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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL I INC.,
AS DEPOSITOR,
AND
AMRESCO SERVICES, L.P.,
AS MASTER SERVICER,
AND
BANC ONE MORTGAGE CAPITAL MARKETS, LLC,
AS SPECIAL SERVICER,
AND
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
AS TRUSTEE,
POOLING AND SERVICING AGREEMENT
DATED AS OF APRIL 1, 1999
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-FNV1
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS...................................................................4
Section 1.1. Definitions................................................................4
Section 1.2. Certain Calculations in Respect of the Mortgage Pool......................44
Section 1.3. Interpretation............................................................45
ARTICLE II. DECLARATION OF TRUST; ISSUANCES OF CERTIFICATES..............................45
Section 2.1. Conveyance of Mortgage Loans..............................................45
Section 2.2. Acceptance by Trustee.....................................................47
Section 2.3. Sellers'Repurchase of Mortgage Loans for Document Defects and
Breaches of Representations and Warranties...............................48
Section 2.4. Representations and Warranties............................................50
Section 2.5. Conveyance of Interests...................................................51
ARTICLE III. THE CERTIFICATES.............................................................51
Section 3.1. The Certificates..........................................................51
Section 3.2. Registration..............................................................52
Section 3.3. Transfer and Exchange of Certificates.....................................52
Section 3.4. Mutilated, Destroyed, Lost or Stolen Certificates.........................58
Section 3.5. Persons Deemed Owners.....................................................58
Section 3.6. Book-Entry Certificates...................................................59
Section 3.7. Notices to Clearing Agency................................................59
Section 3.8. Definitive Certificates...................................................60
ARTICLE IV. ADVANCES.....................................................................60
Section 4.1. P&I Advances by Master Servicer...........................................60
Section 4.2. Servicing Advances........................................................61
Section 4.3. Advances by Trustee.......................................................62
Section 4.4. Evidence of Nonrecoverability.............................................63
Section 4.5. Advance Interest..........................................................63
Section 4.6. Reserved..................................................................63
Section 4.7. Reserved..................................................................63
Section 4.8. Reserved..................................................................63
ARTICLE V. COLLECTION ACCOUNT; DISTRIBUTION ACCOUNT; CERTAIN TRUSTEE
REPORTS......................................................................64
Section 5.1. Collection Account........................................................64
Section 5.2. Application of Funds in the Collection Account............................66
Section 5.3. Distribution Account; Excess Interest Distribution Account;
Interest Reserve Account.................................................69
Section 5.4. Trustee Reports; Access to Information....................................71
Section 5.5. Trustee Tax Reports.......................................................74
ARTICLE VI. DISTRIBUTIONS................................................................74
Section 6.1. Distributions Generally...................................................74
Section 6.2. REMIC I...................................................................75
Section 6.3. REMIC II..................................................................76
i
Section 6.4. REMIC III.................................................................80
Section 6.5. Allocation of Realized Losses and Expense Losses..........................86
Section 6.6. Appraisal Reductions......................................................86
Section 6.7. Compliance with Withholding Requirements..................................87
ARTICLE VII. CONCERNING THE TRUSTEE.......................................................87
Section 7.1. Duties of Trustee.........................................................87
Section 7.2. Certain Matters Affecting the Trustee.....................................89
Section 7.3. Trustee Not Liable for Certificates or Interests or Mortgage
Loans....................................................................90
Section 7.4. Trustee May Own Certificates..............................................91
Section 7.5. Eligibility Requirements for Trustee......................................91
Section 7.6. Resignation and Removal of Trustee........................................91
Section 7.7. Successor Trustee.........................................................92
Section 7.8. Merger or Consolidation of Trustee........................................92
Section 7.9. Appointment of Co-Trustee, Separate Trustee or Custodian.................93
Section 7.10. Authenticating Agents.....................................................94
Section 7.11. Indemnification...........................................................95
Section 7.12. Fees and Expenses of Trustee..............................................96
Section 7.13. Collection of Moneys......................................................96
Section 7.14. Notification to Holders...................................................97
Section 7.15. Representations and Warranties of Trustee.................................97
Section 7.16. Reserved..................................................................98
Section 7.17. Reserved..................................................................98
Section 7.18. Impact of Year 2000 Compliance............................................98
ARTICLE VIII. ADMINISTRATION AND SERVICING OF MORTGAGE LOANS...............................98
Section 8.1. Servicing Standard; General Powers and Duties.............................98
Section 8.2. Collection of Mortgage Loan Payments.....................................100
Section 8.3. Collection of Taxes, Assessments and Similar Items; Servicing
Accounts and Reserve Accounts...........................................101
Section 8.4. Sub-Servicing Agreements.................................................102
Section 8.5. Maintenance of Insurance Policies; Errors and Omissions and
Fidelity Coverage.......................................................104
Section 8.6. Enforcement of Due-On-Sale Clauses; Assumption Agreements;
Subordinate Financing...................................................107
Section 8.7. Realization Upon Defaulted Mortgage Loans................................108
Section 8.8. Trustee to Cooperate; Release of Mortgage Files..........................111
Section 8.9. Documents, Records and Funds in Possession of Master Servicer
or Special Servicer to be Held for Trustee for the Benefit
of Certificateholders...................................................112
Section 8.10. Servicing Compensation...................................................112
Section 8.11. Master Servicer Reports; Account Statements..............................115
Section 8.12. Annual Statement as to Compliance........................................115
Section 8.13. Annual Independent Public Accountants'Servicing Report...................115
Section 8.14. Certain Reports Regarding the Mortgage Loans and the
Mortgaged Properties....................................................116
Section 8.15. Certain Available Information and Related Rights of the
Master Servicer and the Special Servicer................................119
Section 8.16. Rule 144A Information....................................................120
ii
Section 8.17. Inspections; Collection of Financial Statements..........................121
Section 8.18. Modifications, Waivers, Amendments, Extensions and Consents..............122
Section 8.19. Title to REO Property....................................................125
Section 8.20. Management of REO Property...............................................127
Section 8.21. Additional Obligations of the Master Servicer............................129
Section 8.22. Representations, Warranties and Covenants of the Master
Servicer and the Special Servicer.......................................130
Section 8.23. Merger or Consolidation..................................................133
Section 8.24. Resignation of Master Servicer or Special Servicer.......................133
Section 8.25. Assignment or Delegation of Duties by Master Servicer or the
Special Servicer........................................................134
Section 8.26. Limitation on Liability of Master Servicer, Special Servicer
and Others..............................................................134
Section 8.27. Indemnification; Third-Party Claims......................................135
Section 8.28. Tax Reporting............................................................137
Section 8.29. Certain Special Servicer Reports.........................................137
Section 8.30. Qualification to Service.................................................139
Section 8.31. Sale of Defaulted Mortgage Loans and REO Properties......................139
Section 8.32. Operating Adviser; Elections.............................................140
Section 8.33. Duties of Operating Adviser..............................................141
Section 8.34. Exchange Act Reporting...................................................142
Section 8.35. Automatic Resignation of Master Servicer and Special Servicer
in Connection with an Adverse Rating Event.................................
