property, as applicable, or (B) the outstanding principal balance owing on the related Serviced Mortgage Loan or REO Mortgage Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Serviced Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Serviced Mortgage Loan document; and (vii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the applicable Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or Administered REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in in, as applicable, the applicable Master Servicer's Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), or any related SLC Custodial Account, subject to withdrawal pursuant to Section 3.05(e), in the case of amounts received in respect of a Serviced Mortgage Loan, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the applicable Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage Loan, notwithstanding that the terms of such the related Serviced Mortgage Loan so permit. Notwithstanding the foregoing, subject to Section 6.11, Section 6.12 and Section 6.13, in each case as and if applicable, no Master Servicer or Special Servicer will be required to maintain, and shall not cause a Mortgagor to be in default with respect to the failure of the related Mortgagor to obtain, fire and extended perils casualty insurance which does not contain any carve-out for terrorist or similar acts, if and only if, the Special Servicer, in consultation with the Controlling Class Representative, has determined in accordance with the Servicing Standard that either (i) such insurance is not available at any rate or (ii) such insurance is not available at commercially reasonably rates and that such hazards are not at the time commonly insured against for properties similar to the subject Mortgaged Property and located in or around the region in which the subject Mortgaged Property is located; provided, however, that this sentence the Controlling Class Representative shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust have more than three (3) Business Days to enforce any obligations of the related Borrower under such Mortgage Loan. Costs respond to the Master Servicer or Special Servicer's request for consultation; and provided, further, that upon the Special Servicer's determination consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toconsult with the Controlling Class Representative, the Special Servicer shall not be required to do so; and provided, further, that, during the period that the Special Servicer is evaluating such insurance hereunder, the applicable Master Servicer or Special Servicer, as shall not be liable for any loss related to its failure to require the case may be, Mortgagor to maintain terrorism insurance and shall not be in default of its obligations hereunder as a Servicing Advanceresult of such failure. The Special Servicer shall promptly notify the applicable Master Servicer of each determination under this paragraph.
(b) If (i) the a Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-force placed policy insuring against hazard losses on all of the Serviced Mortgage Loans or and/or Administered REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the then such Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or Administered REO Properties. Each Master Servicer and the Special Servicer shall bear the cost of any premium payable in respect of such blanket policy obtained by it (other than blanket policies specifically obtained for Mortgaged Properties or Administered REO Properties) without right of reimbursement; provided that if a Master Servicer or the Special Servicer, as applicablethe case may be, causes any Mortgaged Property or Administered REO Property to be covered by such blanket policy, the incremental costs of such insurance applicable to such Mortgaged Property or Administered REO Property shall constitute, and be reimbursable as, a Servicing Advance to the extent that, except with respect to an Administered REO Property, such blanket policy provides insurance that the related Mortgagor has failed to maintain. Such a blanket policy or master force-force placed policy may contain a deductible clause (not in excess of a customary amount), in which case the applicable Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaProperty
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Citigroup Commercial Mortgage Trust 2007-C6)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case Each of each Mortgage Loan, the Master Servicer shall and the Special Servicer shall, as to those Mortgage Loans it is obligated to service hereunder, use reasonable its best efforts consistent in accordance with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower the related Mortgagor is required by the terms of the related Mortgage Loan and does not so maintain, the Master Servicer will (even in the case of Specially Serviced Mortgage Loans) shall itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property maintain (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal subject to the lesser provisions of (ithis Agreement regarding Nonrecoverable Advances, and further subject to Section 3.11(h) hereof)), to the full replacement cost extent the Trustee, as mortgagee on behalf of improvements securing such Mortgage Loan the Certificateholders, has an insurable interest and (ii) to the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (yextent available at commercially reasonable rates) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; (subject to applicable law), provided that all of if any Mortgage permits the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required holder thereof to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant dictate to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to Mortgagor the insurance provider from whom the related Borrower is coverage to obtain the requisite insurance coveragebe maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall (to the extent impose such insurance requirements as are consistent with the Servicing Standard) use efforts consistent with . The Special Servicer shall direct the Servicing Standard Master Servicer to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thatmaintain for each REO Property, in each case, have case with an insurer that possesses the Required Claims-Paying Ratings at the time such policy is purchased, no less insurance coverage is obtained;
(C) than was previously required of the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, related Mortgagor under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty Mortgage did not so require, hazard insurance, public liability insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist and business interruption or similar acts, and/or (ii) specific rent loss insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, in such insurance upon terms not materially less favorable than those in place amounts as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry are consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable reimbursed for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder premium costs thereof as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required Servicing Advance pursuant to a provision that entitles and to the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings extent permitted under Section 3.05
(a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, the Mortgaged Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer Servicer, as applicable, in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy insuring against hazard losses on any or all of the Mortgage Loans Mortgaged Properties (in the case of the Master Servicer) or REO Properties, as applicableProperties (in the case of the Special Servicer), then, to the extent such policy (A) is obtained from a Qualified Insurer having that possesses the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable, so covered, and the premium costs thereof shall be, if and to the extent they are specifically attributable either to a specific Mortgaged Property during any period that the related Mortgagor has failed to maintain the hazard insurance required under the related Mortgage Loan in respect of such Mortgaged Property or to a specific REO Property, a Servicing Advance by the Master Servicer at the direction of the Special Servicer under Section 3.07(a) which is reimbursable to the Master Servicer pursuant to and to the extent permitted under Section 3.05(a); provided that, to the extent that such premium costs are attributable to properties other than Mortgaged Properties and/or REO Properties or are attributable to Mortgaged Properties as to which the hazard insurance required under the related Mortgage Loan is being maintained, they shall be borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder Property, as applicable, a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyproperty specific policy (taking into account any deductible clause that would have been permitted therein), promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds (without any right of reimbursement from the Trust, reimbursement) the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such losses up to the difference between the amount of the deductible clause to in such blanket policy and the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence amount of any deductible clause that would have been permitted under such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)property specific policy. The Master Servicer and the Special Servicer shall each agree to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cii) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if If the Master Servicer has actual knowledge shall cause any Mortgaged Property or the Special Servicer shall cause any REO Property to be covered by a master single interest insurance policy naming the Master Servicer or the Special Servicer, as applicable, on behalf of any event the Trustee as the loss payee, then to the extent such policy (an “Insured Environmental Event”A) giving rise is obtained from a Qualified Insurer that possesses the Required Claims-Paying Ratings and (B) provides protection equivalent to a claim under an Environmental Insurance Policythe individual policies otherwise required, the Master Servicer shall notify or the Special Servicer Servicer, as applicable, shall conclusively be deemed to have satisfied its obligation to cause such effect and insurance to be maintained on such Mortgaged Property (in the case of the Master Servicer) or REO Property (in the case of the Special Servicer). If the Master Servicer shall take reasonable actions cause any Mortgaged Property as are in accordance to which the related Mortgagor has failed to maintain the required insurance coverage, or the Master Servicer at the direction of the Special Servicer shall cause any REO Property, to be covered by such master single interest insurance policy, then the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) paid by the Master Servicer, shall constitute a Servicing Advance which is reimbursable to the Master Servicer pursuant to and to the extent permitted under Section 3.05(a). The Master Servicer shall, consistent with the Servicing Standard and the terms and conditions of the related Mortgage Loan documents, pursue the related Mortgagor for the amount of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunderincremental costs. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or All other out-of-pocket costs incurred in accordance with the Servicing Standard in connection associated with any claim under an Environmental Insurance Policy described above such master single interest insurance policy (whether by the Master Servicer including, without limitation, any minimum or the Special Servicerstandby premium payable for such policy) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such master single interest insurance policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as applicable, shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property, as the case may be, a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such property specific policy had it been maintained, promptly deposit into the Certificate Account from its own funds (without right of reimbursement) the amount not otherwise payable under the master single interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing AdvanceStandard.
(dc) The Each of the Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having recognized insurers that possess the Required Claims-Paying Ratings, Ratings a fidelity bond in such form and amount as are consistent with would permit it to be a qualified ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) 30 days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations In addition, each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement keep in force with recognized insurers that possess the Required Claims-Paying Ratings a policy or Special Servicerpolicies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its obligation to service the Mortgage Loans for which it is responsible hereunder, which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Any such errors and omissions policy, if required, shall provide that it may not be canceled without 30 days' prior written notice to the Trustee.
(d) All insurance coverage required to be maintained under this Section 3.07 shall be obtained from Qualified Insurers.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Banc of Amercia Com Mort Pas Thru Cer Series 2000-2)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the Master The Servicer shall use its reasonable efforts consistent with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to by the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) Note, or if and to the extent that any Mortgagor does not so maintain, shall itself maintain, for each Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite all insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage as is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing DateMortgage, unless the Special Servicer has determined otherwise provided in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultationthis Section 3.07; provided, however, that upon if any Mortgage permits the Special Servicer’s determinationholder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Servicer shall impose such insurance requirements as are consistent with the Servicing StandardStandards, provided that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed obligated to maintain insurance required under (against property damage resulting from terrorist or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust similar acts unless otherwise provided in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Propertythis Section 3.07. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that Loan. All Insurance Policies maintained by the Servicer or the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall (i) contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, Loans other than REO Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of REO Properties), (ii) be in the name of the Trustee (in the case of insurance maintained in respect of REO Properties), (iii) include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing Mortgaged Property or the REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions, (iv) include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents), (v) be noncancellable without 30 days prior written notice to the insured party (except in the case of nonpayment, in which case such policy shall not be cancelled without 10 days prior notice) and (vi) be issued by a Qualified Insurer authorized under applicable law to issue such Insurance Policies. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies Insurance Policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing StandardStandards and the provisions of the related Mortgage Loan) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c3.05(a), in the case of amounts received in respect of an REO Property. Any cost costs incurred by the Master Servicer or Special Servicer in maintaining any such insurance Insurance Policies in respect of Mortgage Loans (other than REO Properties)
(i) if the Mortgagor defaults on its obligation to do so, shall be advanced by the Servicer as a Servicing Advance and will be charged to the related Mortgagor and (ii) shall not, for purposes hereof, including of calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loan so permit. Any cost incurred by the Special Servicer in maintaining any such Insurance Policies with respect to REO Properties shall be an expense of the Trust payable out of the related REO Account pursuant to Section 3.16(c) or, if the amount on deposit therein is insufficient therefor, advanced by the Servicer as a Servicing Advance. Notwithstanding the foregoing, the Servicer or Special Servicer (with respect to REO Properties), as applicable, will not be required to maintain and shall not cause a Mortgagor to be in default with respect to the failure of the related Mortgagor to obtain, all-risk casualty insurance which does not contain any carve-out for terrorist or similar acts, if, after the Servicer provides the Special Servicer the information described in the immediately succeeding sentence for Mortgage Loans but not REO Properties, the Special Servicer, with the consent of the Directing Certificateholder, and, with respect to the Bishops Gate AB Mortgage Loan, the Bishops Gate Companion Holder, and, with respect to the Concord Mills Mortgage Loan, the Directing Certificateholder, has determined in ▇▇▇▇rdance with the Servicing Standards that either (a) such insurance is not available at any rate or (b) such insurance is not available at commercially reasonably rates and that such hazards are not at the time commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which such Mortgaged Property is located; provided, however, that this sentence shall upon the Special Servicer's determination consistent with the Servicing Standards, that exigent circumstances do not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or allow the Special Servicer to obtain the consent of the Directing Certificateholder or Bishops Gate Companion Holder, if applicable, the Special Servicer shall not be required to do so; provided, further that, during the period that the Special Servicer is evaluating such insurance hereunder, neither the Servicer nor the Special Servicer shall be liable for any loss related to its failure to require the Mortgagor to maintain such insurance and shall not be in default of its obligations hereunder as a result of such failure. If the Servicer becomes aware that a Mortgagor is not maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toagainst terrorist or similar acts as required under the related Mortgage Loan, the Master Servicer or shall deliver the following to the Special Servicer: (i) an outline of the coverage(s) required under the Mortgage, (ii) an outline of the coverage(s) carried by the Mortgagor and how it fails to comply with the required coverage(s), (iii) a statement as to why the Servicer believes the Special Servicer should review the matter, (iv) copies of all relevant documentation in the possession of the Servicer to the extent not already provided to the Special Servicer, and (v) such other information (other than quotes for insurance) as shall reasonably be requested by the case may beSpecial Servicer and in the possession of the Servicer, as a Servicing Advanceincluding, without limitation, all documentation regarding the Mortgagor's efforts to obtain such insurance. The Special Servicer shall promptly notify the Servicer of each determination under this paragraph.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy Insurance Policy with a Qualified Insurer insuring against fire and hazard losses on all of the Mortgage Loans or REO Properties, as applicablethe case may be, required to be serviced and administered hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) Insurance Policy provides protection equivalent to the individual policies otherwise required herein and in required, the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause fire and hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy Insurance Policy may contain a deductible clause (not in excess of a customary amount)clause, in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, Servicer shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a fire and hazard insurance policy Insurance Policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyInsurance Policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with of such loss or losses that would have been covered under the individual policy but are not covered under the blanket Insurance Policy because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (orLoan, or in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master In connection with its activities as administrator and Servicer and of the Special Mortgage Loans, the Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it Insurance Policy in a timely fashion in accordance with the terms of such policy. The Special Servicer, to the extent consistent with the Servicing Standards, may maintain, earthquake insurance on REO Properties, provided coverage is available at commercially reasonable rates, the cost of which shall be a Servicing Advance.
(ii) If the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by a master single interest or force-placed insurance policy with a Qualified Insurer naming the Servicer or the Special Servicer on behalf of the Trustee as the loss payee, then to the extent such Insurance Policy provides protection equivalent to the individual policies otherwise required, the Servicer or the Special Servicer shall conclusively be deemed to have satisfied its obligation to cause such insurance to be maintained on the related Mortgage Properties and REO Properties. In the event the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by such master single interest or force-placed insurance policy, the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) shall be paid by the Servicer as a Servicing Advance. Such master single interest or force-placed policy may contain a deductible clause, in which case the Servicer or the Special Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such policy had it been maintained, deposit into the Certificate Account from its own funds the amount not otherwise payable under the master single or force-placed interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing Standard.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master term of this Agreement a blanket fidelity bond and an errors and omissions Insurance Policy with a Qualified Insurer covering the Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard 's and the terms Special Servicer's, as applicable, officers and conditions employees acting on behalf of such Environmental Insurance Policy to make a claim thereunder the Servicer and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim its activities under an Environmental Insurance Policy described above (whether by this Agreement. Notwithstanding the Master foregoing, so long as the long term debt or the deposit obligations or claims-paying ability of the Servicer or the Special Servicer, as applicable, is rated at least "A2" by Moody's and "A" by S&P, the Servicer or the Special Servi▇▇▇, ▇▇ ▇pplic▇▇▇▇, ▇hall be allowed to provide self-insurance with respect to a fidelity bond and an Errors and Omissions Insurance Policy. The amount of coverage shall be at least equal to the coverage that would be required by Fannie Mae or Freddie Mac, whichever is greater, with respect to the Se▇▇▇▇▇▇ ▇▇ the ▇▇▇▇▇▇▇ Servicer if the Servicer or the Special Servicer, as applicable, were servicing and administering the Mortgage Loans or Specially Serviced Mortgage Loans, as applicable, for Fannie Mae or Freddie Mac. Coverage of the Servicer or the Special Serv▇▇▇▇ ▇nder a p▇▇▇▇▇ ▇r bond obtained by an Affiliate of the Servicer or the Special Servicer and providing the coverage required by this Section 3.07(c) shall be (subject satisfy the requirements of this Section 3.07(c). The Special Servicer and the Servicer will promptly report in writing to Section 3.11(h) the Trustee any material changes that may occur in their respective fidelity bonds, if any, and/or their respective errors and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Serviceromissions Insurance Policies, as the case may be, as a Servicing Advance.
(d) and will furnish to the Trustee copies of all binders and policies or certificates evidencing that such bonds, if any, and insurance policies are in full force and effect. The Master Servicer and the Special Servicer shall each at all times during cause the term Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Agreement Section 3.07(c).
(ord) At the time the Servicer determines in accordance with the Servicing Standard that any Mortgaged Property shall be in a federally designated special flood hazard area (and such flood insurance has been made available), the Servicer will use reasonable efforts to cause the related Mortgagor (in accordance with applicable law and the case terms of the Special ServicerMortgage Loan documents) to maintain, and, if the related Mortgagor shall default in its obligation to so maintain, shall itself maintain to the extent available at all times during commercially reasonable rates (as determined by the term Servicer in accordance with the Servicing Standards and to the extent the Trustee, as mortgagee, has an insurable interest therein), flood insurance in respect thereof, but only to the extent the related Mortgage Loan permits the mortgagee to require such coverage and the maintenance of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are coverage is consistent with the Servicing StandardStandards. 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 insurance which is available under the National Flood Insurance Act of 1968, as amended. If the cost of any insurance described above is not borne by the Mortgagor, the Servicer shall promptly make a Servicing Advance for such costs.