ARTICLE IX. DEFAULT.....................................................................143
Section 9.1. Events of Default........................................................143
Section 9.2. Trustee to Act; Appointment of Successor.................................145
Section 9.3. Notification to Certificateholders.......................................146
Section 9.4. Waiver of Events of Default..............................................146
ARTICLE X. PURCHASE AND TERMINATION OF THE TRUST.......................................146
Section 10.1. Termination of Trust.....................................................146
Section 10.2. Procedure Upon Termination of Trust......................................148
Section 10.3. Additional Trust Termination Requirements................................148
ARTICLE XI. RIGHTS OF CERTIFICATEHOLDERS................................................149
Section 11.1. Limitation on Rights of Holders..........................................149
Section 11.2. Access to List of Holders................................................150
Section 11.3. Acts of Holders of Certificates..........................................151
ARTICLE XII. REMIC ADMINISTRATION........................................................151
Section 12.1. REMIC Administration.....................................................151
Section 12.2. Prohibited Transactions and Activities...................................156
Section 12.3. Liability with Respect to Certain Taxes and Loss of REMIC
Status..................................................................157
Section 12.4. Modifications of Mortgage Loans..........................................157
ARTICLE XIII. MISCELLANEOUS PROVISIONS....................................................157
Section 13.1. Binding Nature of Agreement..............................................157
Section 13.2. Entire Agreement.........................................................157
iii
Section 13.3. Amendment................................................................157
Section 13.4. GOVERNING LAW............................................................158
Section 13.5. Notices..................................................................159
Section 13.6. Severability of Provisions...............................................159
Section 13.7. Indulgences; No Waivers..................................................159
Section 13.8. Headings Not to Affect Interpretation....................................159
Section 13.9. Benefits of Agreement....................................................159
Section 13.10. Special Notices to the Rating Agencies..................................159
Section 13.11. Counterparts............................................................161
Section 13.12. Intention of Parties....................................................161
Section 13.13. Recordation of Agreement................................................163
iv
EXHIBITS
Exhibit A-1 Form of Class A-1 Certificate...............................................A-1
Exhibit A-2 Form of Class A-2 Certificate...............................................A-2
Exhibit A-3 Form of Class B Certificate.................................................A-3
Exhibit A-4 Form of Class C Certificate.................................................A-4
Exhibit A-5 Form of Class D Certificate.................................................A-5
Exhibit A-6 Form of Class E Certificate.................................................A-6
Exhibit A-7 Form of Class F Certificate.................................................A-7
Exhibit A-8 Form of Class G Certificate.................................................A-8
Exhibit A-9 Form of Class H Certificate.................................................A-9
Exhibit A-10 Form of Class J Certificate................................................A-10
Exhibit A-11 Form of Class K Certificate................................................A-11
Exhibit A-12 Form of Class L Certificate................................................A-12
Exhibit A-13 Form of Class M Certificate................................................A-13
Exhibit A-14 Form of Class N Certificate................................................A-14
Exhibit A-15 Form of Class O Certificate................................................A-15
Exhibit A-16 Form of Class R-I Certificate..............................................A-13
Exhibit A-17 Form of Class R-II Certificate.............................................A-14
Exhibit A-18 Form of Class R-III Certificate............................................A-15
Exhibit A-19 Form of Class X Certificate................................................A-16
Exhibit B-1 Form of Initial Certification of Trustee....................................B-1
Exhibit B-2 Form of Final Certification of Trustee......................................B-2
Exhibit C Form of Request for Release.................................................C-1
Exhibit D-1 Form of Transferor Certificate for Transfers of Definitive Privately
Offered Certificates......................................................D-1-1
Exhibit D-2A Form I of Transferee Certificate for Transfers of Definitive Privately Offered
Certificates.............................................................D-2A-1
Exhibit D-2B Form II of Transferee Certificate for Transfers of Definitive Privately
Offered
Certificates.............................................................D-2B-1
Exhibit D-3A Form I of Transferee Certificate for Transfers of Interests in Book-Entry
Privately Offered Certificates...........................................D-3A-1
Exhibit D-3B Form II of Transferee Certificate for Transfers of Interests in Book-Entry
Privately Offered Certificates...........................................D-3B-1
Exhibit E Form of Transferor Certificate for Transfers of REMIC Residual Certificate..E-1
Exhibit F Form of Transfer Affidavit and Agreement for Transfers of REMIC Residual
Certificates................................................................F-1
Exhibit G Form of Monthly Certificateholder Report....................................G-1
Exhibit H-1 Comparative Financial Status Report.........................................H-1
Exhibit H-2 Delinquent Loan Status Report...............................................H-2
Exhibit H-3 Historical Loan Modification Report.........................................H-3
Exhibit H-4 Historical Loss Estimate Report.............................................H-4
Exhibit H-5 REO Status Report...........................................................H-5
Exhibit H-6 Watch List .................................................................H-6
Exhibit H-7 Operating Statement Analysis................................................H-7
Exhibit H-8 NOI Adjustment Worksheet ...................................................H-8
Exhibit H-9 CSSA Reports ...............................................................H-9
Exhibit H-10 CSSA Reports ..............................................................H-10
Exhibit H-11 CSSA Reports ..............................................................H-11
v
Exhibit I Mortgage Loan Report........................................................I-1
SCHEDULES
Schedule I FINOVA Loan Schedule..........................................................I
Schedule II Owner Trust Loan Schedule....................................................II
Schedule III Interest Reserve Loans......................................................III
vi
THIS POOLING AND SERVICING AGREEMENT is dated and effective as of
April 1, 1999 (this "AGREEMENT") among ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL I INC., as
depositor (the "DEPOSITOR"), AMRESCO SERVICES, L.P., as master servicer (the
"MASTER SERVICER"), BANC ONE MORTGAGE CAPITAL MARKETS, LLC, as special servicer
(the "SPECIAL SERVICER"), and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as
trustee (the "TRUSTEE") of the trust created hereby (the "TRUST").