(e) During all such times as any REO Property shall be located in a federally designated special flood hazard area, the Special Servicer will cause to be maintained, to the extent available at commercially reasonable rates (as determined by the Special Servicer in accordance with the Servicing Standards and with the concurrence of the Directing Certificateholder), a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration in an amount representing coverage not less than the maximum amount of insurance which is available under the National Flood Insurance Act of 1968, as amended. The Master Servicer or Special Servicer cost of any such flood insurance with respect to an REO Property shall be deemed an expense of the Trust payable out of the related REO Account pursuant to have complied with Section 3.16(c) or, if the foregoing provision if an Affiliate thereof has such fidelity bond coverage andamount on deposit therein is insufficient therefor, paid by the terms of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaa Servicing Advance.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Jp Morgan Chase Com Mort Sec Corp Pass THR Cert Se 2003 C1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts (with respect to Mortgage Loans and Companion Loans to the extent that the Trust Fund has an insurable interest, but other than with respect to the [__________] Serviced Mortgage Loan and its related Companion Loan) and the Special Servicer (with respect to REO Properties to the extent that the Trust Fund has an insurable interest) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, howeverfurther, if and to the extent that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisora Mortgage so permits, the Special Servicer will not related Mortgagor shall be required to do so. If any such approval of exercise its reasonable best efforts to obtain the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt required insurance coverage from the Master Servicer of the Master Servicer’s determination Qualified Insurers and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation required insurance coverage obtained by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable from Qualified Insurers. REO Property with respect to the [__________] Loan is excluded for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insuranceall purposes from this Section 3.07. The cost of any such insurance coverage obtained by either the Master Servicer shall notify or the Special ServicerServicer shall be a Servicing Advance to be paid by the Master Servicer pursuant to Section 3.03. Whether or not the applicable Mortgage Loan documents require such insurance, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if may request that earthquake insurance be secured for one or more Mortgaged Properties at the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest expense of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyMajority Subordinate Certificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, also cause to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan DocumentsMortgage; provided, however, provided that the Special Servicer all such insurance shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardobtained from Qualified Insurers. All such insurance policies maintained as described above by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “"standard” " mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, or Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without [__] days' prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan document; and (vii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan or Companion Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loans so permit; provided, however, that this sentence shall not limit . Notwithstanding the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toforegoing, the Master Servicer or Special Servicer, as applicable, will not be required to maintain (and in the case may beof the Special Servicer, with respect to any Specially Serviced Mortgage Loan), and shall not cause a Mortgagor to be in default with respect to the failure of the related Mortgagor to obtain, all-risk casualty insurance which does not contain any carve-out for terrorist or similar acts, if and only if the Master Servicer with respect to non-Specially Serviced Mortgage Loans or the Special Servicer with respect to Specially Serviced Mortgage Loans, in consultation with the Controlling Class Representative, and, with respect to each Co-Lender Loan, in consultation with the related Companion Holder if required under the applicable Intercreditor Agreement, has determined in accordance with the Servicing Standard that either (a) such insurance is not available at any rate or (b) such insurance is not available at commercially reasonably rates and that such hazards are not at the time commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which such Mortgaged Property is located and the Controlling Class Representative has approved the decision not to require the borrower to maintain terrorism insurance (provided that the decision of the Controlling Class Representative to grant or withhold such consent shall be disregarded by the Special Servicer if such consent or lack of consent would cause the Master Servicer or the Special Servicer, as a applicable, to violate the Servicing AdvanceStandard); provided, however, the Controlling Class Representative's approval shall be deemed to have been given if it has not responded within [__] Business Days of receipt of the Master Servicer's or the Special Servicer's written recommendation and the information upon which such recommendation is based; provided, further, that upon the Master Servicer's or the Special Servicer's determination, as applicable, consistent with the Servicing Standard, that exigent circumstances do not allow the Master Servicer or the Special Servicer to consult with the Controlling Class Representative or Companion Holder, if applicable, the Master Servicer or the Special Servicer, as applicable, shall not be required to do so.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans, Companion Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) for [__] days’ prior ' written notice to the TrusteeTrustee prior to any cancellation. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification, downgrade or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for [__] days' written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct or indirect parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Wachovia Commercial Mortgage Securities Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts (with respect to Mortgage Loans other than Specially Serviced Mortgaged Loans) and the Special Servicer (with respect to Specially Serviced Mortgage Loans) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard; and provided further that, if and (during to the extent that a Mortgage so permits, the related Mortgagor shall be required to exercise its reasonable best efforts to obtain the required insurance coverage from Qualified Insurers. The cost of any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at coverage obtained by either the time commonly insured against for properties similar to the related Mortgaged Property and located in Master Servicer or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer shall be a Servicing Advance to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from paid by the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available pursuant to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insuranceSection 3.03. The Master Servicer shall notify Majority Subordinate Certificateholder may request that earthquake insurance be secured for one or more Mortgaged Properties at the Special Servicer, the Trustee, the Subordinate Class Representative and expense of the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyCertificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, also cause to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan DocumentsMortgage; provided, however, provided that the Special Servicer all such insurance shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardobtained from Qualified Insurers. All such insurance policies maintained as described above (i) shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “"standard” " mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, or Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; and (iv) in each case such insurance shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without for ten (10) days’ prior ' written notice to the TrusteeTrustee prior to any cancellation. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not adversely affect any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten days' written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct or indirect parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Commercial Mortgage Pass Through Certiticates Series 1999 C2)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the Master The Servicer shall use its reasonable best efforts consistent with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent required by the terms of the related Mortgage Note, all Insurance Policy coverage required under the related Mortgage (to which a Borrower the extent that the Trustee has an insurable interest and such Insurance Policy coverage is maintaining insurance coverage andavailable at commercially reasonable rates), or, if such Borrower the related Mortgagor does not so maintainmaintain such coverage, the Master Servicer will shall itself cause to be maintained maintain such coverage with Qualified Insurers having Insurers; provided, however, that if the Required Claims-Paying Ratings) for Servicer obtains such insurance, the related Mortgaged Property (x) Insurance Policy shall include a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, endorsement providing for no deduction for depreciation but in any event, event in an amount sufficient to avoid the application of any co-insurance clause and (y) all other unless otherwise permitted in the related Mortgage Loan documents; provided further, that if any of the related Loan Documents permits the holder thereof to dictate to the Mortgagor the Insurance Policy coverage to be maintained on such Mortgaged Property, the Servicer shall impose such insurance requirements as are consistent with the Servicing Standard. Subject to Section 3.17(a), the Special Servicer shall maintain for each REO Property no less Insurance Policy coverage (including but not limited to coverage for damage resulting from acts than was previously required of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, Mortgagor under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations with Qualified Insurers. All such Insurance Policies shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or contain a "standard" mortgagee clause, with loss payable to the Servicer on behalf of the Trustee (in the case of insurance maintained in respect of the Mortgage Loans other than REO Properties), (ii) not available at commercially reasonable rates and be in the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval name of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process case of making a determination described above insurance maintained in this paragraph, then, during the period respect of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent REO Properties) on behalf of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance underiii) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended include coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to not less than the lesser of (i) the full replacement cost of improvements at such the REO Property without reduction for depreciation or (ii) the outstanding principal balance of owing on the related REO Mortgage Loan, but, Loan but in any event, event in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and clause unless otherwise permitted in an amount not less than $1 million per occurrence the related Mortgage Loan documents and (civ) be issued by a Qualified Insurer authorized under applicable law to issue such Insurance Policies. With respect to any other Mortgage Loan that requires or permits the extent related lender to require that earthquake insurance be maintained, the Directing Certificateholder may request that earthquake insurance be secured for one or more Mortgaged Properties and, upon such request, the Servicer or Special Servicer, as applicable, shall use its reasonable best efforts consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period Standard to enforce such obligations consistent with the terms of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; , provided, however, that the Special Servicer shall Directing Certificateholder may not make such request with respect to Mortgaged Properties with respect to which earthquake insurance was not required to be required maintained at origination unless there is a material adverse change in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates facts and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable circumstances relating to the Master Servicer on behalf Mortgaged Property, including a decline in the net operating income or appraised value of the TrusteeMortgaged Property by 10%. With respect to any Mortgage Loan (i) that does not require or permit the related lender to require that earthquake insurance be maintained or (ii) that the Servicer or Special Servicer, in as applicable, has been unable to enforce the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf provisions of the Trusteepreceding sentence, in the case Directing Certificateholder may request that earthquake insurance be secured by the Servicer or Special Servicer, as applicable, at the expense of insurance maintained in respect of an REO Propertythe Directing Certificateholder. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies Insurance Policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing StandardStandard and the provisions of the related Mortgage Loan) shall be deposited in the Collection Certificate Account in accordance with Section 3.04or Pari Passu Account, as appropriate, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c3.05(a), in the case of amounts received in respect of an REO Property. Any cost costs incurred by the Master Servicer or Special Servicer in maintaining any such insurance Insurance Policies (other than in respect of REO Properties) (i) shall be advanced by the Servicer (or, if required by Section 3.03(c) the Trustee or the Fiscal Agent, as applicable) as a Servicing Advance (unless determined to be a Nonrecoverable Advance) if the Mortgagor defaults on its obligation to do so, and will be charged to the related Mortgagor, and (ii) shall not, for purposes hereofthereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan or Pari Passu Loan, notwithstanding that the terms of such Mortgage Loan or Pari Passu Loan so permit; provided, however, that this sentence shall not limit . Any cost incurred by the rights of the Master Servicer or Special Servicer on behalf in maintaining any such Insurance Policies with respect to REO Properties shall be an expense of the Trust to enforce any obligations payable out of the related Borrower under such Mortgage Loan. Costs REO Account pursuant to Section 3.16(c) or, if the Master amount on deposit therein is insufficient therefor, advanced by the Servicer (or, if required by Section 3.03(c), the Trustee or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special ServicerFiscal Agent, as the case may be, applicable) as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy Insurance Policy with a Qualified Insurer insuring against fire and hazard losses on all of the Mortgage Loans Loans, Pari Passu Loan or REO Properties, as applicablethe case may be, required to be serviced and administered hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) Insurance Policy provides protection equivalent to the individual policies otherwise required herein and in required, the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause fire and hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy Insurance Policy may contain a deductible clause (not in excess of a customary amount)clause, in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, Servicer shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a fire and hazard insurance policy Insurance Policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyInsurance Policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with of such loss or losses that would have been covered under the individual policy but are not covered under the blanket Insurance 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 Pari Passu 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 administrator and servicer of the Mortgage Loans and Pari Passu Loan, the Servicer agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders (or the holder of such Pari Passu Loan), claims under any such blanket Insurance Policy in a timely fashion in accordance with the terms of such policy. The Special Servicer, to the extent consistent with the Servicing Standard, may maintain, earthquake insurance on REO Properties, provided coverage is available at commercially reasonable rates, the cost of which shall be a Servicing Advance made by the Servicer. If the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by a blanket insurance policy with a Qualified Insurer naming the Servicer or the Special Servicer on behalf of the Trustee (or the holder of such Pari Passu Loan) as the loss payee, then to the extent such Insurance Policy provides protection equivalent to the individual policies otherwise required, the Servicer or the Special Servicer shall conclusively be deemed to have satisfied its obligation to cause such insurance to be maintained on the related Mortgage Properties and REO Properties. In the event the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by such blanket insurance policy, the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) shall be paid by the Servicer (or, if required by Section 3.03(c), the Trustee or the Fiscal Agent, as applicable) as a Servicing Advance. Such blanket insurance policy may contain a deductible clause, in which case the Servicer or the Special Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such policy had it been maintained, deposit into the Certificate Account or Pari Passu Account, as appropriate, 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master .
(c) Each of the Servicer and the Special Servicer shall each prepare obtain and presentmaintain at its own expense and keep in full force and effect throughout the term of this Agreement a blanket fidelity bond and an errors and omissions Insurance Policy with a Qualified Insurer covering the Servicer's and the Special Servicer's, as applicable, officers and employees and other persons acting on behalf of itself, the Trustee Servicer and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim its activities under an Environmental Insurance Policy described above this Agreement with a deductible clause that in no event exceeds the greater of (whether by i) $100,000 or (ii) 5% of the Master face amount of the fidelity bond or errors and omissions policy. The Servicer or the Special Servicer, as applicable, shall cause the Trustee, on behalf of the Trust, to be named as a loss payee on each such fidelity bond and errors and omissions policy. Notwithstanding the foregoing, (a) coverage in the form reflected on the attached Exhibit K shall be deemed to satisfy the Servicer's and the Special Servicer's obligations with respect to the maintenance of errors and omissions insurance, and (b) so long as the long term debt or the deposit obligations or claims-paying ability of the Servicer (or its immediate or remote parent) is rated at least "A" by ▇▇▇▇▇'▇ and "A" by S&P, the Servicer (or the Servicer's immediate or remote parent) shall be (subject allowed to Section 3.11(h) and Section 3.19(b)) paid byprovide self-insurance with respect to a fidelity bond; provided, and reimbursable tohowever, that if such self-insurance is provided by the Servicer's immediate or remote parent, the Master Servicer shall deliver to each Rating Agency a copy of the agreement pursuant to which such parent is obligated to insure the Servicer with respect to a fidelity bond. The amount of coverage shall be at least equal to the coverage that would be required by FNMA or FHLMC, whichever is greater, with respect to the Servicer or the Special Servicer if the Servicer or the Special Servicer, as applicable, were servicing and administering the Mortgage Loans or Specially Serviced Mortgage Loans, as applicable, for FNMA or FHLMC. Coverage of the Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of the Servicer or the Special Servicer and providing the coverage required by this Section 3.07(c) shall satisfy the requirements of this Section 3.07(c). The Special Servicer and the Servicer will promptly report in writing to the Trustee any material changes that may occur in their respective fidelity bonds, if any, and/or their respective errors and omissions Insurance Policies, as the case may be, as a Servicing Advanceand will furnish to the Trustee copies of all binders and policies or certificates evidencing that such bonds, if any, and insurance policies are in full force and effect.
(d) The Master During all such times as any Mortgaged Property shall be in a federally designated special flood hazard area (and such flood insurance has been made available), the Servicer will use its reasonable best efforts consistent with the Servicing Standard to cause the related Mortgagor (in accordance with applicable law and the Special Servicer shall each at all times during the term of this Agreement (or, in the case terms of the Special ServicerMortgage Loan documents) to maintain, and, if the related Mortgagor shall default in its obligation to so maintain, shall itself maintain to the extent available at all times during commercially reasonable rates (as determined by the term Servicer in accordance with the Servicing Standard), flood insurance in respect thereof, but only to the extent the related Mortgage Loan permits the mortgagee to require such coverage and the maintenance of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are coverage is consistent with the Servicing Standard. The Master Such flood insurance shall be in an amount not less than the lesser of (i) the unpaid principal balance of the related Mortgage Loan, and (ii) the maximum amount of insurance which is available under the Flood Disaster Protection Act of 1973, as amended. If the cost of any insurance described above is not borne by the Mortgagor, the Servicer or shall promptly make a Servicing Advance for such costs, subject to Section 3.03(c).
(e) During all such times as any REO Property shall be located in a federally designated special flood hazard area, the Special Servicer will cause to be maintained, to the extent available at commercially reasonable rates (as determined by the Special Servicer in accordance with the Servicing Standard), a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration in an amount representing coverage not less than the maximum amount of insurance which is available under the Flood Disaster Protection Act of 1973, as amended. The cost of any such flood insurance with respect to an REO Property shall be deemed an expense of the Trust payable out of the related REO Account pursuant to have complied with Section 3.16(c) or, if the foregoing provision if an Affiliate thereof has such fidelity bond coverage andamount on deposit therein is insufficient therefor, paid by the terms of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer or the Special ServicerTrustee or Fiscal Agent, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long applicable, as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaa Servicing Advance.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer (with respect to Mortgage Loans other than Specially Serviced Mortgaged Loans) and the Special Servicer (with respect to Specially Serviced Mortgage Loans) shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard; and provided further that, if and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, extent that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisora Mortgage so permits, the Special Servicer will not related Mortgagor shall be required to do so. If any such approval obtain the required insurance coverage from Qualified Insurers that have a general policy rating of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer at least A:X in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyA.M. Best's Key Rating Guide. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with also cause to be maintained for each REO Property no less insurance coverage than was previously required of the Servicing Standard, to maintain with Mortgagor under the related Mortgage; provided that all such insurance shall be obtained from Qualified Insurers having the Required Claims-Paying Ratings (a) that, if they are providing casualty insurance, shall have a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period rating of at least twelve "A" from both Rating Agencies (12) monthsor solely Standard & Poor's, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall such insurer is not be required in any event to maintain or obtain the insurance coverage otherwise described rated by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing StandardDCR). All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, Loans) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee, and shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and the terms of the related Mortgage and in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claimsa claims-Paying Ratingspaying rating of "A" or better from both Rating Agencies (or solely Standard & Poor's, if such insurer is not rated by DCR), and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as part of the Trust Fund) keep in force with Qualified Insurers having a Qualified Insurer having the Required Claimsclaims-Paying Ratings, paying rating of "A" or better from both Rating Agencies a fidelity bond in such form and amount as are consistent with would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not adversely affect any rating assigned by either Rating Agency to the Servicing StandardCertificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ ' prior written notice to the Trustee. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers having a claims-paying rating of "A" or better from both Rating Agencies a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not adversely affect any rating assigned by either Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without ten days' prior written notice to the Trustee. For so long as the long-term unsecured debt obligations obligation of the Master Servicer or Special Servicer, as the case may be, are rated "A" or better by both Rating Agencies, such party’s corporaPerson may self-insure with respect to the risks described in this subsection.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Merrill Lynch Mortgage Investors Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Servicer or the case of each Mortgage LoanSpecial Servicer, the Master Servicer as applicable, shall use reasonable its efforts consistent with the Servicing Standard Standards to cause the related Borrower Mortgagor to maintain (including identifying maintain, to the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to by the terms of the related Mortgage Note, or if the Mortgagor does not so maintain, shall itself maintain, for each Mortgage Loan Documents and all insurance coverage as is available at commercially reasonable rates;
(B) if and required under the related Mortgage, except to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way failure of consent, approval or otherwise) as to the insurance provider from whom the related Borrower Mortgagor to do so is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon if any Mortgage permits the holder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Servicer or the Special Servicer’s determination, as applicable, shall impose such insurance requirements as are consistent with the Servicing StandardStandards, that exigent circumstances do not allow provided that, with respect to the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisorimmediately preceding proviso, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trusteeas applicable, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed will be obligated to maintain insurance required under (against property damage resulting from terrorist or that similar acts unless the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such Mortgagor's failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Propertyis an Acceptable Insurance Default. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that Loan. All Insurance Policies maintained by the Servicer or the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall (i) contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, Loans other than REO Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of REO Properties), (ii) be in the name of the Trustee (in the case of insurance maintained in respect of REO Properties), (iii) include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing Mortgaged Property or the REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions, (iv) include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents), (v) be noncancellable without 30 days prior written notice to the insured party (except in the case of nonpayment, in which case such policy shall not be cancelled without 10 days prior notice) and (vi) be issued by a Qualified Insurer authorized under applicable law to issue such Insurance Policies. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies Insurance Policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing StandardStandards and the provisions of the related Mortgage Loan) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c3.05(a), in the case of amounts received in respect of an REO Property. Any cost costs incurred by the Master Servicer or Special Servicer in maintaining any such insurance Insurance Policies in respect of Mortgage Loans (other than REO Properties)
(i) if the Mortgagor defaults on its obligation to do so, shall be advanced by the Servicer as a Servicing Advance and will be charged to the related Mortgagor and (ii) shall not, for purposes hereof, including of calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loan so permit; provided, however, that this sentence shall not limit . Any cost incurred by the rights of the Master Servicer or Special Servicer on behalf in maintaining any such Insurance Policies with respect to REO Properties shall be an expense of the Trust to enforce any obligations payable out of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies REO Account pursuant to this Section 3.07 shall (subject to Section 3.11(h3.16(c) and Section 3.19(b)) be paid byor, and reimbursable toif the amount on deposit therein is insufficient therefor, advanced by the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance. Notwithstanding the foregoing, with respect to the Mortgage Loans which either (x) require the Mortgagor to maintain "all risk" property insurance (and do not expressly permit an exclusion for terrorism) or (y) contain provisions generally requiring the applicable Mortgagor to maintain insurance in types and against such risks as the holder of such Mortgage Loan reasonably requires from time to time in order to protect its interests, the Servicer will be required to (A) actively monitor whether the insurance policies for the related Mortgaged Property contain Additional Exclusions, (B) request the Mortgagor to either purchase insurance against the risks specified in the Additional Exclusions or provide an explanation as to its reasons for failing to purchase such insurance and (C) notify the Special Servicer if any insurance policy contains Additional Exclusions or if any borrower fails to purchase the insurance requested to be purchased by the Servicer pursuant to clause (B) above. If the Special Servicer determines in accordance with the Servicing Standards that such failure is not an Acceptable Insurance Default, the Special Servicer shall notify the Servicer and the Servicer shall cause such insurance to be maintained. Furthermore, the Special Servicer shall inform the Rating Agencies as to such conclusions for those Mortgage Loans that (i) have one of the ten (10) highest outstanding Stated Principal Balances of all of the Mortgage Loans then included in the Trust or (ii) comprise more than 5% of the outstanding stated principal balance of the Mortgage Loans then included in the Trust. During the period that the Special Servicer is evaluating the availability of such insurance, the Servicer will not be liable for any loss related to its failure to require the Mortgagor to maintain such insurance and will not be in default of its obligations as a result of such failure and the Servicer will not itself maintain such insurance or cause such insurance to be maintained.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy Insurance Policy with a Qualified Insurer insuring against fire and hazard losses on all of the Mortgage Loans Loans, including the One Post Office Square Whole Loan, or REO Properties, as applicablethe case may be, required to be serviced and administered hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) Insurance Policy provides protection equivalent to the individual policies otherwise required herein and in required, the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause fire and hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy Insurance Policy may contain a deductible clause (not in excess of a customary amount)clause, in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, Servicer shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a fire and hazard insurance policy Insurance Policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyInsurance Policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with of such loss or losses that would have been covered under the individual policy but are not covered under the blanket Insurance Policy because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (orLoan, including the One Post Office Square Whole Loan, or in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)Standards. The Master In connection with its activities as administrator and Servicer and of the Special Mortgage Loans, the Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it Insurance Policy in a timely fashion in accordance with the terms of such policy.
(c) With respect . The Special Servicer, to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance extent consistent with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust Standards, may maintain, earthquake insurance on REO Properties, provided coverage is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policyavailable at commercially reasonable rates, the Special Servicer shall notify the Master Servicer, cost of which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(dii) The Master If the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by a master single interest or force-placed insurance policy with a Qualified Insurer naming the Servicer or the Special Servicer on behalf of the Trustee as the loss payee, then to the extent such Insurance Policy provides protection equivalent to the individual policies otherwise required, the Servicer or the Special Servicer shall conclusively be deemed to have satisfied its obligation to cause such insurance to be maintained on the related Mortgage Properties and REO Properties. In the event the Servicer or the Special Servicer shall cause any Mortgaged Property or REO Property to be covered by such master single interest or force-placed insurance policy, the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) shall be paid by the Servicer as a Servicing Advance. Such master single interest or force-placed policy may contain a deductible clause, in which case the Servicer or the Special Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such policy had it been maintained, deposit into the Certificate Account from its own funds the amount not otherwise payable under the master single or force-placed interest policy because of such deductible clause, to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan, including the One Post Office Square Whole Loan, or, in the absence of any such deductible limitation, the deductible limitation which is consistent with the Servicing Standards.
(c) Each of the Servicer and the Special Servicer shall each obtain and maintain at all times during its own expense and keep in full force and effect throughout the term of this Agreement (ora blanket fidelity bond and an errors and omissions Insurance Policy with a Qualified Insurer covering the Servicer's and the Special Servicer's, as applicable, officers and employees acting on behalf of the Servicer and the Special Servicer in connection with its activities under this Agreement. Notwithstanding the case foregoing, so long as the long term debt or the deposit obligations or claims-paying ability of the Servicer or the Special Servicer, as applicable, is rated at all times during ▇▇▇▇▇ "▇▇" by ▇▇▇▇▇'▇ and "A" by S&P, the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist Servicer or the Special Servicer, as part of the Trust Fund) keep in force applicable, shall be allowed to provide self-insurance with a Qualified Insurer having the Required Claims-Paying Ratings, respect to a fidelity bond and an Errors and Omissions Insurance Policy. Such amount of coverage shall be in such form and amount as are consistent with the Servicing StandardStandards. The Master Servicer or Special Servicer shall be deemed to have complied with Coverage of the foregoing provision if an Affiliate thereof 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 ServicerServicer under a policy or bond obtained by an Affiliate of the Servicer or the Special Servicer and providing the coverage required by this Section 3.07(c) shall satisfy the requirements of this Section 3.07(c). The Special Servicer and the Servicer will promptly report in writing to the Trustee any material changes that may occur in their respective fidelity bonds, if any, and/or their respective errors and omissions Insurance Policies, as the case may be, and will furnish to the Trustee copies of all binders and policies or certificates evidencing that such bonds, if any, and insurance policies are in full force and effect. The Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c).
(d) At the time the Servicer determines in accordance with the Servicing Standards that any Mortgaged Property is in a federally designated special flood hazard area (and such flood insurance has been made available), the Servicer will use efforts consistent with the Servicing Standards to cause the related Mortgagor (in accordance with applicable law and the terms of the Mortgage Loan documents) to maintain, and, if the related Mortgagor shall default in its obligation to so maintain, shall itself maintain to the extent available at commercially reasonable rates (as determined by the Servicer in accordance with the Servicing Standards and to the extent the Trustee, as mortgagee, has an insurable interest therein), flood insurance in respect thereof, but only to the extent the related Mortgage Loan permits the mortgagee to require such coverage and the maintenance of such coverage is consistent with the Servicing Standards. Such fidelity bond flood insurance shall provide that it may not be canceled without ten (10) days’ prior written notice in an amount equal to the Trustee. So long as lesser of (i) the long-term unsecured debt obligations unpaid principal balance of the Master related Mortgage Loan, and (ii) the maximum amount of insurance which is available under the National Flood Insurance Act of 1968, as amended. If the cost of any insurance described above is not borne by the Mortgagor, the Servicer or shall promptly make a Servicing Advance for such costs.
(e) During all such times as any REO Property shall be located in a federally designated special flood hazard area, the Special ServicerServicer will cause to be maintained, or to the extent available at commercially reasonable rates (as determined by the Special Servicer in accordance with the Servicing Standards), a flood insurance policy meeting the requirements of the current guidelines of the Federal Insurance Administration in an amount representing coverage not less than the maximum amount of insurance which is available under the National Flood Insurance Act of 1968, as amended. The cost of any such party’s corporaflood insurance with respect to an REO Property shall be an expense of the Trust payable out of the related REO Account pursuant to Section 3.16(c) or, if the amount on deposit therein is insufficient therefor, paid by the Servicer as a Servicing Advance.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Jp Morgan Chase Com Mort Sec Corp Ps THR Certs Ser 2003-Ln1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In Each of the Master Servicer (in the case of Mortgage Loans other than Specially Serviced Mortgage Loans) and the Special Servicer (in the case of Specially Serviced Mortgage Loans) shall use reasonable efforts to cause each Mortgagor to maintain in respect of the related Mortgaged Property all insurance coverage as is required under the related Mortgage; provided that if any Mortgage Loanpermits the holder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall use reasonable efforts impose such insurance requirements as are consistent with the Servicing Standard Standard. If a Mortgagor fails to maintain such insurance, the Master Servicer (at the direction of the Special Servicer in the case of a Specially Serviced Loan) shall (to the extent available at commercially reasonable terms) obtain such insurance (which may be through a master or single interest policy) and the cost (including any deductible relating to such insurance) of such insurance (or in the case of a master or single interest policy, the incremental cost (including any deductible relating to such insurance) of such insurance relating to the specific Mortgaged Property), shall be a Servicing Advance and shall be recoverable by the Master Servicer pursuant to Section 3.05(a). If at any time a Mortgaged Property is located in an area identified in the Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Federal Emergency Management Agency as having special flood hazards or it becomes located in such area by virtue of remapping conducted by such agency (and flood insurance has been made available), the Master Servicer (or in the case of a Specially Serviced Loan, the Special Servicer) shall, if and to the extent that the Mortgage Loan requires the Mortgagor or permits the mortgagee to require the Mortgagor to do so, use reasonable efforts to cause the related Borrower Mortgagor to maintain (including identifying a flood insurance policy meeting the extent to which a Borrower is maintaining requirements of the current guideline of the Federal Insurance Administration in the maximum amount of insurance coverage andavailable under the National Flood Insurance Act of 1968, if the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of 1994, as amended, unless otherwise specified by the related Mortgage Loan. If
(i) the Mortgagor is required by the terms of the Mortgage Loan to maintain such Borrower does not so maintaininsurance (or becomes obligated by virtue of the related Mortgaged Property becoming located in such area by virtue of such remapping) or (ii) the terms of the Mortgage Loan permit the mortgagee to require the Mortgagor to obtain such insurance, the Master Servicer will itself cause (or in the case of a Specially Serviced Loan, the Special Servicer), shall promptly notify the Mortgagor of its obligation to be maintained with Qualified Insurers having obtain such insurance. If the Required Claims-Paying RatingsMortgagor fails to obtain such flood insurance within 120 days of such notification, the Master Servicer (or in the case of a Specially Serviced Loan, the Special Servicer) for shall obtain such insurance, the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan which shall be a Servicing Advance and (ii) shall be recoverable by the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient Master Servicer or Special Servicer pursuant to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsSection 3.05(a); provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer or Special Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If incur any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, cost if such approval shall be deemed to have been granted. If the Special Servicer is in the process of making Advance would constitute a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyNonrecoverable Servicing Advance. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall also use reasonable efforts, consistent with the Servicing Standard, efforts to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide cause to be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and terms) no less insurance coverage than was previously required of the Mortgagor under the related Mortgage or as is consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer (in the case of Mortgaged Properties) or the Special Servicer (in the case of REO Properties) on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with applicable law, the terms of the related Mortgage Loan documents and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid the outstanding principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence but shall not limit the rights of be recoverable by the Master Servicer or Special Servicer on behalf of the Trust as a Servicing Advance pursuant to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to Section 3.05(a).
(i) If the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) obtains and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintains a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or Mortgaged Properties and/or REO Properties, as applicableProperties for which it is responsible to cause the maintenance of insurance hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related such Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any a Mortgaged Property securing a Mortgage Loan or any an REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by (or into the Master Servicer, Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (Loan, or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket policy maintained by it in a timely fashion in accordance with the terms of such policy.
(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-force placed insurance policy, which provides protection equivalent to the individual policies otherwise required, the Master Servicer or Special Servicer shall conclusively be deemed to have satisfied its respective obligations to cause hazard insurance to be maintained on such Mortgaged Properties and/or REO Properties. Such policy may contain a deductible clause, in which case the Master Servicer or the 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 3.07(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 Certificate Account (or into the Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) 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. 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 master force placed insurance policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard term of this Agreement a blanket fidelity bond and the terms an errors and conditions omissions insurance policy covering its officers and employees and other persons acting on behalf of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard it in connection with any claim its activities under this Agreement and naming the Trustee as an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) additional insured. The amount of coverage shall be (subject at least equal to Section 3.11(h) and Section 3.19(b)) paid bythe coverage that would be required by FNMA or FHLMC, and reimbursable towhichever is greater, with respect to the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be, were servicing and administering the Mortgage Loans and/or REO Properties for which it is responsible hereunder for FNMA or FHLMC. Such fidelity Coverage of the Master Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of such Person and providing the coverage required by this Section 3.07(c) shall provide that it may not satisfy the requirements of this Section 3.07(c).
(d) All insurance coverage required to be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of maintained by the Master Servicer or Special Servicer, as applicable, under this Section 3.07 shall be obtained from Qualified Insurers having a claims paying ability rating (or the obligations of which are guaranteed or backed by a company having such party’s corporaclaims paying ability rating or insurance financial strength rating, as applicable) of not less than (x) A2 by ▇▇▇▇▇'▇ and (y) if rated by FITCH IBCA, "A" by FITCH IBCA (or, if not rated by FITCH IBCA, rated A-IX or better by A.M. Best); provided, however, that the requirements of clauses (x) and (y) shall not be applicable with respect to ▇▇▇▇▇'▇ or FITCH IBCA, as applicable, if the related Rating Agency shall have confirmed in writing that an insurance company with a lower claims paying ability rating shall not result, in and of itself, in a downgrade, qualification or withdrawal of the then current ratings by such Rating Agency of any class of Certificates.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Gmac Commercial Mortgage Securities Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer (with respect to Serviced Loans) and the Special Servicer (with respect to REO Properties) shall use reasonable efforts to require the related Mortgagor to maintain or, consistent with the Servicing Standard and to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled Trust has an insurable interest and the subject coverage, except as provided below with respect to reasonably requireinsurance against terrorist or similar acts, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) , otherwise cause to be maintained for each Mortgaged Property all insurance coverage as is required under the related Mortgage; provided that, if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard; and provided, further, that, if and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, extent that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisora Mortgage so permits, the Special Servicer will not related Mortgagor shall be required to do so. If any such approval of exercise its reasonable best efforts to obtain the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt required insurance coverage from the Master Servicer of the Master Servicer’s determination Qualified Insurers and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation required insurance coverage obtained by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurancefrom Qualified Insurers. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if cost of any such insurance coverage obtained by either the Master Servicer determines that any Borrower has failed or the Special Servicer shall be a Servicing Advance to maintain insurance required under (or that be paid by the Master Servicer has required pursuant to a provision Section 3.03. The Majority Controlling Class Certificateholder may request that entitles earthquake insurance be secured for one or more Mortgaged Properties at the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest expense of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyMajority Controlling Class Certificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, also cause to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan DocumentsMortgage; provided, however, provided that the Special Servicer all such insurance shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardobtained from Qualified Insurers. All such insurance policies maintained as described above by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “"standard” " mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, or Serviced Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (A) the full replacement cost of the improvements on the subject Mortgaged Property or REO Property, as applicable, or (B) the outstanding principal balance owing on the related Serviced Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Serviced Loan documents); (vi) shall 115 include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Serviced Loan document; and (vii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in in, as applicable, the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), or any related Loan Combination Custodial Account, subject to withdrawal pursuant to Section 3.05(e), in the case of amounts received in respect of a Mortgage Serviced Loan, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Serviced Loan, notwithstanding that the terms of such Mortgage the related Serviced Loan so permit; provided. Notwithstanding the foregoing, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) 6.11 and Section 3.19(b)) be paid by6.12, in each case as and reimbursable toif applicable, the Master Servicer or Special Servicer, as applicable, will not be required to maintain, and shall not cause a Mortgagor to be in default with respect to the case may befailure of the related Mortgagor to obtain, fire and extended perils casualty insurance which does not contain any carve-out for terrorist or similar acts, if and only if, the Special Servicer, in consultation with the Controlling Class Representative, has determined in accordance with the Servicing Standard that either (i) such insurance is not available at any rate or (ii) such insurance is not available at commercially reasonably rates and that such hazards are not at the time commonly insured against for properties similar to the subject Mortgaged Property and located in or around the region in which the subject Mortgaged Property is located; provided, however, that the Controlling Class Representative shall not have more than three (3) Business Days to respond to the Special Servicer's request for consultation; and provided, further, that upon the Special Servicer's determination consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Controlling Class Representative, the Special Servicer shall not be required to do so; and provided, further, that, during the period that the Special Servicer is evaluating such insurance hereunder, the Master Servicer shall not be liable for any loss related to its failure to require the Mortgagor to maintain terrorism insurance and shall not be in default of its obligations hereunder as a Servicing Advanceresult of such failure. The Special Servicer shall promptly notify the Master Servicer of each determination under this paragraph.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-force placed policy insuring against hazard losses on all of the Mortgage Serviced Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties and/or REO Properties. The Master Servicer and the Special Servicer shall bear the cost of any premium payable in respect of such blanket policy (other than blanket policies specifically obtained for Mortgaged Properties or REO Properties) without right of reimbursement; provided that if the Master Servicer or the Special Servicer, as applicablethe case may be, causes any Mortgaged Property or REO Property to be covered by such blanket policy, the incremental costs of such insurance applicable to such Mortgaged Property or REO Property shall constitute, and be reimbursable as, a Servicing Advance to the extent that, except with respect to an REO Property, such blanket policy provides insurance that the related Mortgagor has failed to maintain. Such a blanket policy or master force-force placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by (or, in the Master Servicercase of a Loan Combination Mortgaged Property or any Loan Combination REO Property, into the related Loan Combination Custodial Account), in accordance with Section 3.04, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket policy or master force-force placed policy in connection with such loss or losses policy, as the case may be, because of such deductible clause clause, to the extent that any the amount of such deductible exceeds the deductible limitation that pertained to permitted under the related Mortgage Loan (documents or, in if the absence related Mortgage Loan documents are silent regarding a permitted deductible, to the extent the amount of any such deductible limitation, the deductible limitation under the blanket policy or force placed policy, as the case may be, exceeds a customary deductible for an the particular type of individual policy which is consistent with the Servicing Standard)hazard insurance policy. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and CertificateholdersCertificateholders (and, in the case of a Loan Combination, the related Non-Trust Loan Noteholder(s)), claims under any such blanket policy or master force-force placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without for ten (10) days’ prior ' written notice to the TrusteeTrustee prior to any cancellation. So long as the long-term unsecured debt obligations Each of the Master Servicer or and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification, downgrade or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten (10) days' written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c).