PRELIMINARY STATEMENT
On the Closing Date, the Depositor will acquire certain Mortgage
Loans from FINOVA Realty Capital Inc., as seller ("FINOVA" and, in such
capacity, the "SELLER"), and the remaining Mortgage Loans from FINOVA Commercial
Mortgage Loan Owner Trust 1998-1 (the "OWNER TRUST" and, in such capacity, also
a "SELLER"), and, as of such date, the Depositor will be the owner of the
Mortgage Loans and the other property being conveyed by it to the Trustee for
inclusion in the Trust. On the Closing Date, the Depositor hereby creates the
Trust and appoints the Trustee to serve as trustee of the Trust. On the Closing
Date, the Depositor will acquire (i) the REMIC I Regular Interests and the Class
R-I Certificates as consideration for its transfer to the Trust of the Mortgage
Loans (excluding the right to Excess Interest in respect of the Anticipated
Repayment Date Loans) and the other property constituting the Trust described in
the definition of "REMIC I"; (ii) the REMIC II Regular Interests and the Class
R-II Certificates as consideration for its transfer of the REMIC I Regular
Interests to the Trust; and (iii) the REMIC III Certificates as consideration
for its transfer of the REMIC II Regular Interests and the assets comprising the
grantor trust to the Trust. The Depositor has duly authorized the execution and
delivery of this Agreement to provide for the foregoing and the issuance of (a)
the REMIC I Regular Interests and the Class R-I Certificates representing in the
aggregate the entire beneficial ownership of REMIC I, (b) the REMIC II Regular
Interests and the Class R-II Certificates representing in the aggregate the
entire beneficial ownership of REMIC II and (c) the REMIC III Certificates
representing in the aggregate the entire beneficial ownership of REMIC III, with
the Class O Certificates representing both an interest in REMIC III and the
entire beneficial ownership of the assets of the grantor trust. All covenants
and agreements made by the Depositor and the Trustee herein with respect to the
Mortgage Loans and the other property constituting the Trust are for the benefit
of the Holders of the Certificates. The parties hereto are entering into this
Agreement, and the Trustee is accepting the trusts created hereby, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
1
REMIC I
As provided herein, the Trustee will make the election described
in Section 12.1 hereof for the segregated pool of assets consisting of the
Mortgage Loans (excluding the right to Excess Interest in respect of the
Anticipated Repayment Date Loans) and certain related assets to be treated for
federal income tax purposes as a real estate mortgage investment conduit (a
"REMIC" and, such particular segregated pool of assets, "REMIC I"). The REMIC I
Regular Interests will be designated as the "regular interests" in REMIC I and
the Class R-I Certificates will be designated as the sole class of "residual
interests" in REMIC I.
A separate uncertificated REMIC I Regular Interest will be issued
with respect to each Mortgage Loan. Each REMIC I Regular Interest will represent
the right to receive principal corresponding to the initial Stated Principal
Balance of a related Mortgage Loan and interest thereon at a remittance rate
(the "REMIC I REMITTANCE RATE") equal to the Net Mortgage Rate of the related
Mortgage Loan in effect. For purposes of Treasury regulation Section 1.860G-1
(a)(4)(iii), the "latest possible maturity date" for each REMIC I Regular
Interest shall be the Rated Final Distribution Date. The Class R-I Certificates
will represent the sole class of residual interests in REMIC I for purposes of
the REMIC Provisions and will have no principal balances and no remittance rate,
but will be entitled to receive on each Distribution Date any portion of the
Available Distribution Amount for such Distribution Date not otherwise deemed
distributed on the REMIC I Regular Interests.
REMIC II
As provided herein, the Trustee will make the election described
in Section 12.1 hereof for the segregated pool of assets consisting of the REMIC
I Regular Interests to be treated for federal income tax purposes as a separate
REMIC (such particular pool of assets, "REMIC II"). The REMIC II Regular
Interests will be designated as representing the "regular interests" in REMIC II
and the Class R-II Certificates will be designated as representing the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions.
Fifteen separate uncertificated REMIC II Regular Interests will
be issued and are designated as the "regular interests" in REMIC II. The
following table irrevocably sets forth the designation, initial remittance rate
(the "REMIC II REMITTANCE RATE") and initial Uncertificated Principal Balance
for each REMIC II Regular Interest. For purposes of Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" of each REMIC II
Regular Interest shall be the Rated Final Distribution Date. The Class R-II
Certificates will have no principal balances and no remittance rate, but will be
entitled to receive on each Distribution Date any portion of the REMIC II
Distribution Amount for such Distribution Date not otherwise deemed distributed
on the REMIC II Regular Interests.
2
REMIC II REGULAR INTERESTS
--------------------------------------------------------------------------------------------
INITIAL REMIC II INITIAL UNCERTIFICATED
DESIGNATION REMITTANCE RATE PRINCIPAL BALANCE
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A-1 7.49% $101,000,000
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A-2 7.49% $339,885,000
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B 7.49% $ 33,185,000
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C 7.49% $ 26,864,000
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D 7.49% $ 12,642,000
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E 7.49% $ 30,025,000
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F 7.49% $ 14,222,000
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G 7.49% $ 20,543,000
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H 7.49% $ 7,901,000
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J 7.49% $ 9,481,000
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K 7.49% $ 7,902,000
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L 7.49% $ 6,321,000
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M 7.49% $ 6,321,000
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N 7.49% $ 9,481,000
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O 7.49% $ 6,321,383
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REMIC III
As provided herein, the Trustee will make the election described
in Section 12.1 for the segregated pool of assets hereof consisting of the REMIC
II Regular Interests to be treated for federal income tax purposes as a separate
REMIC (such particular pool of assets, "REMIC III"). The REMIC III Regular
Certificates (and, in the case of the Class O Certificates, the Class O REMIC
Interest represented by the Class O Certificates) will be designated as
representing the "regular interests" in REMIC III and the Class R-III
Certificates will be designated as representing the sole class of "residual
interests" in REMIC III for purposes of the REMIC Provisions.
Sixteen separate Classes of REMIC III Regular Certificates will
be issued, which will represent in the aggregate thirty separate "regular
interests" in REMIC III. The following table irrevocably sets forth the
designation, the pass-through rate (the "PASS-THROUGH RATE") and the initial
aggregate principal balance (the "CLASS PRINCIPAL BALANCE") for each Class of
REMIC III Regular Certificates. For purposes of Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" of each Class of REMIC
III Regular Certificates shall be the Rated Final Distribution Date. The Class
R-III Certificates will have no principal balances and no pass-through rate, but
will be entitled to receive on each Distribution Date any portion of the REMIC
III Distribution Amount for such Distribution Date not otherwise deemed
distributed on the REMIC III Regular Certificates.
3
REMIC III REGULAR CERTIFICATES
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INITIAL INITIAL CLASS
DESIGNATION PASS-THROUGH RATE(1) PRINCIPAL BALANCE
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Class A-1 6.12% per annum $101,000,000
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Class A-2 6.53% per annum $339,885,000
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Class X(2) 0.98376% per annum $632,094,383
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Class B 6.66% per annum $ 33,185,000
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Class C 6.80% per annum $ 26,864,000
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Class D 7.03% per annum $ 12,642,000
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Class E 7.46374% per annum $ 30,025,000
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Class F 7.46374% per annum $ 14,222,000
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Class G 6.12% per annum $ 20,543,000
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Class H 6.12% per annum $ 7,901,000
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Class J 6.12% per annum $ 9,481,000
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Class K 6.12% per annum $ 7,902,000
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Class L 6.12% per annum $ 6,321,000
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Class M 6.12% per annum $ 6,321,000
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Class N 6.12% per annum $ 9,481,000
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Class O(3) 6.12% per annum $ 6,321,383
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ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINITIONS. Whenever used in this Agreement,
including without limitation in the Preliminary Statement, the following words
and phrases, unless the context otherwise requires, shall have the following
meanings:
"ACCOUNTANT" means a person engaged in the practice of accounting
who is Independent and is a member of the American Institute of Certified Public
Accountants.
"ACCRUED CERTIFICATE INTEREST" means with respect to any Class of
REMIC III Regular Certificates (other than the Class X Certificates) for any
Distribution Date, the product of the Certificate Principal Balance of such
Class as of the close of the preceding Distribution Date (or, in the case of the
first Distribution Date, as of the Closing Date) and one-twelfth of the
applicable Pass-Through Rate; and
1 The Pass-Through Rates for the Class A-1, Class A-2, Class B, Class C,
Class D, Class G, Class H, Class J, Class K, Class L, Class M, Class N
and Class O Certificates for each Distribution Date shall be equal to
the Fixed Rates per annum set forth in the table; provided, in each
case, that the Pass-Through Rate will not exceed the weighted average
of the REMIC II Remittance Rates for such Distribution Date.
2 The Class X Certificates will not have a Principal Amount. Interest
will accrue on the notional amount thereof, at a rate equal to the
weighted average of the REMIC II Remittance Rates minus the weighted
average of the Pass-Through Rates of the classes of certificates that
have Principal Amounts.
3 The Class O Certificates are an investment unit consisting of a REMIC
regular interest and beneficial ownership of Excess Interest in respect
of mortgage loans having a hyper-amortization feature.
4
with respect to the Class X Certificates, the Class X Accrued Certificate
Interest. The Accrued Certificate Interest in respect of each Class of REMIC
III Regular Certificates for each Distribution Date shall accrue on the basis
of a 360-day year consisting of twelve 30-day months.
"ACT" shall have the meaning set forth in Section 11.3.
"ADDITIONAL MASTER SERVICING COMPENSATION" has the meaning set
forth in Section 8.10(a).
"ADDITIONAL SPECIAL SERVICING COMPENSATION" has the meaning set
forth in Section 8.10(b).
"ADDITIONAL TRUST EXPENSE" means any of the following items: (a)
Special Servicing Fees, Liquidation Fees and Workout Fees; (b) Advance Interest
not paid out of Default Interest, (c) amounts paid by the Trust to indemnify the
Master Servicer, the Special Servicer, the Trustee, or any other Person pursuant
to the terms of this Agreement; (d) the items described in clauses (ix) and
(xiii) of Section 5.2(b); (e) to the extent not covered by indemnification by
one of the parties hereto or paid by a source other than the Trust, any federal,
state or local taxes imposed on the Trust or any of its assets or transactions;
and (f) to the extent not included in the calculation of a Realized Loss and not
covered by indemnification by one of the parties hereto or otherwise, any other
unanticipated cost, liability, or expense of the Trust which the Trust has not
recovered, and in the judgment of the Master Servicer (or, in the case of a
Specially Serviced Mortgage Loan, the Special Servicer) will not recover, from
the related Mortgagor or Mortgaged Property or otherwise.
"ADVANCE" means either a P&I Advance or a Servicing Advance.
"ADVANCE INTEREST" means interest payable pursuant to Section 4.5
to the Master Servicer, the Special Servicer or the Trustee on outstanding
Advances made by any such Person out of its own funds.
"ADVANCE RATE" means a per annum rate equal to the Prime Rate as
published in the "Money Rates" section of The Wall Street Journal from time to
time or such other publication as determined by the Trustee in its reasonable
discretion.
"ADVERSE RATING EVENT" shall have the meaning set forth in
Section 8.35(a).
"ADVERSE REMIC EVENT" shall have the meaning set forth in Section
12.1(j).
"AFFILIATE" means, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGREEMENT" means this Pooling and Servicing Agreement and all
amendments and supplements hereto.
"ANTICIPATED REPAYMENT DATE" means as to any Mortgage Loan the
date prior to the stated maturity thereof that the Mortgage Rate and the rate of
principal amortization increases.
5
"ANTICIPATED REPAYMENT DATE LOAN" means any Mortgage Loan that
provides for a Balloon Payment on a stated date prior to its Stated Maturity
Date, and provides for an increased Mortgage Rate and/or rate of principal
amortization following such date if the Mortgage Loan remains outstanding.
"APPRAISAL" means an appraisal by a Qualified Appraiser that is
prepared in accordance with 12 C.F.R. 225.64.
"APPRAISAL EVENT" means, with respect to any Mortgage Loan
(including without limitation an REO Mortgage Loan), not later than the earliest
of (i) the date 120 days after the occurrence of any delinquency in payment with
respect to such Mortgage Loan if such delinquency remains uncured, (ii) the date
60 days after receipt of notice that a bankruptcy petition has been filed in
respect of the Mortgagor or a receiver is appointed in respect of the related
Mortgaged Property, provided such petition or appointment is still in effect,
(iii) the effective date of any modification to a Money Term of a Mortgage Loan,
other than the extension of the date that a Balloon Payment is due for a period
of less than six months from the initial maturity date, and (iv) the date 30
days following the date the related Mortgaged Property becomes an REO Property.
"APPRAISAL REDUCTION" means, with respect to any Required
Appraisal Loan with respect to which an Appraisal or internal valuation is
performed pursuant to Section 6.6, an amount, calculated as of the first
Determination Date that is at least fifteen days after the date on which the
report in respect of the most recent such Appraisal or internal valuation, as
the case may be, is completed, equal to the excess, if any, of (a) the sum of
(i) the Stated Principal Balance of such Required Appraisal Loan, (ii) to the
extent not previously advanced, all unpaid interest on such Mortgage Loan at a
per annum rate equal to the Mortgage Rate, (iii) all unreimbursed Advances and
interest on Advances at the Advance Rate with respect to such Mortgage Loan, and
(iv) to the extent not previously advanced by the Master Servicer or the
Trustee, all currently due and unpaid real estate taxes and assessments,
insurance premiums and, if applicable, ground rents in respect of the related
Mortgaged Property or REO Property, as the case may be (in each case, net of any
amounts escrowed for such items), over (b) 90% of the Appraised Value (net of
any prior mortgage liens) of the related Mortgaged Property or REO Property as
determined by such Appraisal or internal valuation, as the case may be.