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Citigroup Commercial Mortgage Trust 2006-C4)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case Each of each Mortgage Loan, the Master Servicer shall and the Special Servicer shall, as to those Mortgage Loans it is obligated to service hereunder, use reasonable its best efforts consistent in accordance with the Servicing Standard to cause the related Borrower Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower the related Mortgagor is required by the terms of the related Mortgage Loan and does not so maintain, the Master Servicer will (even in the case of Specially Serviced Mortgage Loans) shall itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property maintain (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal subject to the lesser provisions of (i) the full replacement cost of improvements securing such Mortgage Loan this Agreement regarding Nonrecoverable Advances, and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, further subject to applicable lawSection 3.11(h) hereof), under to the related Mortgage Loan Documents; provided that all extent the Trustee, as mortgagee on behalf of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant Certificateholders, has an insurable interest and to the terms of the related Mortgage Loan Documents and is extent available at commercially reasonable rates;
) all insurance coverage as is required under the related Mortgage (B) subject to applicable law); provided that if and any Mortgage permits the holder thereof to dictate to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to Mortgagor the insurance provider from whom the related Borrower is coverage to obtain the requisite insurance coveragebe maintained on such Mortgaged Property, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trusteeas appropriate, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain shall impose such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, requirements as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and are consistent with the Servicing Standard. The Special Servicer shall cause to be maintained for each REO Property, in each case with an insurer that possesses the Required Ratings at the time such policy is purchased and to the extent available at
(a) All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, the Mortgaged Properties) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties) on behalf of the Trustee, shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer Servicer, as applicable, in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bi) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintain a blanket policy or master force-placed policy insuring against hazard losses on any or all of the Mortgage Loans Mortgaged Properties (in the case of the Master Servicer) or REO Properties, as applicableProperties (in the case of the Special Servicer), then, to the extent such policy (Ai) is obtained from a Qualified Insurer having that possesses the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable, so covered, and the premium costs thereof shall be, if and to the extent they are specifically attributable either to a specific Mortgaged Property during any period that the related Mortgagor has failed to maintain the hazard insurance required under the related Mortgage Loan in respect of such Mortgaged Property or to a specific REO Property, a Servicing Advance reimbursable pursuant to and to the extent permitted under Section 3.05(a); provided that, to the extent that such premium costs are attributable to properties other than Mortgaged Properties and/or REO Properties or are attributable to Mortgaged Properties as to which the hazard insurance required under the related Mortgage Loan is being maintained, they shall be borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder Property, as applicable, a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyproperty specific policy (taking into account any deductible clause that would have been permitted therein), promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds (without any right of reimbursement from the Trust, reimbursement) the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such losses up to the difference between the amount of the deductible clause to in such blanket policy and the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or, in the absence amount of any deductible clause that would have been permitted under such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)property specific policy. The Master Servicer and the Special Servicer shall each agree to prepare and present, on behalf of itself, the Trustee and the Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cii) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if If the Master Servicer has actual knowledge shall cause any Mortgaged Property or the Special Servicer shall cause any REO Property to be covered by a master single interest insurance policy naming the Master Servicer or the Special Servicer, as applicable, on behalf of any event the Trustee as the loss payee, then to the extent such policy (an “Insured Environmental Event”i) giving rise is obtained from a Qualified Insurer that possesses the Required Ratings and (ii) provides protection equivalent to a claim under an Environmental Insurance Policythe individual policies otherwise required, the Master Servicer shall notify or the Special Servicer Servicer, as applicable, shall conclusively be deemed to have satisfied its obligation to cause such effect and insurance to be maintained on such Mortgaged Property (in the case of the Master Servicer) or REO Property (in the case of the Special Servicer). If the Master Servicer shall take reasonable actions cause any Mortgaged Property as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect related Mortgagor has failed to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policymaintain the required insurance coverage, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, or the Special Servicer shall notify cause any REO Property, to be covered by such master single interest insurance policy, then the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions incremental costs of such Environmental Insurance Policy insurance applicable to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each such Mortgaged Property or REO Property that (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether covered thereby) paid by the Master Servicer or the Special Servicer, as applicable, shall constitute a Servicing Advance. The Master Servicer shall, consistent with the Servicing Standard and the terms of the related Mortgage Loan documents, pursue the related Mortgagor for the amount of such incremental costs. All other costs associated with any such master single interest insurance policy (including, without limitation, any minimum or standby premium payable for such policy) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, borne by the Master Servicer or Special Servicer, as the case may be, without right of reimbursement. Such master single interest insurance policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as applicable, shall, in the event that there shall not have been maintained on the related Mortgaged Property or REO Property, as the case may be, a policy otherwise complying with the provisions of Section 3.07(a), and there shall have been one or more losses which would have been covered by such property specific policy had it been maintained, promptly deposit into the Certificate Account from its own funds (without right of reimbursement) the amount not otherwise payable under the master single interest 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 any such deductible limitation, the deductible limitation which is consistent with the Servicing AdvanceStandard.
(dc) The Each of the Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having recognized insurers that possess the Required Claims-Paying Ratings, Ratings a fidelity bond in such form and amount as are consistent with would permit it to be a qualified ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Each of the Servicing Standard. The Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) 30 days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations In addition, each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement keep in force with recognized insurers that possess the Required Ratings a policy or Special Servicerpolicies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its obligation to service the Mortgage Loans for which it is responsible hereunder, which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac seller-servicer of multifamily mortgage loans. Any such errors and omissions policy shall provide that it may not be canceled without 30 days' prior written notice to the Trustee.
(d) All insurance coverage required to be maintained under this Section 3.07 shall be obtained from Qualified Insurers.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts (with respect to Mortgage Loans other than Specially Serviced Mortgaged Loans) and the Special Servicer (with respect to Specially Serviced Mortgage Loans) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not exercise such discretion in a manner consistent with the Servicing Standard with a view towards requiring business interruption or rental interruption coverage for 12 months; and provided further that, if and to the extent that a Mortgage so permits, the related Mortgagor shall be required to maintain insurance other than what is available exercise its reasonable best efforts to obtain the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty required insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific from Qualified Insurers and required insurance coverage with respect to damages or casualties caused obtained by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, be from Qualified Insurers. The cost of any such insurance upon terms not materially less favorable than those in place as of coverage obtained by either the Closing Date, unless Master Servicer or the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the shall be a Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar Advance to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from paid by the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available pursuant to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insuranceSection 3.03. The Master Servicer shall notify Majority Subordinate Certificateholder may request that earthquake insurance be secured for one or more Mortgaged Properties at the Special Servicer, the Trustee, the Subordinate Class Representative and expense of the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyCertificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, also cause to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan DocumentsMortgage; provided, however, provided that the Special Servicer all such insurance shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardobtained from Qualified Insurers. All such insurance policies maintained as described above (i) shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “"standard” " mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, or Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; and (iv) in each case such insurance shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, Loan or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or Loans, and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without for ten (10) days’ prior ' written notice to the TrusteeTrustee prior to any cancellation. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification, downgrade or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten days' written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct or indirect parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (First Union Com Mor Sec Inc Com Mor Pass THR Cer Ser 2001-C1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Master Servicers, with respect to each of the case Mortgage Loans, including Specially Serviced Mortgage Loans, and the Special Servicer, with respect to REO Properties, shall use reasonable efforts, consistent with the Servicing Standard, to cause the Mortgagor to maintain, to the extent required by the terms of the related Mortgage Loan documents, or if the Mortgagor does not maintain, shall itself maintain for each Mortgaged Property all insurance coverage as is required under the related Mortgage; provided that if and to the extent that any such Mortgage Loanpermits the holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance coverage that the related Mortgagor is required to maintain, the Master Servicers shall exercise such discretion in a manner consistent with the Servicing Standard and subject to the terms of this Section 3.07; and provided, further that, if and to the extent that a Mortgage so permits, the applicable Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower Mortgagor to maintain obtain the required insurance coverage from Qualified Insurers and required insurance coverage obtained by the Master Servicers shall be from Qualified Insurers. The cost of any such insurance coverage obtained by either Master Servicer or the Special Servicer shall be a Servicing Advance to be paid by the applicable Master Servicer pursuant to Section 3.03. If not required under the terms of the Mortgage or the Mortgage Loan documents, the Special Servicer may require that earthquake insurance be secured for one or more Mortgaged Properties at the expense of the Trust Fund (including identifying the extent Special Servicer's costs and expenses incurred in obtaining such insurance). Subject to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintainSection 3.17(a), the Master Special Servicer will itself shall also cause to be maintained with Qualified Insurers having for each REO Property no less insurance coverage than was required of the Required Claims-Paying Ratings) for Mortgagor under the related Mortgaged Property Mortgage as of the Closing Date; provided that all such insurance shall be obtained from Qualified Insurers. All such insurance policies maintained by either Master Servicer or the Special Servicer (xi) shall contain (if they insure against loss to property and do not relate to an REO Property) a fire and casualty extended coverage "standard" mortgagee clause, with loss payable to (or naming as an additional insured) the Trustee or the applicable Master Servicer on behalf of the Trustee (and, in the case of a Loan Combination, the related Non-Trust Noteholder(s)) (in the case of insurance maintained in respect of Mortgage Loans); (ii) shall be in the name of the Special Servicer (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party or with respect to non-payment shall be non-cancelable without the insurer providing 10 days' prior notice; (iv) in the case of a hazard insurance policy, which does not provide for reduction due to depreciation, shall include coverage in an amount that is at least equal to not less than the lesser of (ix) the full replacement cost of the improvements securing such Mortgage Loan and a Mortgaged Property or REO Property, as applicable, or (iiy) the outstanding principal balance of such owing on the related Mortgage Loan or REO Loan, butas applicable, and in any event, in an the amount sufficient necessary to avoid the application operation of any co-insurance clause and provisions; (yv) all other insurance coverage shall include a replacement cost endorsement providing no deduction for depreciation (including but unless such endorsement is not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, permitted under the related Mortgage Loan Documentsdocuments); provided (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan documents; (vii) to the extent that the Mortgage or other Mortgage Loan documents specifically require terrorism coverage or the Mortgage requires the related Mortgagor to carry "all of risk" coverage, shall include terrorism coverage, unless the following conditions and/or limitations failure to obtain such terrorism coverage constitutes an Acceptable Insurance Default; and (viii) in each case such insurance shall apply:
(A) be issued by an insurer authorized under applicable law to issue such insurance. Notwithstanding the foregoing, the Master Servicers and the Special Servicer shall not be required to maintain obtain, and shall not be in default hereunder for failing to obtain, (A) any insurance coverage that was previously required of the Mortgagor under the related Mortgage if (a) such insurance is not available at any rate; (b) such insurance is not available from a Qualified Insurer (provided that either Master Servicer or the Special Servicer, as applicable, shall obtain such insurance from the next highest rated insurer offering such insurance at commercially reasonable rates); (c) subject to the prior approval of the Controlling Class Representative (which approval is in any such case deemed granted if not denied within 10 Business Days after its receipt of the applicable Master Servicer's or the Special Servicer's request for such approval), such insurance is not available at commercially reasonable rates and, as determined by the applicable Master Servicer or the Special Servicer following due inquiry conducted in a manner consistent with the Servicing Standard, the subject hazards are not commonly insured against by prudent owners of similar real properties in similar locales (but only by reference to such insurance that has been obtained by such owners at the then current market rates); or (d) the Trustee does not have an insurable interest in the related Mortgaged Property or REO Property or (B) any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such the related Mortgage Loan or on the Closing Date pursuant to the terms of the related Mortgage Loan Documents documents and is available at commercially reasonable rates;
(B) if and , which determination shall be subject to the extent that approval of the Controlling Class Representative. In determining whether any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval insurance coverage is available or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverageavailable at reasonable rates, the applicable Master Servicer shall be entitled to rely, at is own expense, on insurance consultants in making such determination and any such determinations by the applicable Master Servicer must be made not less frequently (to the extent consistent with but need not be made more frequently) than annually (or such other lesser period as may be required by the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required but in any event to maintain or obtain shall be made at the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with approximate date on which the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the applicable Master Servicer on behalf receives notice of the Trusteerenewal, in the case replacement or cancellation of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertycoverage. Any amounts collected by the either Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the applicable Master Servicer's Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage LoanLoan (other than a Loan Combination), or in the related Loan Combination Custodial Account, subject to withdrawal pursuant to Section 3.05(e), in the case of amounts received in respect of a Loan Combination, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the either Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided. Notwithstanding the foregoing, howeverwith respect to the Mortgage Loans which either (x) require the Mortgagor to maintain "all risk" property insurance (and do not expressly permit an exclusion for terrorism) or (y) contain provisions generally requiring the applicable Mortgagor to maintain insurance in types and against such risks as the holder of such Mortgage Loan reasonably requires from time to time in order to protect its interests, that this sentence shall not limit the rights of the applicable Master Servicer or Special Servicer on behalf of will be required to (A) use reasonable efforts to monitor whether the Trust to enforce any obligations of insurance policies for the related Borrower under Mortgaged Property contain Additional Exclusions, (B) request the Mortgagor to either purchase insurance against the risks specified in the Additional Exclusions or provide an explanation as to its reasons for failing to purchase such Mortgage Loan. Costs to the Master Servicer or insurance and (C) notify the Special Servicer of maintaining if any insurance policies policy contains Additional Exclusions or if any Mortgagor fails to purchase the insurance requested to be purchased by such Master Servicer pursuant to this Section 3.07 shall clause (subject to Section 3.11(hB) and Section 3.19(b)) be paid by, and reimbursable toabove. If the Special Servicer determines in accordance with the Servicing Standard that such failure is not an Acceptable Insurance Default, the Special Servicer shall notify the applicable Master Servicer and such Master Servicer shall cause such insurance to be maintained. Furthermore, the Special Servicer shall inform the Rating Agencies as to such conclusions for those Mortgage Loans that (i) have one of the 10 highest outstanding Stated Principal Balances of all of the Mortgage Loans then included in the Trust Fund or (ii) comprise more than 5% of the outstanding Stated Principal Balance of the Mortgage Loans then included in the Trust Fund (and, if a Loan Combination satisfies clause (i) and/or clause (ii), the Special ServicerServicer shall also inform the related Non-Trust Noteholder(s) as to such conclusion). During the period that the Special Servicer is evaluating the availability of such insurance, as the case may be, applicable Master Servicer will not be liable for any loss related to its failure to require the Mortgagor to maintain such insurance and will not be in default of its obligations as a Servicing Advanceresult of such failure and such Master Servicer will not itself maintain such insurance or cause such insurance to be maintained.
(b) If (i) the either Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the such Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties. In the event that the Special Servicer causes any REO Property to be covered by such blanket policy, the incremental cost of such insurance applicable to such REO Property (other than any minimum or standby premium payable for such policy whether or not any REO Property is covered thereby) shall be paid by the applicable Master Servicer as applicablea Servicing Advance pursuant to Section 3.03. Such a blanket policy or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the applicable Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the its Collection Account maintained by (or, in the Master Servicercase of a Loan Combination Mortgaged Property or any Loan Combination REO Property, into the related Loan Combination Custodial Account) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket policy or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any the amount of such deductible exceeds the deductible limitation that pertained to permitted under the related Mortgage Loan documents (oror if the related Mortgage Loan documents are silent regarding a permitted deductible, in the absence of any such a deductible limitation, the deductible limitation for an individual policy which that is consistent with the Servicing Standard). The applicable Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholdersthe Certificateholders (and, in the case of a Loan Combination, the related Non-Trust Noteholder(s)), claims under any such blanket policy or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer Servicers and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount (determined by reference to the size of its servicing portfolio of commercial and multifamily mortgage loans) as are consistent with would either permit it to be a qualified FNMA or FHLMC (whichever is greater) seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause an Adverse Rating Event (as evidenced in writing from each Rating Agency). Each of the Servicing Standard. The Master Servicer or Servicers and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms of such fidelity bond, the coverage afforded thereunder extends to the subject Master Servicer or the Special Servicer, as the case may be. Such fidelity bond Each of the Master Servicers and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount (determined by reference to the size of its servicing portfolio of commercial and multifamily mortgage loans) as would either permit it to be a qualified FNMA or FHLMC (whichever is greater) seller-servicer of multifamily mortgage loans, or in such other form and amount as would not result in an Adverse Rating Event (as evidenced in writing from each Rating Agency). Each of the Master Servicers and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the subject Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without ten (10) for 10 days’ prior ' written notice to the TrusteeTrustee prior to cancellation. So Each Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the either Master Servicer or the Special Servicer (or in the case of each initial Master Servicer and Special Servicer, their respective direct parent) are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in an Adverse Rating Event, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this Section 3.07.
(d) Within 90 days of the Closing Date, with respect to each of the Mortgage Loans identified on Schedule II as being covered by an environmental insurance policy, the applicable Master Servicer (or the Special Servicer in the case of a Specially Serviced Mortgage Loan) shall notify the insurer under such environmental insurance policy and take all other action necessary for the Trustee, on behalf of the Certificateholders (and in the case of a Loan Combination, the related Non-Trust Noteholder(s)),
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Merrill Lynch Mortgage Trust 2006-C1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer (with respect to Mortgage Loans other than Specially Serviced Mortgaged Loans) and the Special Servicer (with respect to Specially Serviced Mortgage Loans) shall use each exercise its reasonable best efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard; and provided further that, if and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, extent that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisora Mortgage so permits, the Special Servicer will not related Mortgagor shall be required to do so. If any such approval exercise its reasonable best efforts to obtain the required insurance coverage from Qualified Insurers that have a general policy rating of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer at least A-X in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insuranceA.M. Best's Key Rating Guide. The Master Servicer shall notify Majority Subordinate Certificateholder may request that earthquake insurance be secured for one or more Mortgaged Properties at the Special Servicer, the Trustee, the Subordinate Class Representative and expense of the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyCertificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with also cause to be maintained for each REO Property no less insurance coverage than was previously required of the Servicing Standard, to maintain with Mortgagor under the related Mortgage; provided that all such insurance shall be obtained from Qualified Insurers having the Required Claims-Paying Ratings (a) that, if they are providing casualty insurance, shall have a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period claims paying ability rating of at least twelve "A," "A" and "A" from Standard & Poor's, DCR (12if then rated by DCR) monthsand Fitch (if then rated by Fitch), respectively (or solely Standard & Poor's, if such insurer is not rated by DCR or Fitch) or such lower rating as will not result in each case if so required pursuant qualification, downgrading or withdrawal of the ratings then assigned to the related Mortgage Loan Documents; providedCertificates, however, that as evidenced in writing by the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing StandardRating Agencies. All such insurance policies maintained as described above shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage LoanLoans), or and shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; in each case such insurance shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and the terms of the related Mortgage and in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having a claims-paying rating of "A," "A" and "A" or better from Standard & Poor's, DCR and Fitch, respectively (or solely Standard & Poor's, if such insurer is not rated by DCR and Fitch) or such lower rating of any Rating Agency or rating from any nationally recognized statistical rating agency as will not result in qualification, downgrading or withdrawal of the Required Claims-Paying Ratingsratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with Qualified Insurers a Qualified Insurer fidelity bond issued by an insurer having a claims-paying rating of "A," "A" and "A" or better from Standard & Poor's, DCR (if then rated by DCR) and Fitch (if then rated by Fitch), respectively or such lower rating of any Rating Agency or rating from a nationally recognized statistical rating agency as will not result in qualification, downgrading or withdrawal of the Required Claims-Paying Ratingsratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies, a fidelity bond in such form and amount as are consistent with would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by either Rating Agency to the Certificates (as evidenced in writing from each Rating Agency); and provided that the Master Servicer's current fidelity insurer, Aetna Casualty and Surety Company, shall be deemed to satisfy the requirements of this section so long as it has a claims-paying rating of "A" or better from Standard & Poor's. The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without for ten (10) days’ prior ' written notice to the TrusteeTrustee prior to any cancellation. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers having a claims-paying rating of "A," "A" and "A" or better from Standard & Poor's, DCR (if then rated by DCR) and Fitch (if then rated by Fitch), or such lower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies, respectively, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, or which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not adversely affect any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten days' written notice to the Trustee prior to cancellation. Notwithstanding the foregoing, the Master Servicer's current errors and omissions insurer, Lloyd's of London, shall be deemed (only with respect to the first 70 days following the Closing Date) to satisfy the requirements of this Section and, within 70 days following the Closing Date, the Master Servicer shall procure an errors and omission insurance policy with a Qualified Insurer satisfying the ratings requirements of this Section 3.07(c); provided, however, that the Master Servicer shall not be required to procure an error and omissions policy with a Qualified Insurer satisfying the ratings requirements of this Section 3.07(c), if prior to the expiration of such 70 day period, Standard & Poor's confirms in writing to the Trustee that Lloyd's of London is deemed to satisfy the requirements of this Section 3.07(c). The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct or indirect parent), are rated "A" or better by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Merrill Lynch Mortgage Investors Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Property Manager (other than with respect to Specially Serviced Assets) and the case of each Mortgage Loan, the Master Special Servicer (with respect to Specially Serviced Assets) shall use reasonable efforts consistent in accordance with the Servicing Standard to cause the related Borrower Obligor to maintain (including identifying the extent to which a Borrower is maintaining for each Mortgaged Property all insurance coverage and, if such Borrower does not so maintain, as is required under the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance terms of such Lease or Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage as applicable (including but not limited to coverage for damage resulting from acts the avoidance of terrorism) as is required or doubt, any Environmental Policy); provided, that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants such Lease permits the lender lessor thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Obligor is required to obtain the requisite insurance coveragemaintain, the Master Servicer Property Manager or the Special Servicer, as the case may be, shall (to the extent exercise such discretion in a manner consistent with the Servicing Standard) use efforts consistent , with a view towards requiring insurance comparable to that required under other similar Leases or Mortgage Loans with express provisions governing such matters; and provided, further, that, if and to the Servicing Standard to cause extent that a Lease or Mortgage Loan so permits, the related Borrower Obligor shall be required to obtain the requisite required insurance coverage from Qualified Insurers thatthat have a claims-paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide. If such Obligor does not maintain the required insurance or, with respect to any Environmental Policy in each caseplace as of the related Series Closing Date or Transfer Date, have the Required Claims-Paying Ratings at the time Property Manager will itself cause such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or with Qualified Insurers; provided, that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer Manager shall not be required to maintain such insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to Indenture Trustee (as mortgagee of record on behalf of the related Mortgaged Property (iNoteholders) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist have an insurable interest or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer Property Manager has determined (in its reasonable judgment based on inquiry consistent in accordance with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (ai) such insurance is not available at a commercially reasonable rates rate and that such the subject hazards are not at the time not commonly insured against for by prudent owners of properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, located or (bii) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Propertyrate. Subject to Sections Section 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall also use reasonable effortsefforts to cause to be maintained for each REO Property no less insurance coverage than was previously required of the Obligor under the related Mortgage or Lease and at a minimum, consistent (i) hazard insurance with the Servicing Standarda replacement cost rider and (ii) comprehensive general liability insurance, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciationin each case, in an amount that is at least equal to customary for the lesser type and geographic location of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard; provided, that all such insurance shall be obtained from Qualified Insurers that, if they are providing casualty insurance, shall have a claims-paying ability rated at least “A-:VIII” by A.M. Best’s Key Rating Guide. The cost of any such insurance coverage obtained by either the Property Manager or the Special Servicer shall be a Property Protection Advance to be paid by the Property Manager. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf Property Manager, as agent of and for the account of the applicable Issuer and the Indenture Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer Property Manager or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerTenant, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account 2.11 of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing AdvanceIndenture.
(b) The Property Manager or Special Servicer may satisfy its obligations under Section 3.07(a) by obtaining, maintaining or causing to be maintained a blanket or forced place insurance policy. If (i) applicable, the Master Servicer Property Manager or the Special Servicer shall obtain and maintain, or cause to be obtained and maintainedmaintained on behalf of each applicable Issuer, a master forced place insurance policy or a blanket policy (or master force-placed policy an endorsement to an existing policy) insuring against hazard losses (not otherwise insured by a Tenant or Borrower due to a default by such Tenant or Borrower under the insurance covenants of its Lease or Mortgage Loan or because a Tenant or Borrower permitted to self-insure fails to pay for casualty losses) on all of the Mortgage Loans or REO Propertiesapplicable Mortgaged Properties that it is required to service and administer, as applicable, then, to the extent such which policy shall (Ai) is be obtained from a Qualified Insurer having the Required Claimsa claims-Paying Ratingspaying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, and (Bii) provides provide protection equivalent to the individual policies otherwise required herein under Section 3.07(a). The Property Manager and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer shall bear the cost of any premium payable in respect of any such blanket policy (other than blanket policies specifically obtained for Mortgaged Properties or its corporate parentREO Properties) has long-term unsecured debt obligations without right of reimbursement; provided, that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and if the Master Servicer Property Manager or the Special Servicer, as the case may be, self-insures for its obligation causes any Mortgaged Property or REO Property to maintain the individual policies otherwise requiredbe covered by such blanket policy, the Master Servicer incremental costs of such insurance applicable to such Mortgaged Property or REO Property shall constitute, and be reimbursable as, a Property Protection Advance to the extent that, except with respect to an REO Property, such blanket policy provides insurance that the related Borrower or Tenant, as applicable, has failed to maintain. If the Property Manager or Special Servicer, as the case may beapplicable, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance causes any Mortgaged Property or REO Property to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such covered by a blanket or master force-placed insurance policy, the incremental costs of such insurance applicable to such Mortgaged Property or REO Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property or REO Property is covered thereby) shall be paid as a Property Protection Advance. Such policy may contain a deductible clause (not in excess of a customary amount), ) in which case the Master Servicer Property Manager or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), ) and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and Property Manager or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Indenture Trustee and Certificateholdersthe applicable Issuer, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy. Any payments on such policy shall be made to the Property Manager as agent of and for the account of the applicable Issuer, the Noteholders and the Indenture Trustee.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance PolicyProperty Manager, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer Back-Up Manager shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or REO Properties Assets exist as part of the Trust FundCollateral) keep in force with a Qualified Insurer having the Required Claims-Paying Ratingsa claims paying ability rated at least “A:VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a fidelity bond in such form and amount as are consistent with would not adversely affect any rating assigned by any Rating Agency to the Servicing StandardNotes without giving effect to any Insurance Policy (as evidenced in writing from each Rating Agency). The Master Servicer or Each of the Property Manager and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms of such fidelity bond, the coverage afforded thereunder extends to the Master Servicer Property Manager or the Special Servicer, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the TrusteeIssuers and each Insurer. So long as the long-term unsecured debt obligations Each of the Master Property Manager, the Special Servicer or and the Back-up Manager shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Assets exist as part of the Collateral) also keep in force with a Qualified Insurer having a claims-paying ability rated at least “A: VIII” by A.M. Best’s Key Rating Guide and at least “A” by S&P, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall name the Indenture Trustee as an additional insured and shall be in such partyform and amount as would not adversely affect any rating assigned by any Rating Agency to the Notes without giving effect to any Insurance Policy (as evidenced in writing from each Rating Agency). Each of the Property Manager and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Property Manager or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without ten (10) days’ prior written notice to the Issuers and each Insurer. Each of the Property Manager and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Assets exist as part of the Collateral) also, on behalf of the Issuers, keep in force with a Qualified Insurer having a claims-paying ability rated at least “A:VIII” by A.M. Best’s corporaKey Rating Guide and at least “A” by S&P, a lessor’s general liability insurance policy or policies, which policy or policies shall be in such form and amount as would not adversely affect any rating assigned by any Rating Agency to the Notes without giving effect to any Insurance Policy (as evidenced in writing from each Rating Agency). Any such general liability insurance policy shall provide that it may not be canceled without ten (10) days’ prior written notice to the Issuers, each Insurer and the Indenture Trustee. Any payments on such policy shall be made to the Property Manager as agent of and for the account of any applicable Issuer and the Indenture Trustee. If the Property Manager (or its corporate parent), the Special Servicer (or its corporate parent) or the Back-Up Manager (or its corporate parent), as applicable, are rated not lower than “A2” by ▇▇▇▇▇’▇, “A” by S&P and “A” by Fitch (or each Insurer consents in writing), the Property Manager, the Special Servicer or the Back-Up Manager, as applicable, may self-insure with respect to any insurance coverage or fidelity bond coverage required hereunder, in which case it shall not be required to maintain an insurance policy with respect to such coverage; provided, that Spirit Finance may not self-insure with respect to any such insurance coverage or fidelity bond.
Appears in 1 contract
Sources: Property Management and Servicing Agreement (Spirit Finance Corp)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the Each Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause each Borrower with respect to the related Borrower Mortgage Loans for which it acts as Master Servicer to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage maintain, and, if such the Borrower does not so maintain, the such Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) maintained, for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due including each Mortgaged Property relating to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such any Specially Serviced Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably requirerequired, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower is required to obtain the requisite insurance coveragemaintain, the such Master Servicer shall (to the extent exercise such discretion in a manner consistent with the Servicing Standard) use efforts consistent , with a view towards requiring insurance comparable to that required under other Mortgage Loans with express provisions governing such matters and, in any event, business interruption or rental loss insurance for at least 12 months; and provided, further, that, if and to the Servicing Standard to cause extent that any such Mortgage so permits, the related Borrower shall be required to obtain the requisite required insurance coverage from Qualified Insurers that, in each case, have a financial strength or claims-paying rating no lower than two rating categories below the Required Claimshighest rated Certificates outstanding, and in any event no lower than "A" from S&P and "A2" from Mo▇▇▇'▇ (or in such other form and amount or issued by an insurer with such other financial strength or claims-Paying Ratings at paying ability as would not, as confirmed in writing by the time relevant Rating Agency, result in an Adverse Rating Event); and provided, further, that such Master Servicer shall be required to maintain such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under upon the related Mortgage Loan Documents;
(D) in no event shall Borrower's failure to do so only to the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage extent that the Master Servicer has determined is either (i) not available at any rate or the Trustee as mortgagee has an insurable interest, (ii) not such insurance is available at commercially reasonable rates (as determined by the applicable Master Servicer and approved by the Controlling Class Representative) and (iii) any related hazards are not at Servicing Advance is deemed by the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the applicable Master Servicer to cause be recoverable from collections on the Borrower to maintain insurance related Mortgage Loan; provided, that if such Servicing Advance is deemed nonrecoverable the applicable Master Servicer (or, at the direction of the applicable Special Servicer if a Specially Serviced Mortgage Loan or an REO Property is involved) shall be conducted pay such amounts out of the applicable Collection Account provided, further, that the applicable Master Servicer (or the applicable Special Servicer, if a Specially Serviced Mortgage Loan or an REO Property is involved) has determined in accordance with the Servicing Standard that making such payment is in the best interests of the Certificateholders (as a manner that takes into account the insurance that would then be available collective whole), as evidenced in each case by any Officer's Certificate delivered promptly to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintainTrustee, the Master Depositor and the Controlling Class Representative, setting forth the basis for such determination and accompanied by any information that such Person may have obtained that supports such determination. Subject to Section 3.17(b), each Special Servicer shall not also cause to be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain maintained for each REO Property with respect to the related Mortgaged Property (i) specific casualty Mortgage Loans for which it acts as Special Servicer no less insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not extent available at commercially reasonable rates and that such hazards are not at (as determined by the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (bControlling Class Representative)) such insurance is not available at any rate (failure to maintain than was previously required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b)and, and/or 3.24at a minimum, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full hazard insurance with a replacement cost of improvements at such REO Property or rider, (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve 12 months, and (12iii) monthscommercial general liability insurance, in each case if so required pursuant to case, in an amount customary for the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates type and geographic location of such REO Property and consistent with the Servicing Standard; provided that all such insurance shall be obtained from Qualified Insurers that, in each case, shall have a financial strength or claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than "A" from S&P and "A2" from Mo▇▇▇'▇ (or in such other form and amount or issued by an insurer with such other financial strength or claims-paying ability as would not, as confirmed in writing by the relevant Rating Agency, result in an Adverse Rating Event). All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the applicable Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage LoanLoans), or shall name the Trustee as the insured, with loss payable to the applicable Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of REO Properties), and shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance. Any amounts collected by the a Master Servicer or the a Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04or any related A/B Loan Pair Custodial Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the a Master Servicer or a Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the applicable Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the a Master Servicer or the a Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, by and reimbursable to, the to such Master Servicer or Special Servicer, as the case may be, as a Servicing Advance. Subject to the preceding paragraph, the applicable Master Servicer shall use reasonable efforts to cause the Borrower to maintain or, if the Borrower does not so maintain, the applicable Master Servicer will maintain all-risk casualty insurance or extended coverage insurance (with special form coverage) (the cost of which will be payable as a Servicing Advance), which does not contain any carve-out for terrorist or similar acts; provided, however, the applicable Master Servicer shall not require any Borrower to obtain or maintain insurance in excess of the amounts of coverage and deductibles required by the related Mortgage Loan Documents or the related Mortgage Loan Seller in connection with the origination of a Mortgage Loan unless such Master Servicer determines, in accordance with the Servicing Standard, that such insurance required at origination would not be prudent for Mortgaged Property of the same type as the related Mortgaged Property. The applicable Master Servicer shall not be required to call a default under a Mortgage Loan if the related Borrower fails to maintain such insurance, and the applicable Master Servicer shall not be required to maintain such insurance, to the extent, if any, that the cost of such insurance exceeds the maximum cost that the related Borrower is required to incur under the related Mortgage Loan Documents, or if the applicable Master Servicer has determined in accordance with the Servicing Standard that either (i) such insurance is not available at commercially reasonable rates or that such hazards are not at the time commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which such Mortgaged Property is located (which determination shall be subject to the approval of the Controlling Class Representative), or (ii) such insurance is not available at any rate.
(b) If (i) the a Master Servicer or the a Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-force placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having a financial strength or claims-paying rating no lower than "A" from S&P and "A2" from Mo▇▇▇'▇ ▇r having such other financial strength or claims-paying ability rating as would not, as confirmed in writing by the Required Claims-Paying Ratingsrelevant Rating Agency, result in an Adverse Rating Event, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the required, such Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the applicable Master Servicer or the applicable Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-force placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The applicable Master Servicer and or the applicable Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-force placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With Promptly after (but in no event more than 30 days after) the Closing Date, with respect to each Performing of the Mortgage Loan that is subject to Loans for which it acts as Master Servicer covered by an Environmental Insurance Policy, if each Master Servicer shall notify the insurer under such Environmental Insurance Policy and take all other action necessary for the Trustee, on behalf of the Certificateholders, to be an insured (and for such Master Servicer, on behalf of the Trust, to make claims) under such Environmental Insurance Policy. In the event that a Master Servicer has actual knowledge of any event (an “"Insured Environmental Event”") giving rise to a claim under an any Environmental Insurance PolicyPolicy in respect of any Mortgage Loan covered thereby, the such Master Servicer shall notify shall, in accordance with the Special Servicer to terms of such effect Environmental Insurance Policy and the Master Servicer Servicing Standard, timely make a claim thereunder with the appropriate insurer and shall take reasonable such other actions as are in accordance with the Servicing Standard and the terms and conditions of which are necessary under such Environmental Insurance Policy in order to make a claim thereunder and achieve realize the payment full value thereof for the benefit of all amounts to which the Trust is entitled thereunderCertificateholders. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer If any other party hereto has actual knowledge of an Insured Environmental Event with respect to any event giving rise to a claim under Mortgage Loan covered by an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve this Agreement, such party shall promptly so notify the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunderapplicable Master Servicer. Any legal fees fees, premiums or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any such claim under an Environmental Insurance Policy described above (whether shall be paid by the applicable Master Servicer or the Special Servicer) and shall be (subject reimbursable to Section 3.11(h) and Section 3.19(b)) paid byit as a Servicing Advance. With respect to each Environmental Insurance Policy that relates to one or more Mortgage Loans serviced by a Master Servicer, and reimbursable to, the such Master Servicer shall review and familiarize itself with the terms and conditions relating to enforcement of claims and shall monitor the dates by which any claim must be made or any action must be taken under such policy to realize the full value thereof for the benefit of the Certificateholders in the event such Master Servicer has actual knowledge of an Insured Environmental Event giving rise to a claim under such policy. In the event that a Master Servicer receives notice of any termination of any Environmental Insurance Policy that relates to one or more Mortgage Loans for which it acts as Master Servicer, such Master Servicer shall, within five Business Days after receipt of such notice, notify the applicable Special Servicer, the Controlling Class Representative, the Rating Agencies and the Trustee of such termination in writing. Upon receipt of such notice, such Master Servicer shall address such termination in accordance with Section 3.07(a) in the same manner as it would the case may betermination of any other Insurance Policy required under the related Mortgage Loan Documents. Any legal fees, premiums or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with a resolution of such termination of an Environmental Insurance Policy shall be paid by the applicable Master Servicer and shall be reimbursable to it as a Servicing Advance.