Notwithstanding the foregoing, if an internal valuation of the Mortgaged
Property is performed, the Appraisal Reduction will equal the greater of (A) the
amount calculated above and (B) 25% of the Stated Principal Balance of the
Mortgage Loan. Furthermore, if an appraisal is not obtained from an MAI
appraiser following the earliest of the dates described in clauses (i)-(iv) in
the definition of "Appraisal Event", then until such an appraisal is obtained
the Appraisal Reduction will equal 25% of the Stated Principal Balance of the
Mortgage Loan. Each Appraisal Reduction will be reduced to zero as of the date
the related Mortgage Loan is brought current under the then-current terms of the
Mortgage Loan for at least three consecutive months, paid in full, liquidated,
repurchased or otherwise disposed of. An appraisal for any Required Appraisal
Loan that has not been brought current for at least three consecutive months (or
paid in full, liquidated, repurchased or otherwise disposed of) will be updated
annually, with corresponding adjustments to the amount of the Appraisal
Reduction.
"APPRAISED VALUE" means, with respect to any Mortgaged Property
or REO Property, the appraised value thereof determined by an Appraisal of such
property or, in the case of an internal valuation performed pursuant to Section
6.6, the value of such property determined by such internal valuation.
"ASSET STATUS REPORT" has the meaning set forth in Section
8.29(c).
6
"ASSIGNMENT OF LEASES" means, with respect to any Mortgage Loan,
any assignment of leases, rents and profits or equivalent instrument, whether
contained in the related Mortgage or executed separately, assigning to the
holder or holders of such Mortgage all of the related Mortgagor's interest in
the leases, rents and profits derived from the ownership, operation, leasing or
disposition of all or a portion of the related Mortgaged Property as security
for repayment of such Mortgage Loan.
"ASSIGNMENT OF MORTGAGE" means an assignment of the Mortgage,
notice of transfer or equivalent instrument, in recordable form, sufficient
under the laws of the jurisdiction wherein the related Mortgaged Property is
located to reflect the transfer of the Mortgage to the Trustee, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering the Mortgage Loans secured by Mortgaged
Properties located in the same jurisdiction, if permitted by law.
"ASSUMED MONTHLY PAYMENT" means, (a) with respect to any Balloon
Mortgage Loan (other than a Balloon Mortgage Loan that has become an REO
Mortgage Loan) for its Stated Maturity Date (provided that such Mortgage Loan
has not been paid in full, and no other Liquidation Event has occurred in
respect thereof, on or before the end of the Collection Period in which such
Stated Maturity Date occurs) and for any subsequent Due Date therefor as of
which such Mortgage Loan remains outstanding and part of the Trust Fund, if no
Monthly Payment (other than the related delinquent Balloon Payment) is otherwise
due for such Due Date, the scheduled monthly payment of principal and/or
interest deemed to be due in respect thereof for such Due Date equal to the
Monthly Payment (other than any related delinquent Balloon Payment) that would
have been due in respect of such Mortgage Loan on such Due Date if it had been
required to continue to accrue interest in accordance with its terms, and to pay
principal in accordance with the amortization schedule (if any), in effect
immediately prior to, and without regard to the occurrence of, its most recent
scheduled Maturity Date; and (b) with respect to any REO Mortgage Loan, for any
Due Date therefor as of which the related REO Property remains part of the Trust
Fund, the scheduled monthly payment of principal and/or interest deemed to be
due in respect thereof on such Due Date equal to the Monthly Payment (or, in the
case of a Balloon Mortgage Loan described in clause (a) of this definition, the
Assumed Monthly Payment) that was due in respect of the subject Mortgage Loan
for the last Due Date prior to its becoming an REO Mortgage Loan.
"AUTHENTICATING AGENT" means any authenticating agent appointed
by the Trustee pursuant to Section 7.10.
"AUTHORIZED OFFICER" means any Person that may execute an
Officer's Certificate on behalf of the Depositor.
"AVAILABLE DISTRIBUTION AMOUNT" means (x) with respect to REMIC I
and any Distribution Date, an amount equal to the aggregate of (a) all amounts
on deposit in the Distribution Account as of the commencement of business on
such Distribution Date (including any deposits or withdrawals pursuant to
Section 5.3.2 ) that represent payments and other collections on or in respect
of the Mortgage Loans and any REO Properties that were received by the Master
Servicer or the Special Servicer through the end of the related Collection
Period (exclusive of any such amounts that were deposited in the Distribution
Account in error, that are payable to the Trustee in respect of unpaid Trustee
Fees, that are Excess Interest or that constitute Prepayment Premiums) and (b)
if and to the extent not already among the amounts described in clause (a), (i)
the aggregate amount of any P&I Advances made by the Master Servicer or the
Trustee for such Distribution Date pursuant to Section 4.1 and/or Section 4.3
and (ii) the aggregate of any Compensating Interest Payments made by the Master
Servicer for such Distribution Date pursuant to Section 8.21(b); (y) with
respect to REMIC II and any Distribution Date, all amounts distributed on the
REMIC I Regular Interests; and (z) with respect to REMIC III and any
7
Distribution Date, all amounts distributed on the REMIC II Regular Interests.
"BALLOON MORTGAGE LOAN" means any Mortgage Loan that by its
original terms or by virtue of any modification entered into as of the Closing
Date provides for an amortization schedule extending beyond its Maturity Date.
"BALLOON PAYMENT" means, with respect to any Balloon Mortgage
Loan as of any date of determination, the Monthly Payment payable on the
Maturity Date of such Mortgage Loan.
"BANKRUPTCY CODE" means the federal bankruptcy code, as amended
from time to time (Title II of the United States Code).
"BOOK-ENTRY CERTIFICATES" means certificates evidencing a
beneficial interest in a Class of Certificates, ownership and transfer of which
shall be made through book entries as described in Section 3.6; provided, that
after the occurrence of a condition whereupon book-entry registration and
transfer are no longer authorized and Definitive Certificates are to be issued
to the Certificate Owners, such certificates shall no longer be "Book-Entry
Certificates."
"BREACH" has the meaning set forth in Section 2.3(a).
"BUSINESS DAY" means any day other than (i) a Saturday or a
Sunday, (ii) a legal holiday in New York, New York or in any of the principal
cities in which the Trustee, the Master Servicer or the Special Servicer
conducts trust or servicing operations with respect to this Agreement, or (iii)
a day on which banking institutions or savings associations in New York, New
York or in any of the principal cities in which the Trustee, the Master Servicer
or the Special Servicer conducts trust or servicing operations with respect to
this Agreement, are authorized or obligated by law or executive order to be
closed.