(d) The Each Master Servicer and the each Special Servicer shall each at all times during the term of this Agreement (or, in the case of the a Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or or REO Properties as to which it is the applicable Special Servicer exist as part of the Trust Fund) keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the Required Claims-Paying Ratingshighest rated Certificates outstanding, and in any event no lower than "A" from S&P and "A2" from Mo▇▇▇'▇, a fidelity bond in such form and amount as are consistent would permit it to be a qualified Fa▇▇▇▇ ▇a▇ ▇eller-servicer of multifamily mortgage loans (or in such other form and amount or issued by an insurer with such other financial strength or claims-paying ability rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Servicing StandardTrustee by the relevant Rating Agency)). The Each Master Servicer or and each Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage and, by the terms of such fidelity bond, the coverage afforded thereunder extends to the applicable Master Servicer or the applicable Special Servicer, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Each Master Servicer or and each Special Servicer shall at all times during the term of this Agreement (or, in the case of a Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties as to which it is the applicable Special Servicer exist as part of the Trust Fund) also keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than "A" from S&P and "A2" from Mo▇▇▇'▇, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified Fa▇▇▇▇ ▇a▇ ▇eller-servicer of multifamily mortgage loans (or in such other form and amount or issued by an insurer with such other financial strength or claims-paying rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Trustee by the relevant Rating Agency)). Each Master Servicer and each Special Servicer shall be deemed t
Appears in 1 contract
Sources: Pooling and Servicing Agreement (CSFB Mortgage Sec Corp Comm Mort Pass THR Cert Ser 2003-Cnp1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In Subject to the case of each Mortgage Loanfollowing sentence, the Master Servicer shall use its reasonable efforts efforts, consistent with the Servicing Standard Standard, to cause the related Borrower to maintain maintain, for each Mortgage Loan any and all Insurance Policy coverage as is required under the related Mortgage Loan Documents (including identifying the extent to which a Borrower is maintaining insurance coverage and, if the related Borrower fails to do so, the Master Servicer shall itself maintain such Insurance Policy coverage to the extent the Trustee as mortgagee has an insurable interest in the related Mortgaged Property and to the extent such Insurance Policy coverage is available at commercially reasonable rates, as determined by the Master Servicer in accordance with the Servicing Standard); provided that, subject to Section 3.07(f), if any Mortgage permits the holder thereof to dictate to the Borrower the Insurance Policy coverage to be maintained on such Mortgaged Property, the Master Servicer or Special Servicer, as applicable, shall impose such insurance requirements as are consistent with the Servicing Standard; and provided, further, that the Master Servicer is not required to make a Nonrecoverable Servicing Advance to maintain any such Insurance Policy. The Master Servicer shall use its reasonable efforts to cause the related Borrower to maintain, and if the related Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claimsshall maintain, all-Paying Ratings) for the related Mortgaged Property (x) a fire and risk casualty extended coverage insurance policy, which does not provide contain any carve-out for reduction due to depreciation(or, in an amount alternatively, a separate insurance policy that is at least equal to the lesser of (iexpressly provides coverage for) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for property damage resulting from acts a terrorist or similar act, to the extent not prohibited by the terms of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations Master Servicer shall apply:
(A) not be required to call default under a Mortgage Loan if the related Borrower fails to maintain such insurance, and the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consentinsurance, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers thatif, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent accordance with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, Standard that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related subject Mortgaged Property and located in or around the region in which such related the subject Mortgaged Property is located, located or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultationrate; and provided, howeverfurther, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to enforce any express provisions in the related Mortgage Loan Documents relating to insurance against loss or damage resulting from terrorist or similar acts. Subject to Section 3.17(a), the Special Servicer shall maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less Insurance Policy coverage than was previously required of the Borrower under the related REO Mortgage LoanLoan(s) or, butat Special Servicer's election, in any event, in an amount sufficient to avoid the application of any co-coverage satisfying insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, provided that the Special Servicer shall not be required in any event to maintain or obtain the insurance such coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardrates. All such insurance policies maintained as described above Insurance Policies shall (i) contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, Loans) or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of REO Properties), (ii) include coverage in an REO Propertyamount not less than the lesser of the full replacement cost of the improvements which are a part of the Mortgaged Property or the outstanding principal balance owing on the related Mortgage Loan(s), but in any case in such an amount so as to avoid the application of any co-insurance clause, (iii) include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan Documents) and (iv) be issued by either (X) a Qualified Insurer or (Y) for any Insurance Policy being maintained by the related Borrower, an insurance carrier meeting the requirements of the related Mortgage Loan Documents (provided that such Qualified Insurer or other insurance carrier is authorized under applicable law to issue such Insurance Policies). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies Insurance Policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing StandardStandard and the provisions of the related Mortgage Loan Documents) shall be deposited deposited: (i) in the case of a Mortgage Loan, in the Collection Account or any related Mortgage Loan Combination Custodial Account, as applicable in accordance with Section 3.04, maintained by the Master Servicer, subject to withdrawal pursuant to Section 3.053.05(a) or 3.04(e), as applicable; and (ii) in the case of amounts received in respect of a Mortgage Loanan REO Property, or in the REO Account of maintained by the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost costs incurred by the Master Servicer or Special Servicer in maintaining any such insurance Insurance Policies in respect of Mortgage Loans if the Borrower defaults on its obligation to maintain such Insurance Policies shall, subject to Section 3.03(c), be advanced by and reimbursable to the Master Servicer as a Servicing Advance. The amounts so advanced shall not, for purposes hereof, including of calculating monthly distributions to Certificateholders, be added to the unpaid principal balance or Stated Principal Balance of the related Trust Mortgage Loan, notwithstanding that the terms of such Trust Mortgage Loan so permit; provided, however, that this sentence shall not limit . Any cost incurred by the rights of the Master Servicer or Special Servicer on behalf in maintaining any such Insurance Policies with respect to REO Properties shall be an expense of the Trust to enforce any obligations Fund payable out of the related Borrower under such Mortgage Loan. Costs REO Account pursuant to Section 3.16(c) or, if the amount on deposit therein is insufficient therefor, subject to Section 3.03(c), advanced by and reimbursable to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain obtains and maintain, or cause to be obtained and maintained, maintains a blanket policy or master force-placed policy Insurance Policy with a Qualified Insurer insuring against fire and hazard losses on all of the Mortgage Loans or REO Properties, as applicablethe case may be, then, required to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratingsbe serviced and administered by it hereunder, and (B) such Insurance Policy provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) required, then the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause fire and hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy Insurance Policy may contain a deductible clause (not in excess of a customary amount)clause, in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a fire and hazard insurance policy Insurance Policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policyInsurance Policy, the Master Servicer or the Special Servicer shall promptly deposit into the Collection Account maintained by the Master Serviceror any related Mortgage Loan Combination Custodial Account, as applicable in accordance with Section 3.04, from its own funds without the portion of such loss or losses that would have been covered under the individual policy (giving effect to any right deductible limitation or, in the absence of reimbursement such deductible limitation, the deductible limitation that is consistent with the Servicing Standard) but is not covered under the blanket Insurance Policy because of such deductible clause. The Master Servicer or Special Servicer, as applicable, shall prepare and present, on behalf of itself, the Trustee, the Certificateholders and any affected B Loan Holders, claims under any such blanket Insurance Policy in a timely fashion in accordance with the terms of such policy. The Special Servicer, to the extent consistent with the Servicing Standard, may maintain earthquake insurance on REO Properties; provided that such coverage is available at commercially reasonable rates. If the Master Servicer or Special Servicer causes any Mortgaged Property to be covered by a master single interest Insurance Policy with a Qualified Insurer naming the Master Servicer or Special Servicer as the loss payee, then to the extent such Insurance Policy provides protection equivalent to the individual policies otherwise required, the Master Servicer or Special Servicer shall conclusively be deemed to have satisfied its obligation to cause such insurance to be maintained on the related Mortgage Properties. If the Master Servicer or Special Servicer, as applicable, causes any Mortgaged Property or REO Property to be covered by such master single interest Insurance Policy, the incremental costs of such insurance applicable to such Mortgaged Property (i.e., other than any minimum or standby premium payable for such policy whether or not any Mortgaged Property is covered thereby) shall be paid by and reimbursable to the Master Servicer as a Servicing Advance. Such master single interest Insurance Policy may contain a deductible clause, in which case the Master Servicer or the Special Servicer, as applicable, shall, if (A) there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a) and (B) there shall have been one or more losses which would have been covered by such policy had it been maintained, deposit into the Collection Account or any related Mortgage Loan Combination Custodial Account, as applicable in accordance with Section 3.04, from the Trust, its own funds the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses single interest Insurance Policy because of such deductible clause clause, to the extent that any such deductible exceeds the deductible limitation that pertained to the related Trust Mortgage Loan (Loan, or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the The Master Servicer has actual knowledge and Special Servicer, respectively, shall maintain, at their own expense, a blanket fidelity bond (a "Fidelity Bond") and an errors and omissions insurance policy with a Qualified Insurer, with coverage on all of its officers or employees acting in any event capacity requiring such persons to handle funds, money, documents or paper relating to the Mortgage Loans (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the "Master Servicer shall notify Employees," in the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions case of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are and "Special Servicer Employees," in accordance with the Servicing Standard and the terms and conditions case of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer). Any such Fidelity Bond and errors and omissions insurance shall protect and insure the Master Servicer has actual knowledge against losses, including forgery, theft, embezzlement, fraud, errors and omissions, failure to maintain any insurance policies required pursuant to the Agreement and negligent acts of any event giving rise to a claim under an Environmental Insurance Policy, the Master Servicer Employees or Special Servicer Employees. Such errors and omissions policy shall take reasonable actions as are in accordance with also protect and insure the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard Master Servicer against losses in connection with any claim under an Environmental Insurance Policy described above (whether by the release or satisfaction of a Mortgage Loan without having obtained payment in full of the indebtedness secured thereby. No provision of this Section requiring such Fidelity Bond and errors and omissions insurance shall diminish or relieve the Master Servicer or Special Servicer from its duties and obligations as set forth in this Agreement. The minimum coverage under any such Fidelity Bond and errors and omissions insurance policy shall be at least equal to the greater of (i) the amount necessary for the Master Servicer or Special Servicer) shall be (subject , as applicable, to Section 3.11(h) and Section 3.19(b)) paid byqualify as a FNMA or FHLMC servicer or in an amount that would meet the requirements of prudent institutional commercial mortgage loan servicers for similar transactions, and reimbursable to(ii) $1,000,000. Notwithstanding the foregoing, so long as the long-term debt or the deposit obligations or claims-paying ability of the Master Servicer or Special Servicer (or its immediate or remote parent) is rated at least "A" by S&P and "A2" by Moody's, the Master Servicer or Special Servicer, respectively, shall ▇▇ ▇▇▇owed to provide self-insurance with respect to a Fidelity Bond and such errors and omissions policy. Coverage of the Master Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of the Master Servicer or the Special Servicer and providing the coverage required by this Section 3.07(c) shall satisfy the requirements of this Section 3.07(c). The Special Servicer and the Master Servicer will promptly report in writing to the Trustee any material changes that may occur in their respective Fidelity Bonds, if any, and/or their respective errors and omissions Insurance Policies, as the case may be, as a Servicing Advanceand will upon request furnish to the Trustee copies of all binders and policies or certificates evidencing that such bonds, if any, and insurance policies are in full force and effect.
(d) The With respect to the Mortgage Loans that (i) require earthquake insurance, or (ii) (A) at the date of origination were secured by Mortgaged Properties on which the related Borrower maintained earthquake insurance and (B) have provisions which enable the Master Servicer and to continue to require the Special related Borrower to maintain earthquake insurance, the Master Servicer shall each at all times during use reasonable efforts to cause the term of this Agreement (orrelated Borrower to maintain such insurance in the amount, in the case of clause (i), required by the Special Servicerrelated Mortgage Loan Documents and in the amount, in the case of clause (ii), maintained at all times during origination, in each case, to the term extent such amounts are available at commercially reasonable rates. Any determination by the Master Servicer that such insurance is not available at commercially reasonable rates with respect to a Mortgage Loan for which any related Mortgaged Property has a "Probable Maximum Loss," bounded on the basis of this Agreement during which Specially Serviced 50 years, in excess of 20% shall, with respect to any Significant Trust Mortgage Loans and/or REO Properties exist as part Loan, be subject to confirmation by each Rating Agency that such determination not to purchase such insurance will, in and of itself, not result in a downgrade, qualification or withdrawal of any of the then-current ratings assigned to the Certificates rated by such Rating Agency. The Master Servicer shall use reasonable efforts to cause the related Borrower to pay the costs of such confirmation, otherwise, such costs shall be a Trust FundFund expense.
(e) keep in force The Master Servicer and Special Servicer shall review and be familiar with the terms and conditions relating to enforcing claims and shall monitor the dates by which any claim or action is required to be taken under each insurance policy to realize the full value of such policy for the benefit of Certificateholders (and, if a Qualified Insurer having Serviced Loan Combination is involved, the Required Claims-Paying Ratingsrelated Junior Loan Holder(s), if any).
(f) If, as of the Closing Date, a fidelity bond Mortgaged Property (other than an REO Property) shall be in a federally designated special flood hazard area (if flood insurance has been made available), or if the Master Servicer becomes aware, in performing its duties under this Agreement, that a Mortgaged Property becomes located in such form area by virtue of remapping conducted by the Federal Emergency Management Agency, the Master Servicer will use its reasonable efforts to cause the related Borrower (in accordance with applicable law and amount the terms of the related Mortgage Loan Documents) to maintain, and, if the related Borrower shall default in any such obligation to so maintain, the Master Servicer shall itself maintain (to the extent available at commercially reasonable rates (as are determined by the Master Servicer in accordance with the Servicing Standard) and the Trustee as Mortgagee has an insurable interest in the related Mortgaged Property), flood insurance in respect thereof, but only to the extent the related Mortgage Loan Documents permit the mortgagee to require such coverage and the maintenance of such coverage is consistent with the Servicing Standard. The Master Servicer or Special Servicer Such flood insurance shall be deemed in an amount equal to have complied with the foregoing provision if an Affiliate thereof has such fidelity bond coverage andleast of (i) the unpaid principal balance of the related Mortgage Loan(s), (ii) the maximum amount of insurance which is available under the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, as amended, and (iii) the amount required by the terms related Mortgage Loan Documents. If the cost of such fidelity bondany insurance described above is not borne by the Borrower, the coverage afforded thereunder extends to the Master Servicer or the Special Servicershall promptly make a Servicing Advance for such costs, as the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice subject to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporaS
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Credit Suisse Commercial Mortgage Trust Series 2006-C2)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Serviced Mortgage LoanLoan or Serviced Loan Combination, the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Serviced Mortgage Loan and or Serviced Loan Combination or (ii) the outstanding principal balance of such Serviced Mortgage LoanLoan or Serviced Loan Combination, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or (subject to the Servicing Standard) that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property securing a Serviced Mortgage Loan or Serviced Loan Combination unless such insurance policy was in effect at the time of the origination of such Serviced Mortgage Loan or Serviced Loan Combination pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable ratesrates and the Trustee has an insurable interest;
(B) if and to the extent that any Serviced Mortgage Loan or Serviced Loan Combination grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower under any Serviced Mortgage Loan to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower under any Serviced Mortgage Loan to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower under any Serviced Mortgage Loan to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower under any Serviced Mortgage Loan does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower under any Serviced Mortgage Loan fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder and (if a Serviced Loan Combination is involved) the related Serviced Pari Passu Companion Loan Holder(s) if the Master Servicer determines that any Borrower under a Serviced Mortgage Loan has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower under a Serviced Mortgage Loan has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. .
(b) Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each Administered REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such Administered REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months (or at least eighteen (18) months, in the case of an Administered REO Property whose related REO Mortgage Loan had an initial principal balance exceeding $35,000,000), in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, provided that both of the following conditions and/or limitations shall apply:
(A) the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what above unless the Trustee has an insurable interest; and
(B) the Special Servicer shall not be required to maintain or obtain the insurance coverage otherwise described above to the extent that the coverage is not available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer (or the applicable sub-servicer) on behalf of the Trustee, in the case of insurance maintained in respect of a Serviced Mortgage LoanLoan or Serviced Loan Combination, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an Administered REO Property. 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 REO Property or amounts to be released to the related Borrower, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account (or, to the extent the loss affects a Serviced Pari Passu Companion Loan Holder, in the Serviced Pari Passu Companion Loan Custodial Account, as applicable), in each case as appropriate in accordance with Section 3.04, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Serviced Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an Administered REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Serviced Mortgage LoanLoan or Serviced Loan Combination, notwithstanding that the terms of such Serviced Mortgage Loan or Serviced Loan Combination so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust (and, if applicable, any related Serviced Pari Passu Companion Loan Holders) to enforce any obligations of the related Borrower under such Serviced Mortgage LoanLoan or Serviced Loan Combination. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(bc) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the any Serviced Mortgage Loans Loans, Serviced Loan Combinations or Administered REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2A (low)” by DBRS (or, if not rated by DBRS, an equivalent (or higher) rating by any two other NRSROs (which may include Fitch and ▇▇▇▇▇’▇)), “A-” by Fitch and “A3” by ▇▇▇▇▇’▇ and “A” by Fitch ▇, or it has received a Rating Agency Confirmation from each Rating Agency with respect to which such rating is not satisfied, and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Serviced Mortgage Loan, Serviced Loan Combination or any Administered REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account (or, to the extent the loss affects any Serviced Pari Passu Companion Loan Holder(s), in the Serviced Pari Passu Companion Loan Custodial Account, as applicable) maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Serviced Mortgage Loan or Serviced Loan Combination (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and CertificateholdersCertificateholders and, if applicable, any related Serviced Pari Passu Companion Loan Holders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(cd) With respect to each Performing Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 1 contract
Sources: Pooling and Servicing Agreement (WFRBS Commercial Mortgage Trust 2013-C17)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts (with respect to Mortgage Loans and Companion Loans other than Specially Serviced Mortgaged Loans to the extent that the Trust Fund has an insurable interest) and the Special Servicer (with respect to Specially Serviced Mortgage Loans and REO Properties to the extent that the Trust Fund has an insurable interest) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard; and provided, further, that, if and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, extent that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisora Mortgage so permits, the Special Servicer will not related Mortgagor shall be required to do so. If any such approval of exercise its reasonable best efforts to obtain the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt required insurance coverage from the Master Servicer of the Master Servicer’s determination Qualified Insurers and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation required insurance coverage obtained by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurancefrom Qualified Insurers. The cost of any such insurance coverage obtained by either the Master Servicer shall notify or the Special ServicerServicer shall be a Servicing Advance to be paid by the Master Servicer pursuant to Section 3.03. Whether or not the applicable Mortgage Loan documents require such insurance, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if may request that earthquake insurance be secured for one or more Mortgaged Properties at the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest expense of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyMajority Subordinate Certificateholder. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, also cause to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance no less insurance coverage than was previously required of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required Mortgagor under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan DocumentsMortgage; provided, however, provided that the Special Servicer all such insurance shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardobtained from Qualified Insurers. All such insurance policies maintained as described above by the Master Servicer or the Special Servicer (i) shall contain (if they insure against loss to propertyproperty and do not relate to an REO Property) a “"standard” " mortgagee clause, with loss payable to the Trustee or the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage Loan, or Loans); (ii) shall be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of REO Properties), on behalf of the Trustee; (iii) shall be non-cancelable without 30 days' prior written notice to the insured party; (iv) shall include coverage in an amount not less than the lesser of (x) the full replacement cost of the improvements securing a Mortgaged Property or REO Property, as applicable, or (y) the outstanding principal balance owing on the related Mortgage Loan or REO Loan, as applicable, and in any event, the amount necessary to avoid the operation of any co-insurance provisions; (v) shall include a replacement cost endorsement providing no deduction for depreciation (unless such endorsement is not permitted under the related Mortgage Loan documents); (vi) shall include such other insurance, including, to the extent available at commercially reasonable rates, earthquake insurance, where applicable, as required under the applicable Mortgage or other Mortgage Loan document; and (vii) in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan or Companion Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loans so permit; provided, however, that this sentence shall not limit . Notwithstanding the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable toforegoing, the Master Servicer or Special Servicer, as applicable, will not be required to maintain (and in the case may beof the Special Servicer, with respect any Specially Serviced Mortgage Loan), and shall not cause a Mortgagor to be in default with respect to the failure of the related Mortgagor to obtain, all-risk casualty insurance which does not contain any carve-out for terrorist or similar acts, if and only if the Special Servicer, in consultation with the Controlling Class Representative, and, with respect to each Co-Lender Loan, in consultation with the related Companion Holder if required under the applicable Intercreditor Agreement (or with respect to the 175 West Jackson Whole Loan, the 175 West Jackson Representative), ha▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ accordance with the Servic▇▇▇ ▇▇▇ndard that either (a) such insurance is not available at any rate or (b) such insurance is not available at commercially reasonably rates and that such hazards are not at the time commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which such Mortgaged Property is located; provided, further, that upon the Special Servicer's determination consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Controlling Class Representative or Companion Holder, if applicable (or, with respect to the 175 West Jackson Whole Loan, the 175 West Jackson Representative), th▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇er shall not be required t▇ ▇▇ ▇▇; provided, further that, during the period that the Special Servicer is evaluating such insurance hereunder, the Master Servicer shall not be liable for any loss related to its failure to require the Mortgagor to maintain terrorism insurance and shall not be in default of its obligations hereunder as a Servicing Advanceresult of such failure; provided that the Master Servicer has given prompt notice to the Special Servicer of its determination that it will not be successful in its efforts to cause the Mortgagor to obtain such insurance, along with its determination, and any information in its possession, regarding the availability and cost of such insurance. The Special Servicer shall promptly notify the Master Servicer of each determination under this paragraph.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans, Companion Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)clause. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during in which Specially Serviced Mortgage Loans and/or or REO Properties exist as are part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond with Qualified Insurers, such fidelity bond to be in such form and amount as are consistent with would permit it to be a qualified FNMA or FHLMC, whichever is greater, seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the Servicing Standardqualification, downgrading or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without for ten (10) days’ prior ' written notice to the TrusteeTrustee prior to any cancellation. So Each of the Master Servicer and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement in which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) also keep in force with Qualified Insurers, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers, employees and agents in connection with its servicing obligations hereunder, which policy or policies shall be in such form and amount as would permit it to be a qualified FNMA seller-servicer of multifamily mortgage loans, or in such other form and amount as would not cause the qualification, downgrade or withdrawal of any rating assigned by any Rating Agency to the Certificates (as evidenced in writing from each Rating Agency). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide for ten days' written notice to the Trustee prior to cancellation. The Master Servicer and the Special Servicer shall each cause the Trustee to be an additional loss payee on any policy currently in place or procured pursuant to the requirements of this Section 3.07(c). For so long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, as the case may be (or in the case of the initial Master Servicer and Special Servicer, their respective direct or indirect parent), are rated at least "A" or the equivalent by all of the Rating Agencies (or such party’s corporalower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies), such Person may self-insure with respect to the risks described in this subsection.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Wachovia Bank Commercial Mortgage Trust Series 2004-C15)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In Each of the Master Servicer (in the case of Mortgage Loans and the Companion Loan other than Specially Serviced Mortgage Loans) and the Special Servicer (in the case of Specially Serviced Mortgage Loans) shall use reasonable efforts to cause each Mortgagor to maintain in respect of the related Mortgaged Property all insurance coverage as is required under the related Mortgage Loan(to the extent such insurance coverage is available at commercially reasonable terms); provided that if any Mortgage permits the holder thereof to dictate to the Mortgagor the insurance coverage to be maintained on such Mortgaged Property, the Master Servicer or the Special Servicer, as appropriate, shall use reasonable efforts impose such insurance requirements as are consistent with the Servicing Standard to cause the related Borrower Standard. If a Mortgagor fails to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintaininsurance, the Master Servicer will itself cause (at the direction of the Special Servicer in the case of a Specially Serviced Loan) shall (to the extent available at commercially reasonable terms as determined by the Master Servicer, which shall be maintained with Qualified Insurers entitled to rely on an opinion of counsel or insurance consultants in making such determination) obtain such insurance (which may be through a master or single interest policy) and the cost (including any deductible relating to such insurance and any out of pocket cost incurred by the Master Servicer in obtaining advice of counsel or insurance consultants) of such insurance (or in the case of a master or single interest policy, the incremental cost (including any deductible relating to such insurance) of such insurance relating to the specific Mortgaged Property), shall be a Servicing Advance and shall be recoverable by the Master Servicer pursuant to Sections 3.05(a) and 3.05(b). If at any time a Mortgaged Property is located in an area identified in the Flood Hazard Boundary Map or Flood Insurance Rate Map issued by the Federal Emergency Management Agency as having special flood hazards or it becomes located in such area by virtue of remapping conducted by such agency
(i) the Required Claims-Paying Ratings) for Mortgagor is required by the terms of the Mortgage Loan or the Companion Loan to maintain such insurance (or becomes obligated by virtue of the related Mortgaged Property (xbecoming located in such area by virtue of such remapping) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and or (ii) the outstanding principal balance terms of the Mortgage Loan or the Companion Loan permit the mortgagee to require the Mortgagor to obtain such insurance, the Master Servicer (or in the case of a Specially Serviced Loan, the Special Servicer), shall promptly notify the Mortgagor of its obligation to obtain such insurance. If the Mortgagor fails to obtain such flood insurance within 120 days of such Mortgage notification, the Master Servicer (or in the case of a Specially Serviced Loan, butthe Special Servicer) shall obtain such insurance, in any event, in an amount sufficient the cost of which shall be a Servicing Advance and shall be recoverable by the Master Servicer or Special Servicer pursuant to avoid the application of any co-insurance clause Sections 3.05(a) and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents3.05(b); provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer or Special Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If incur any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, cost if such approval shall be deemed to have been granted. If the Special Servicer is in the process of making Advance would constitute a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyNonrecoverable Servicing Advance. Subject to Sections 3.17(bSection 3.17(a), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall also use reasonable efforts, consistent with the Servicing Standard, efforts to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide cause to be maintained for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such each REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and terms) no less insurance coverage than was previously required of the Mortgagor under the related Mortgage or as is consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer (in the case of Mortgaged Properties) or the Special Servicer (in the case of REO Properties) on behalf of the TrusteeTrustee and, in with respect to the case of insurance maintained in respect of a Mortgage Companion Loan, or the Companion Lender, and shall name the Trustee as the insured, with loss payable be issued by an insurer authorized under applicable law to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Propertyissue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with applicable law, the terms of the related Mortgage Loan and Companion Loan documents and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Mortgage Loan Subaccount and/or the Companion Loan Subaccount, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of the Companion Loan, or pursuant to Section 3.05(b) in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to CertificateholdersCertificateholders or the Companion Lender, be added to unpaid the outstanding principal balance or Stated Principal Balance of the related Mortgage Loan or Companion Loan, notwithstanding that the terms of such Mortgage Loan or Companion Loan so permit; provided, however, that this sentence but shall not limit the rights of be recoverable by the Master Servicer or Special Servicer on behalf of the Trust as a Servicing Advance pursuant to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to Sections 3.05(a) and 3.05(b).
(i) If the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) obtains and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, maintains a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or Mortgaged Properties and/or REO Properties, as applicableProperties for which it is responsible to cause the maintenance of insurance hereunder, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related such Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any a Mortgaged Property securing a Mortgage Loan or any an REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that which would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by (or into the Master Servicer, Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained to the related Mortgage Loan (or Companion Loan, or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each agrees to prepare and present, on behalf of itself, the Trustee and CertificateholdersTrustee, the Certificateholders and, if applicable, the Companion Lender, claims under any such blanket policy maintained by it in a timely fashion in accordance with the terms of such policy.
(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-force placed insurance policy, which provides protection equivalent to the individual policies otherwise required, the Master Servicer or Special Servicer shall conclusively be deemed to have satisfied its respective obligations to cause hazard insurance to be maintained on such Mortgaged Properties and/or REO Properties. Such policy may contain a deductible clause, in which case the Master Servicer or the Special Servicer, as applicable, shall in the event that (x) there shall not have been maintained on the related Mortgaged Property or REO Property a policy otherwise complying with the provisions of Section 3.07(a), and (y) 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 (or into the Servicing Account if insurance proceeds are to be applied to the repair or restoration of the applicable Mortgaged Property or disbursed to the related Mortgagor) 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 Companion Loan, or, in the absence of any such deductible limitation, the deductible limitation which is consistent with the Servicing Standard. The Master Servicer and the Special Servicer each agrees to prepare and present, on behalf of itself, the Trustee, the Certificateholders and, if applicable, the Companion Lender, claims under any such master force placed insurance policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify obtain and maintain at its own expense and keep in full force and effect throughout the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard term of this Agreement a blanket fidelity bond and the terms an errors and conditions omissions insurance policy covering its officers and employees and other persons acting on behalf of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard it in connection with any claim its activities under this Agreement and naming the Trustee as an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) additional insured. The amount of coverage shall be (subject at least equal to Section 3.11(h) and Section 3.19(b)) paid bythe coverage that would be required by FNMA or FHLMC, and reimbursable towhichever is greater, with respect to the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be, were servicing and administering the Mortgage Loans, the Companion Loan and/or the REO Properties for which it is responsible hereunder for FNMA or FHLMC. Such fidelity Coverage of the Master Servicer or the Special Servicer under a policy or bond obtained by an Affiliate of such Person and providing the coverage required by this Section 3.07(c) shall provide that it may not satisfy the requirements of this Section 3.07(c).
(d) All insurance coverage required to be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of maintained by the Master Servicer or Special Servicer, as applicable, under this Section 3.07 shall be obtained from Qualified Insurers having a claims paying ability rating (or the obligations of which are guaranteed or backed by a company having such party’s corporaclaims paying ability rating or insurance financial strength rating, as applicable) of not less than (x) "A" by Standard & Poor's and (y) "A2" by ▇▇▇▇▇'▇; provided, however, that the requirements of clauses (x) and (y) shall not be applicable with respect to Standard & Poor's or ▇▇▇▇▇'▇, as applicable, if the related Rating Agency shall have confirmed in writing that an insurance company with a lower claims paying ability rating shall not result, in and of itself, in a downgrade, qualification or withdrawal of the then current ratings by such Rating Agency of any class of Certificates.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Gmac Commercial Mortgage Securities Inc)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower each Mortgagor to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage maintain, and, if such Borrower the Mortgagor does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) maintained, for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due including each Mortgaged Property relating to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage any Specially Serviced Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably requirerequired, subject to applicable law, under the related Mortgage Loan Documentsdocuments; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) that, if and to the extent that any Mortgage such Loan grants documents permit the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Mortgagor is required to obtain the requisite insurance coveragemaintain, the Master Servicer shall (to the extent exercise such discretion in a manner consistent with the Servicing Standard, with a view towards requiring insurance comparable to that required under other Loans with express provisions governing such matters and including business interruption or rental loss insurance for at least 12 months; and provided, further, that the Master Servicer shall be required to maintain such insurance coverage upon the related Mortgagor's failure to do so only to the extent that such insurance is available at commercially reasonable rates and the Trustee, on behalf of the Trust, as mortgagee has an insurable interest. Subject to Section 3.17(b), the Special Servicer shall also cause to be maintained for each REO Property no less insurance coverage (to the extent available at commercially reasonable rates) use efforts (A) than was previously required of the related Mortgagor under the related Loan documents and (B), at a minimum, (i) hazard insurance with a replacement cost rider, (ii) business interruption or rental loss insurance for at least 12 months, and (iii) commercial general liability insurance, in each case, in an amount customary for the type and geographic location of such REO Property and consistent with the Servicing Standard Standard; provided that all such insurance required to cause the related Borrower to obtain the requisite insurance coverage be maintained by Master Servicer or Special Servicer shall be obtained from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have a financial strength or claims-paying rating no obligation beyond using its reasonable efforts consistent with lower than two rating categories below the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standardhighest rated Certificates outstanding, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain no lower than "A" from Fitch and "A" from S&P (or obtain in such other form and amount or issued by an insurer with such other financial strength or claims-paying ability as would not, as confirmed in writing by the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standardrelevant Rating Agency, result in an Adverse Rating Event. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a the Mortgage LoanLoans), or shall name the Trustee Trustee, (and in the case of a Loan Pair the related Companion Loan holder(s)) as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (and in the case of a Loan Pair the related Companion Loan holder(s)) (in the case of insurance maintained in respect of REO Properties), and shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance, and, unless prohibited by the related Mortgage, may contain a deductible clause (not in excess of a customary amount). Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Certificate Account in accordance with Section 3.04or, if a Loan Pair is involved, the related Loan Pair Custodial Account, subject to withdrawal pursuant to Section 3.053.05(a), or Section 3.05(f), as applicable in the case of amounts received in respect of a Mortgage Loan, or in the applicable REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust or, if a Loan Pair is involved, on behalf of the related Companion Loan Noteholders to enforce any obligations of the related Borrower Mortgagor under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, by and reimbursable to, to the Master Servicer or the Special Servicer, as the case may be, as a Servicing Advance. Notwithstanding the foregoing, if the Loan documents specifically and expressly set forth terms requiring insurance coverage against terrorist or similar acts for a Loan with a Stated Principal Balance greater than $20,000,000, then the Master Servicer and the Special Servicer shall enforce the terms of the related Loan documents in accordance with the Servicing Standard, and if the Mortgagor fails to maintain such insurance, such failure shall constitute a Servicing Transfer Event. To the extent the Loan documents do not set forth specific terms requiring insurance coverage against terrorist or similar acts and a Loan (x) requires a Mortgagor to maintain insurance policies covering some or all of the risks contained in the Additional Exclusions or (y) in accordance with the Servicing Standard, the Master Servicer has determined that the Loan documents permit the lender to require the Mortgagor to maintain insurance policies covering some or all the risks contained in the Additional Exclusions (the covered risks required to be covered or which the lender has the discretion to require to be covered being referred to as "Covered Risks"), the Master Servicer shall use reasonable efforts in accordance with the Servicing Standard to determine whether, upon renewal of the Mortgagor's property or casualty insurance (including any all risk insurance policy), any of the Covered Risks are excluded from coverage. If any of the Covered Risks are determined by the Master Servicer to be excluded from coverage, the Master Servicer shall request the Mortgagor to either (i) purchase insurance acceptable to the Master Servicer in accordance with the Servicing Standard and in accordance with the related Loan documents covering such Covered Risks or (ii) provide a written explanation as to its reasons for failing to purchase such insurance. Notwithstanding the foregoing, with the written consent of the Special Servicer in accordance with the Servicing Standard the Master Servicer may waive the requirement to procure insurance covering any of the Covered Risks if the Master Servicer determines in accordance with the Servicing Standard that (1) insurance covering any such Covered Risks is not available at a commercially reasonable price, or (2) based on information reasonably available to the Master Servicer, after due inquiry, any such Covered Risks are at that time not commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which the Mortgaged Property is located unless the Stated Principal Balance of the Loan is greater than $20,000,000. If the Stated Principal Balance of the Loan is greater than $20,000,000, then the Master Servicer must determine that the circumstances in both clauses (1) and (2) of the immediately preceding sentence apply prior to waiving the Mortgagor's requirement to procure insurance with respect to any Covered Risks. If the Special Servicer fails to give a response to the Master Servicer as referenced in the second preceding sentence within 10 Business Days of the Master Servicer initially notifying the Special Servicer in writing of such request, the Master Servicer shall promptly notify the Directing Certificateholder of such failure of the Special Servicer to respond to such request. If the Directing Certificateholder and/or the Special Servicer have not responded to the Master Servicer within 10 Business Days of the notice referenced in the immediately preceding sentence, the Master Servicer shall determine in accordance with the Servicing Standard whether to require (or not require) the Mortgagor to maintain such insurance. If the Master Servicer requires the Mortgagor to maintain such insurance and the Mortgagor fails to maintain such insurance, to the extent such insurance is then reasonably available, the Master Servicer shall then procure such insurance in accordance with the Servicing Standard and such failure by the Mortgagor shall constitute a Servicing Transfer Event. For purposes of computing whether the $20,000,000 threshold described herein is met for a particular Loan, if a Loan is secured by multiple Mortgaged Properties, then the amount subject to the $20,000,000 threshold shall be the portion of the Stated Principal Balance of the related Loan pro rated based on an individual Mortgaged Property's appraised value as a percentage of the total appraised value of all of the related Mortgaged Properties.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-force placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, that it is required to service and administer hereunder, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having a financial strength or claims-paying rating no lower than "A" from Fitch and "A" from S&P or having such other financial strength or claims-paying ability rating as would not, as confirmed in writing by the Required Claims-Paying Ratingsrelevant Rating Agency, result in an Adverse Rating Event and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-force placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and CertificateholdersTrustee, the Certificateholders and, in the case of a Loan Pair, the related Companion Loan Noteholders, claims under any such blanket or master force-forced placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if Each of the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or or REO Properties for which it is responsible exist as part of the Trust Fund) keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the Required Claims-Paying Ratingshighest rated Certificates outstanding, and in any event no lower than "A" from Fitch and "A" from S&P, a fidelity bond in such form and amount as are consistent would permit it to be a qualified Fannie Mae seller-servicer of multifa▇▇▇▇ ▇o▇▇▇age loans (or in such other form and amount or issued by an insurer with such other financial strength or claims-paying ability rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Servicing StandardTrustee by the relevant Rating Agency)). The Each of the Master Servicer or and the Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ ' prior written notice to the Trustee. So long as the long-term unsecured debt obligations Each of the Master Servicer or and the Special Servicer shall at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Loans and/or REO Properties for which it is responsible exist as part of the Trust Fund) also keep in force with a Qualified Insurer having a financial strength or claims-paying rating no lower than two rating categories below the highest rated Certificates outstanding, and in any event no lower than "A" from Fitch and "A" from S&P, a policy or policies of insurance covering loss occasioned by the errors and omissions of its officers and employees in connection with its servicing obligations hereunder, which policy or policies shall be in such party’s corporaform and amount as would permit it to be a qualified Fannie Mae seller-servicer of multifa▇▇▇▇ ▇o▇▇▇age loans (or in such other form and amount or issued by an insurer with such other financial strength or claims-paying rating as would not result in an Adverse Rating Event with respect to any Class of Rated Certificates (as confirmed in writing to the Trustee by the relevant Rating Agency)). Each of the Master Servicer and the Special Servicer shall be deemed to have complied with the foregoing provisions if an Affiliate thereof has such insurance and, by the terms of such policy or policies, the coverage afforded thereunder extends to the Master Servicer or the Special Servicer, as the case may be. Any such errors and omissions policy shall provide that it may not be canceled without ten days' prior written notice to the Trustee.