"CASH LIQUIDATION" means, as to any defaulted Mortgage Loan other
than an REO Mortgage Loan, the receipt of all related Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds and other payments or recoveries in
connection with a Final Recovery Determination.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. ss. 9601, et
seq.).
"CERTIFICATES" means the Depositor's Series 1999-FNV1 Commercial
Mortgage Pass-Through Certificates issued hereunder.
"CERTIFICATE FACTOR" means, with respect to any Class of REMIC
III Regular Certificates, as of any date of determination, a fraction, expressed
as a decimal carried to eight places, the numerator of which is the then-related
Class Principal Balance or Class X Notional Amount, as the case may be, and the
denominator of which is the related initial Class Principal Balance or initial
Class X Notional Amount, as the case may be, as of the Closing Date.
"CERTIFICATE NOTIONAL AMOUNT" means, with respect to any Class X
Certificate as of any date of determination, the then notional principal amount
on which such Certificate accrues interest equal to the product of (a) the
Percentage Interest evidenced by such Certificate, multiplied by (b) the then
Class X Notional Amount. For purposes of the REMIC Provisions, the Class X
Notional Amount
8
may be described as the sum of the Component Notional Amounts of the Component
Interests at such time.
"CERTIFICATE OWNER" means, with respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Certificate as
reflected on the books of the Clearing Agency or on the books of a Person
maintaining an account with the Clearing Agency directly or as an indirect
participant, in accordance with the rules of the Clearing Agency.
"CERTIFICATE PRINCIPAL BALANCE" means, with respect to any
Principal Balance Certificate, as of any date of determination, the
then-outstanding principal amount of such Certificate equal to the product of
(a) the Percentage Interest evidenced by such Certificate, multiplied by (b) the
then Class Principal Balance of the Class of Certificates to which such
Certificate belongs.
"CERTIFICATE REGISTER" has the meaning provided in Section 3.2.
"CERTIFICATE REGISTRAR" means the registrar appointed pursuant to
Section 3.2.
"CERTIFICATEHOLDER" has the same meaning as "Holder."
"CLASS" means, collectively, all of the Certificates bearing the
same alphabetical or alphanumerical class designation.
"CLASS A-1 CERTIFICATES," "CLASS A-2 CERTIFICATES," "CLASS X
CERTIFICATES," "CLASS B CERTIFICATES," "CLASS C CERTIFICATES," "CLASS D
CERTIFICATES," "CLASS E CERTIFICATES," "CLASS F CERTIFICATES," "CLASS G
CERTIFICATES," "CLASS H CERTIFICATES," "CLASS J CERTIFICATES," "CLASS K
CERTIFICATES," "CLASS L CERTIFICATES," "CLASS M CERTIFICATES," "CLASS N
CERTIFICATES," "CLASS O CERTIFICATES," "CLASS R-I CERTIFICATES," "CLASS R-II
CERTIFICATES," and "CLASS R-III CERTIFICATES" mean the Certificates designated
as "Class A-1," "Class A-2," "Class X," "Class B," "Class C," "Class D," "Class
E," "Class F," "Class G," "Class H," "Class J," "Class K," "Class L," "Class M,"
"Class N," "Class O," "Class R-I," "Class R-II," and "Class R-III,"
respectively, on the faces thereof, in substantially the forms attached hereto
as Exhibits A-1 through A-19 hereof.
"CLASS A CERTIFICATES" means the Class A-1 Certificates and Class
A-2 Certificates, collectively.
"CLASS E CERTIFICATE RATE" means, with respect to any
Distribution Date, one-twelfth of (x) the REMIC II Remittance Rate minus (y)
0.03%.
"CLASS F CERTIFICATE RATE" means, with respect to any
Distribution Date, one-twelfth of (x) the REMIC II Remittance Rate minus (y)
0.03%.
"CLASS INTEREST SHORTFALL" means, with respect to any Class of
Principal Balance Certificates and any Distribution Date (except the initial
Distribution Date, with respect to which the Class Interest Shortfall for each
such Class will equal zero), the sum of (a) the excess, if any, of (i) all
Distributable Certificate Interest in respect of such Class of Certificates for
the immediately preceding Distribution Date, over (ii) all distributions of
Distributable Certificate Interest made with respect to such Class of
Certificates on the immediately preceding Distribution Date pursuant to Section
6.4, and (b), to the extent permitted by applicable law, interest for the
related Interest Accrual Period accrued at the applicable Pass-Through Rate on
the amount of any such excess described in the immediately preceding clause (a).
With respect to any Class of Principal Balance Certificates, the interest
referred to in clause
9
(b) of the preceding sentence shall accrue on the basis of a 360-day year
consisting of twelve 30-day months.
"CLASS O GRANTOR TRUST INTEREST" means that portion of the rights
represented by the Class O Certificate that evidences beneficial ownership of
the grantor trust assets, as described in Section 12.1(b) hereof.
"CLASS O REMIC INTEREST" means that portion of the rights
represented by the Class O Certificate that evidences a regular interest in
REMIC III, which rights consist of the rights to the distributions described in
Section 6.4 hereof and all other rights of the Holders of the Class O
Certificates other than those comprising the Class O Grantor Trust Interest.
"CLASS PRINCIPAL BALANCE" means the aggregate principal amount of
any Class of Principal Balance Certificates outstanding as of any date of
determination. On each Distribution Date, the Class Principal Balance of each
Class of the Principal Balance Certificates shall be reduced by the amount of
any distributions of principal made thereon on such Distribution Date pursuant
to Section 6.4 and, if and to the extent appropriate, shall be further reduced
on such Distribution Date as provided in Section 6.5.
"CLASS X ACCRUED CERTIFICATE INTEREST" means, with respect to any
Distribution Date, the product of the Class X Notional Amount as of the close of
business on the preceding Distribution Date and one-twelfth of the Class X
Certificate Rate. For purposes of the REMIC Provisions, Class X Accrued
Certificate Interest, with respect to such Class and any Distribution Date, may
be expressed as the sum of the products of the Component Notional Amount of each
Component Interest on such Distribution Date and one-twelfth of the Component
Interest Rate for such Component Interest. Class X Accrued Certificate Interest
shall be calculated on the basis of a 360-day year consisting of twelve 30-day
months.
"CLASS X CERTIFICATE RATE" means, with respect to any
Distribution Date, the excess of (x) REMIC II Remittance Rate over (y) the
weighted average of the Pass-Through Rates of the Principal Balance Certificates
(weighted on the basis of their respective Certificate Balances on such
Distribution Date).
"CLASS X CERTIFICATES" means the Class of Certificates,
representing fifteen Classes of "regular interests" in REMIC III within the
meaning of the REMIC Provisions, that is entitled on each Distribution Date to
receive Accrued Certificate Interest for such Class, and Prepayment Premiums
collected during the related period to the extent set forth in Section 6.4(c),
and is designated as Class X on the face thereof.
"CLASS X NOTIONAL AMOUNT" means the notional principal amount by
reference to which the amount of interest payable to the Holders of the Class X
Certificates is computed and described, which, as of any date of determination,
is equal to the aggregate Class Principal Balances of the Principal Balance
Certificates on such date. For purposes of the REMIC Provisions, the Class X
Notional Amount may be expressed as the sum of the Component Notional Amounts of
all Component Interests of the Class X Certificates as of the date of
determination. The Class X Notional Amount does not represent a right to receive
distributions in respect of amount of principal from the Trust.
"CLEARING AGENCY" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the 1934 Act, which initially shall
be the Depository.
10
"CLOSING DATE" means April 21, 1999.
"CODE" means the Internal Revenue Code of 1986, as amended, any
successor statutes thereto, and applicable U.S. Department of Treasury
regulations issued pursuant thereto in temporary or final form and proposed
regulations thereunder, to the extent applicable to the Trust or any REMIC Pool
by reason of their proposed effective dates.
"COLLECTION ACCOUNT" has the meaning set forth in Section 5.1(a).
"COLLECTION PERIOD" means, with respect to any Distribution Date,
the period beginning on the day after the Determination Date in the month
preceding the month of such Distribution Date (or, in the case of the first
Distribution Date, on the day after the Cut-off Date) and ending on the
Determination Date in the month in which the Distribution Date occurs.
"COMPARATIVE FINANCIAL STATUS REPORT": A report substantially
containing the content described in Exhibit H-1 attached hereto, setting forth,
among other things, the occupancy, revenue, net operating income or net cash
flow, as applicable, and Debt Service Coverage Ratio for each Mortgage Loan as
of the date of the latest financial information available immediately preceding
the preparation of such report for each of the following four periods (to the
extent such information is available): (i) the most current available
year-to-date, (ii) the most recent twelve months, (iii) the previous two full
fiscal years, and (iv) the "base year" (representing the original analysis of
information used as of the Cut-off Date); provided, however, that Debt Service
Coverage Ratio shall not be calculated for any Mortgaged Property for which
twelve months of operating information is not available (including for purposes
of clause (i)) prepared in accordance with Section 8.14(j). For the purposes of
the Master Servicer's production of any such report that is required to state
information for any period prior to the Cut-off Date, the Master Servicer may
conclusively rely (without independent verification), absent manifest error, on
information provided to it by the related Seller.
"COMPENSATING INTEREST PAYMENTS" means, with respect to any
Distribution Date, any payments required to be made by the Master Servicer
pursuant to Section 8.21(b) to cover Prepayment Interest Shortfalls.
"COMPONENT INTEREST" means any of the fifteen component "regular
interests" (within the meaning of the REMIC Provisions) comprising the Class X
Certificates, each of which relates to a separate Class of REMIC II Regular
Interests and bears interest at the Component Interest Rate for such Class on a
notional amount equal to the Uncertificated Principal Balance of the Class of
REMIC II Regular Interests related to such Class (its "COMPONENT NOTIONAL
AMOUNT"). The Component Interests are designated as Class A-1X, Class A-2X,
Class BX, Class CX, Class DX, Class EX, Class FX, Class GX, Class HX, Class JX,
Class KX, Class LX, Class MX, Class NX and Class OX, which interests relate to
REMIC II Regular Interests A-1, A-2, B, C, D, E, F, G, H, J, K, L, M, N and O,
respectively.
"COMPONENT INTEREST RATE" means, with respect to any Component
Interest, the per annum rate equal to the excess of the REMIC II Remittance Rate
for its related Class of REMIC II Regular Interests over the Pass-Through Rate
for the Class of Certificates bearing the same alphabetical designation as such
Component Interest's related Class of REMIC II Regular Interests.
"COMPONENT NOTIONAL AMOUNT" shall have the meaning set forth in
the definition of "Component Interest".
11
"CONDEMNATION PROCEEDS" means any awards resulting from the full
or partial condemnation or any eminent domain proceeding or any conveyance in
lieu or in anticipation thereof with respect to a Mortgaged Property or REO
Property by or to any governmental or quasi-governmental authority.
"CONTROLLING CLASS" means the most subordinate Class of Principal
Balance Certificates outstanding at any time of determination (or, if the then
Class Principal Balance of such Class of Certificates is less than 25% of the
initial Class Principal Balance thereof and there is a more senior Class of
Principal Balance Certificates then outstanding, the next most subordinate Class
of Principal Balance Certificates). For purposes of determining the Controlling
Class, the Class A Certificates will be treated as a single Class of
Certificates, the Subordinate Certificates will be subordinate to the Class A
Certificates, and each Class of Subordinate Certificates will be subordinate to
each other Class of Subordinate Certificates, if any, with an earlier
alphabetical Class designation. As of the Closing Date, the Controlling Class
will be the Class O Certificates.
"CONTROLLING PERSON" means, with respect to any Person, any other
Person that constitutes a "controlling person" within the meaning of Section 15
of the Securities Act.
"CORPORATE TRUST OFFICE" means, with respect to the presentment
and surrender of Certificates for the final distribution thereon or the
presentment and surrender of Certificates for any other purpose, the office of
the Trustee located at Norwest Center, Sixth and Marquette, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Services (CMBS) - ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Capital I Inc., Commercial Mortgage Pass-Through Certificates Series
1999-FNV1, and with respect to all other purposes, the principal corporate trust
office of the Trustee presently located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Services (CMBS) - ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Capital I Inc., Commercial Mortgage Pass Through Certificates, Series 1999-FNV1,
or at such other address as the Trustee may designate from time to time by
notice to the Certificateholders, the Depositor, the Master Servicer and the
Special Servicer.
"CORRECTED MORTGAGE LOAN" means any Mortgage Loan that had been a
Specially Serviced Mortgage Loan, has ceased to be such in accordance with the
definition of "Specially Serviced Mortgage Loan" (other than by reason of a
Liquidation Event occurring in respect of such Mortgage Loan or a related
Mortgaged Property becoming an REO Property) and is not the subject of an
existing Servicing Transfer Event.
"CPR" means an assumed constant rate of prepayment each month
(which is quoted on a per annum basis) relative to the then-outstanding
principal balance of a pool of mortgage loans for the life of such mortgage
loans.
"CROSS-COLLATERALIZED MORTGAGE LOANS" means any two or more
Mortgage Loans listed on the Mortgage Loan Schedule that are
cross-collateralized with each other.