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Commercial Mortgage Pass Through Certificates Series 2003-1)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer (with respect to Mortgage Loans other than Specially Serviced Mortgaged Loans) and the Special Servicer (with respect to Specially Serviced Mortgage Loans) shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom coverage that the related Borrower Mortgagor is required to obtain the requisite insurance coveragemaintain, the Master Servicer or the Special Servicer, as the case may be, shall (to the extent exercise such discretion in a manner consistent with the Servicing Standard) use efforts consistent , with a view towards requiring insurance comparable to that required under other Mortgage Loans with express provisions governing such matters; and provided further that, if and to the Servicing Standard to cause extent that a Mortgage so permits, the related Borrower Mortgagor shall be required to obtain the requisite required insurance coverage from Qualified Insurers that, in each case, have a claims-paying rating no lower than two rating categories below the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
highest rated Bonds outstanding, and in any event no lower than "[A]" (C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably requirean equivalent rating), subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts from each of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged PropertyRating Agencies. Subject to Sections Section 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable effortsalso cause to be maintained for each REO Property no less insurance coverage than was previously required of the Mortgagor under the related Mortgage and at a minimum, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full hazard insurance with a replacement cost of improvements at such REO Property or rider, (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve 12 months, and (12iii) monthscomprehensive general liability insurance, in each case if so required pursuant to case, in an amount customary for the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates type and geographic location of such REO Property and consistent with the Servicing Standard; provided that all such insurance shall be obtained from Qualified Insurers that, in each case, if providing casualty insurance, shall have a claims-paying rating no lower than two rating categories below the highest rated Bonds outstanding, and in any event no lower than "[A]" (or an equivalent rating), from each of the Rating Agencies. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of a Mortgage LoanLoans), or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, Trustee (in the case of insurance maintained in respect of REO Properties), and shall be issued by an REO Propertyinsurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case in accordance with the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Custodial Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, then, to the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses 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 any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 1 contract
Sources: Servicing and Administration Agreement (Structured Asset Securities Corp Series 1997 Ll I)
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In The Servicer or the case of Special Servicer, as applicable, shall maintain, or cause each Mortgage Loan, the Master Servicer shall use reasonable efforts consistent with the Servicing Standard to cause the related Borrower Mortgagor to maintain for each Mortgaged Property (including identifying any REO Property) a hazard insurance policy that has been obtained from an insurance company duly qualified as such under the extent to laws of the state in which a Borrower is maintaining insurance coverage and, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related Mortgaged Property is located, duly authorized and licensed in such state to transact the applicable insurance business and to write the insurance provided (x) and, if the Servicer or the Special Servicer shall obtain such hazard insurance policy on behalf of the related Mortgage, such insurance policy shall be obtained from a fire Qualified Insurer), and casualty extended that provides for such coverage as is required by the terms of the related Mortgage in the amounts set forth therein or, if such Mortgage permits the holder thereof to dictate to the Mortgagor the insurance policycoverage to be maintained on such Mortgaged Property, which does not provide for reduction due to depreciation, such coverage shall be in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing principal balance owing on such Mortgage Loan and (ii) the outstanding principal balance full replacement cost of such Mortgage LoanMortgaged Property (together with flood insurance coverage, but, if obtainable and if such Mortgaged Property is located in any eventa federally designated flood area, in an amount sufficient equal to the lesser of (i) the amount necessary to fully compensate for any damage or loss to the improvements which are part of such Mortgaged Property on a replacement cost basis and (ii) the maximum amount of insurance available from time to time under the federal flood insurance program, whether or not the area is participating in the program), but in any event not less than the amount necessary to avoid the application of any co-insurance clause and (y) all other contained in the hazard insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless policy. Each such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any Mortgage Loan grants the lender thereunder any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in contain a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry consistent with the Servicing Standard, and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisor, the Special Servicer will not be required to do so. If any such approval of the Special Servicer has not been expressly denied within ninety (90) days of the Special Servicer’s receipt from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insurance. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines that any Borrower has failed to maintain insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “"standard” " mortgagee clause, with loss and proceeds will be payable to the Master Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of a Mortgage Loan, Loans other than REO Properties) or shall (ii) be in the name the Trustee as the insured, with loss payable to of the Special Servicer on behalf of the Trustee, (in the case of insurance maintained in respect of an REO PropertyProperties) on behalf of the Indenture Trustee. Any All amounts collected by the Master Servicer or the Special Servicer, as applicable, Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related Borrower, in each case Mortgagor in accordance with normal servicing procedures of the Servicing StandardServicer or Special Servicer, as applicable, and/or the terms of the related Mortgage and Mortgage Note) shall be deposited in the Collection Account in accordance with Section 3.04Account, subject to withdrawal pursuant to Section 3.05, in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special Servicer, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property5.05. Any cost incurred by the Master Servicer or Special Servicer in maintaining any such insurance shall not, for purposes hereof, including calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or REO Properties, as applicable, then, to To the extent such policy (A) is obtained from a Qualified Insurer having the Required Claims-Paying Ratings, and (B) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policy, shall, if there shall not have been maintained on any Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Account maintained by the Master Servicer, from expended its own funds without any right of reimbursement from the Trustto pay for insurance premiums under this paragraph (a), the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because cost of such deductible clause to premiums shall be recoverable by the extent that any such deductible exceeds Servicer out of the deductible limitation that pertained to collections of delinquent premiums by the Mortgagor on the related Mortgage Loan (or, in or from the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard). The Master Servicer and the Special Servicer shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corporasources permitted
Appears in 1 contract
Maintenance of Insurance Policies; Errors and Omissions and Fidelity Coverage. (a) In the case of each Mortgage Loan, the The Master Servicer shall use reasonable efforts (with respect to Mortgage Loans other than Specially Serviced Mortgaged Loans) and the Special Servicer (with respect to Specially Serviced Mortgage Loans) shall, consistent with the Servicing Standard to cause the related Borrower to maintain (including identifying the extent to which a Borrower is maintaining insurance coverage andStandard, if such Borrower does not so maintain, the Master Servicer will itself cause to be maintained with Qualified Insurers having the Required Claims-Paying Ratings) for the related each Mortgaged Property (x) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements securing such Mortgage Loan and (ii) the outstanding principal balance of such Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause and (y) all other insurance coverage (including but not limited to coverage for damage resulting from acts of terrorism) as is required or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan DocumentsMortgage; provided that all of the following conditions and/or limitations shall apply:
(A) the Master Servicer shall not be required to maintain any earthquake or environmental insurance policy on any Mortgaged Property unless such insurance policy was in effect at the time of the origination of such Mortgage Loan pursuant to the terms of the related Mortgage Loan Documents and is available at commercially reasonable rates;
(B) if and to the extent that any such Mortgage Loan grants permits the lender thereunder holder thereof any discretion (by way of consent, approval or otherwise) as to the insurance provider from whom the related Borrower is to obtain the requisite insurance coverage, the Master Servicer shall (to the extent consistent with the Servicing Standard) use efforts consistent with the Servicing Standard to cause the related Borrower to obtain the requisite insurance coverage from Qualified Insurers that, in each case, have the Required Claims-Paying Ratings at the time such insurance coverage is obtained;
(C) the Master Servicer shall have no obligation beyond using its reasonable efforts consistent with the Servicing Standard to cause the Borrower to maintain the insurance required to be maintained or that the lender is entitled to reasonably require, subject to applicable law, under the related Mortgage Loan Documents;
(D) in no event shall the Master Servicer be required to cause the Borrower to maintain, or itself obtain, insurance coverage that the Master Servicer has determined is either (i) not available at any rate or (ii) not available at commercially reasonable rates and the related hazards are not at the time commonly insured against at the then-available rates for properties similar to the related Mortgaged Property and located in or around the region in which the related Mortgaged Property is located;
(E) the reasonable efforts of the Master Servicer to cause the Borrower to maintain insurance shall be conducted in a manner that takes into account the insurance that would then be available to the Master Servicer on a force-placed basis; and
(F) to the extent the Master Servicer itself Mortgagor is required to maintain insurance that the Borrower does not maintain, the Master Servicer shall not be required to maintain insurance other than what is available to the Master Servicer on exercise such discretion in a force-placed basis (and this will not be construed to modify the other limits set forth in clause (D) above). Notwithstanding the limitation set forth in clause (D) above, if the related Borrower fails to maintain with respect to the related Mortgaged Property (i) specific casualty insurance coverage providing for “special” form coverage that does not specifically exclude, terrorist or similar acts, and/or (ii) specific insurance coverage with respect to damages or casualties caused by terrorist or similar acts, the Master Servicer shall cause the related Borrower to maintain, or itself obtain, such insurance upon terms not materially less favorable than those in place as of the Closing Date, unless the Special Servicer has determined in its reasonable judgment based on inquiry manner consistent with the Servicing Standard; and provided further that, if and (during any Subordinate Control Period) with the consent of the Subordinate Class Representative or (during any Collective Consultation Period or Senior Consultation Period) after having consulted with the Trust Advisor and (during any Collective Consultation Period) the Subordinate Class Representative, that either (a) such insurance is not available at commercially reasonable rates and that such hazards are not at the time commonly insured against for properties similar to the related Mortgaged Property and located in or around the region in which such related Mortgaged Property is located, or (b) such insurance is not available at any rate (failure to maintain required insurance due to either of clause (a) or (b) is referred to herein as an “Acceptable Insurance Default”). The Subordinate Class Representative and/or Trust Advisor, as applicable, will have no more than thirty (30) days to respond to the Special Servicer’s request for such consent or consultation; provided, however, extent that upon the Special Servicer’s determination, consistent with the Servicing Standard, that exigent circumstances do not allow the Special Servicer to consult with the Subordinate Class Representative and/or Trust Advisora Mortgage so permits, the Special Servicer will not related Mortgagor shall be required to do so. If any such approval exercise its reasonable best efforts to obtain the required insurance coverage from Qualified Insurers that have a "claims paying ability" rating of the Special Servicer has at least "A" from Standard & Poor's and DCR, or if not been expressly denied within ninety (90) days of the Special Servicer’s receipt rated by DCR then a comparable rating from the Master Servicer of the Master Servicer’s determination and analysis and all information reasonably requested thereby and reasonably available to the Master Servicer in order to make an informed decision, such approval shall be deemed to have been granted. If the Special Servicer is in the process of making a determination described above in this paragraph, then, during the period of such evaluation by the Special Servicer (or, to the extent applicable, during the period that the Special Servicer is obtaining the consent of the Subordinate Class Representative or consulting with the Trust Advisor and/or the Subordinate Class Representative, as applicable), the Master Servicer shall not be liable for any loss related to its failure to require the related Borrower to maintain terrorism insurance and shall not be in default of its obligations hereunder as a result of such failure to maintain terrorism insuranceat least one other nationally recognized statistical rating agency. The Master Servicer shall notify the Special Servicer, the Trustee, the Subordinate Class Representative and the Majority Subordinate Certificateholder if the Master Servicer determines may request that any Borrower has failed to maintain earthquake insurance required under (or that the Master Servicer has required pursuant to a provision that entitles the lender to reasonably require insurance under) the related Mortgage Loan Documents and such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property or if any Borrower has notified the Master Servicer in writing that such Borrower does not intend to maintain such insurance and the Master Servicer has determined that such failure materially and adversely affects such Mortgage Loan and/or the interest of the Trust in the related Mortgaged Property. Subject to Sections 3.17(b), and/or 3.24, as applicable, with respect to each REO Property, the Special Servicer shall use reasonable efforts, consistent with the Servicing Standard, to maintain with Qualified Insurers having the Required Claims-Paying Ratings (a) a fire and casualty extended coverage insurance policy, which does not provide for reduction due to depreciation, in an amount that is at least equal to the lesser of (i) the full replacement cost of improvements at such REO Property or (ii) the outstanding principal balance of the related REO Mortgage Loan, but, in any event, in an amount sufficient to avoid the application of any co-insurance clause, (b) a comprehensive general liability insurance policy with coverage comparable to that which would be required under prudent lending requirements and in an amount not less than $1 million per occurrence and (c) to the extent consistent with the Servicing Standard, a business interruption or rental loss insurance covering revenues or rents for a period of at least twelve (12) months, in each case if so required pursuant to the related Mortgage Loan Documents; provided, however, that the Special Servicer shall not be required in any event to maintain or obtain the insurance coverage otherwise described by this paragraph beyond what is available at commercially reasonable rates and consistent with the Servicing Standard. All such insurance policies maintained as described above shall contain (if they insure against loss to property) a “standard” mortgagee clause, with loss payable to the Master Servicer on behalf of the Trustee, in the case of insurance maintained in respect of a Mortgage Loan, or shall name the Trustee as the insured, with loss payable to the Special Servicer on behalf of the Trustee, in the case of insurance maintained in respect of an REO Property. Any amounts collected secured by the Master Servicer or the Special Servicer, as applicable, for one or more Mortgaged Properties at the expense of the Majority Subordinate Certificateholder. Subject to Section 3.17(a), the Special Servicer shall also cause to be maintained for each REO Property no less insurance coverage than was previously required of the Mortgagor under the related Mortgage; provided that all such insurance shall be obtained from Qualified Insurers that, if they are providing casualty insurance, shall have a claims paying ability rating of at least "▇," "▇▇" and "A" from Standard & Poor's, Moody's (if then rated by Moody's) and DCR (if then rated by DCR), respectively (or Standard & Poor's and a comparable rating from one other nationally recognized statistical rating agency, if such insurer is not rated by Moody's and DCR) or such lower rating as will not result in qualification, downgrading or withdrawal of the ratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies. All such insurance policies shall contain (if they insure against loss to property and do not relate to an REO Property) a "standard" mortgagee clause, with loss payable to the Master Servicer (in the case of insurance maintained in respect of Mortgage Loans), and shall be in the name of the Special Servicer (in the case of insurance maintained in respect of REO Properties), on behalf of the Trust Fund; in each case such insurance shall be issued by an insurer authorized under applicable law to issue such insurance. Any amounts collected by the Master Servicer or the Special Servicer under any such policies (other than amounts to be applied to the restoration or repair of the related Mortgaged Property or REO Property or amounts to be released to the related BorrowerMortgagor, in each case subject to the rights of any tenants and ground lessors, as the case may be, and in each case in accordance with the terms of the related Mortgage and the Servicing Standard) shall be deposited in the Collection Account in accordance with Section 3.04Certificate Account, subject to withdrawal pursuant to Section 3.053.05(a), in the case of amounts received in respect of a Mortgage Loan, or in the REO Account of the Special ServicerAccount, subject to withdrawal pursuant to Section 3.16(c), in the case of amounts received in respect of an REO Property. Any cost incurred by the Master Servicer or the Special Servicer in maintaining any such insurance shall not, for purposes hereof, including including, without limitation, calculating monthly distributions to Certificateholders, be added to unpaid principal balance or Stated Principal Balance of the related Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit; provided, however, that this sentence shall not limit the rights of the Master Servicer or Special Servicer on behalf of the Trust to enforce any obligations of the related Borrower under such Mortgage Loan. Costs to the Master Servicer or the Special Servicer of maintaining insurance policies pursuant to this Section 3.07 shall (subject to Section 3.11(h) and Section 3.19(b)) be paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(b) If (i) the Master Servicer or the Special Servicer shall obtain and maintain, or cause to be obtained and maintained, a blanket policy or master force-placed policy insuring against hazard losses on all of the Mortgage Loans or and/or REO Properties, as applicableProperties that it is required to service and administer, then, to the extent such policy (Ai) is obtained from a Qualified Insurer having a claims-paying rating (or guaranteed by or backed in writing by a company having such claims-paying rating) of "▇," "▇▇" and "A" or better from Standard & Poor's, Moody's and DCR, respectively (or Standard & Poor's and a comparable rating from one other nationally recognized statistical rating agency, if such insurer is not rated by Moody's and DCR) or such lower rating of any Rating Agency or rating from any other nationally recognized statistical rating agency as will not result in qualification, downgrading or withdrawal of the Required Claims-Paying Ratingsratings then assigned to the Certificates, as evidenced in writing by the Rating Agencies, and (Bii) provides protection equivalent to the individual policies otherwise required herein and in the Mortgage Loan Documents or (ii) the Master Servicer or Special Servicer (or its corporate parent) has long-term unsecured debt obligations that are rated not lower than “A2” by ▇▇▇▇▇’▇ and “A” by Fitch and the Master Servicer or the Special Servicer, as the case may be, self-insures for its obligation to maintain of the individual policies otherwise required, the Master Servicer or the Special Servicer, as the case may be, shall conclusively be deemed to have satisfied its obligation to cause hazard insurance to be maintained on the related Mortgaged Properties or and/or REO Properties, as applicable. Such a blanket or master force-placed policy may contain a deductible clause (not in excess of a customary amount), in which case the Master Servicer or the Special Servicer, as the case may be, whichever maintains such policyappropriate, shall, if there shall not have been maintained on any the related Mortgaged Property securing a Mortgage Loan or any REO Property thereunder a hazard insurance policy complying with the requirements of Section 3.07(a), and there shall have been one or more losses that would have been covered by such an individual policy, promptly deposit into the Collection Certificate Account maintained by or if funds are to be applied to the Master Servicerrestoration or repair of the related Mortgaged Property, the Servicing Account, from its own funds without any right of reimbursement from the Trust, the amount not otherwise payable under the blanket or master force-placed policy in connection with such loss or losses because of such deductible clause to the extent that any such deductible exceeds the deductible limitation that pertained pertain to the related Mortgage Loan (or, in the absence of any such deductible limitation, the deductible limitation for an individual policy which is consistent with the Servicing Standard)Loan. The Master Servicer and or the Special Servicer Servicer, as appropriate, shall each prepare and present, on behalf of itself, the Trustee and Certificateholders, claims under any such blanket or master force-placed policy maintained by it in a timely fashion in accordance with the terms of such policy.
(c) With respect to each Performing Mortgage Loan that is subject to an Environmental Insurance Policy, if the Master Servicer has actual knowledge of any event (an “Insured Environmental Event”) giving rise to a claim under an Environmental Insurance Policy, the Master Servicer shall notify the Special Servicer to such effect and the Master Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each Specially Serviced Mortgage Loan that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall notify the Master Servicer, which shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. With respect to each REO Property that is subject to an Environmental Insurance Policy, if the Special Servicer has actual knowledge of any event giving rise to a claim under an Environmental Insurance Policy, the Special Servicer shall take reasonable actions as are in accordance with the Servicing Standard and the terms and conditions of such Environmental Insurance Policy to make a claim thereunder and achieve the payment of all amounts to which the Trust is entitled thereunder. Any legal fees or other out-of-pocket costs incurred in accordance with the Servicing Standard in connection with any claim under an Environmental Insurance Policy described above (whether by the Master Servicer or the Special Servicer) shall be (subject to Section 3.11(h) and Section 3.19(b)) paid by, and reimbursable to, the Master Servicer or Special Servicer, as the case may be, as a Servicing Advance.
(d) The Master Servicer and the Special Servicer shall each at all times during the term of this Agreement (or, in the case of the Special Servicer, at all times during the term of this Agreement during which Specially Serviced Mortgage Loans and/or REO Properties exist as part of the Trust Fund) keep in force with a Qualified Insurer having the Required Claims-Paying Ratings, a fidelity bond in such form and amount as are consistent with the Servicing Standard. The Master Servicer or Special Servicer shall be deemed to have complied with the foregoing provision if an Affiliate thereof 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 the case may be. Such fidelity bond shall provide that it may not be canceled without ten (10) days’ prior written notice to the Trustee. So long as the long-term unsecured debt obligations of the Master Servicer or Special Servicer, or such party’s corpora
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Merrill Lynch Mortgage Investors Inc)