"CSSA" means the Commercial Real Estate Secondary Market and
Securitization Association.
"CSSA REPORTS": With respect to the Mortgage Loans, data files
which contain the information substantially in the forms of the CSSA standard
reporting package attached as Exhibits ▇-▇, ▇-▇▇ ▇▇▇ ▇-▇▇, as the same may be
modified by the CSSA from time to time.
12
"CURRENT PRINCIPAL DISTRIBUTION AMOUNT" means with respect to the
Mortgage Loans for any Distribution Date, an amount equal to the aggregate of:
(a)....the principal portions of all Monthly Payments (other than
Balloon Payments) and any Assumed Monthly Payments due or deemed due, as the
case may be, in respect of the Mortgage Loans, including without limitation any
REO Mortgage Loans, for their respective Due Dates occurring during the related
Collection Period; and
(b)....that portion of all payments (including without limitation
Principal Prepayments and Balloon Payments), Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds, Repurchase Proceeds, payments of Substitution
Shortfall Amounts, REO Income and other collections that were received on or in
respect of the Mortgage Loans (including without limitation any REO Mortgage
Loans) or received on or in respect of any related REO Properties, during the
related Collection Period and were identified and applied by the Master Servicer
in accordance with Section 1.2 as payments or other recoveries of principal of
such Mortgage Loans, in each case net of any portion of such amounts that
represents (i) a payment or other recovery of the principal portion of any
Monthly Payment (other than a Balloon Payment) due, or of the principal portion
of any Assumed Monthly Payment deemed due, in respect of any such Mortgage Loan
on a Due Date during or prior to the related Collection Period and not
previously paid or recovered or (ii) an early payment (other than in the form of
a Principal Prepayment) of the principal portion of any Monthly Payment due in
respect of any such Mortgage Loan on a Due Date subsequent to the end of the
related Collection Period.
"CUSTODIAN" means the Trustee or any Person who is appointed by
the Trustee at any time as custodian pursuant to Section 7.9(h) and who is
unaffiliated with the Depositor and each Seller.
"CUT-OFF DATE" means April 1, 1999 with respect any Mortgage Loan
which has a Due Date that occurs on the first day of each month; or April 11,
1999 with respect to any Mortgage Loan which has a Due Date that occurs on the
eleventh day of each month.
"CUT-OFF DATE PRINCIPAL BALANCE" means, with respect to any
Mortgage Loan included in the Trust Fund as of the Closing Date, the unpaid
principal balance of such Mortgage Loan as of the Cut-off Date, reduced by all
payments of principal due on or before the Cut-off Date, whether or not paid.
"DEBT SERVICE COVERAGE RATIO" means, with respect to any Mortgage
Loan (or group of Cross-Collateralized Mortgage Loans) for any specified period,
the debt service coverage ratio calculated in accordance with Exhibit H-1.
"DEBT SERVICE REDUCTION AMOUNT" means, with respect to any
Mortgage Loan for any Due Date, the amount of the reduction of the Monthly
Payment for such Due Date with respect to such Mortgage Loan as a result of any
proceeding under bankruptcy law or any similar proceeding (other than a
Deficient Valuation Amount); provided, however, that in the case of an amount
that is deferred, but not forgiven, such reduction shall not constitute a Debt
Service Reduction Amount.
"DEFAULTED MORTGAGE LOAN" means a Mortgage Loan that is at least
60 days delinquent in respect of any Monthly Payment (such delinquency to be
determined without giving effect to any grace period permitted by the related
Mortgage or Mortgage Note) or as to which the Master Servicer has made a
determination that such Mortgage Loan's becoming so delinquent is imminent.
13
"DEFAULT INTEREST" means, with respect to any Mortgage Loan
(including without limitation an REO Mortgage Loan), any amounts collected
thereon, other than Late Fees and Prepayment Premiums, that represent additional
interest in excess of interest on the principal balance of such Mortgage Loan
accrued at the related Mortgage Rate.
"DEFAULTING PARTY" has the meaning set forth in Section 9.1(b).
"DEFICIENT VALUATION" means, with respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the Mortgaged Property
relating to a Mortgage Loan in an amount less than the then-outstanding
indebtedness under such Mortgage Loan, which valuation results from a proceeding
initiated under the Bankruptcy Code, as amended from time to time, and that
reduces the amount the Mortgagor is required to pay under such Mortgage Loan.
"DEFICIENT VALUATION AMOUNT" means the amount by which the total
amount due with respect to a Mortgage Loan (excluding interest not yet accrued),
including the principal balance of a Mortgage Loan plus any accrued and unpaid
interest thereon and any other amounts recoverable from the Mortgagor with
respect thereto pursuant to the terms thereof, is reduced in connection with a
Deficient Valuation.
"DEFINITIVE CERTIFICATES" means Certificates of any Class issued
in definitive, fully registered, certificated form without interest coupons.
"DELETED MORTGAGE LOAN" means a Mortgage Loan which is
repurchased from the Trust pursuant to the terms hereof or as to which one or
more Qualifying Substitute Mortgage Loans is or are substituted.
"DELINQUENT LOAN STATUS REPORT" means a report substantially
containing the content described in Exhibit H-2 attached hereto, setting forth,
among other things, those Mortgage Loans which, as of the close of business on
the Due Date immediately preceding the preparation of such report, were
delinquent 1 Collection Period, delinquent 2 Collection Periods, delinquent 3
Collection Periods or more, current but specially serviced, or were in
foreclosure but were not REO Property prepared in accordance with Section
8.14(j).
"DEPOSITOR" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., a Delaware
corporation, and its successors in interest.
"DEPOSITORY" has the meaning set forth in Section 3.6(a).
"DEPOSITORY AGREEMENT" means the Letter of Representations dated
April 21, 1999, by and among the Depositor, the Trustee and the Depository.
"DETERMINATION DATE" means, with respect to any Distribution
Date, the eleventh day of the month in which such Distribution Date occurs (or,
if such eleventh day is not a Business Day, the Business Day immediately
following such eleventh day).
"DIRECTLY OPERATE" means, with respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the Trust, in each case
other than through an Independent Contractor; provided, however, that the
Trustee (or the Special Servicer on behalf of the Trustee) shall not be
considered to Directly Operate an REO Property solely because the Trustee (or
the Special Servicer on
14
behalf of the Trustee) establishes rental terms, chooses tenants, enters into or
renews leases, deals with taxes and insurance, or makes decisions as to repairs,
tenant improvements or capital expenditures with respect to such REO Property or
undertakes any ministerial action incidental thereto.
"DISCOUNT RATE" has the meaning set forth in Section 6.4(c).
"DISQUALIFIED ORGANIZATION" means any of (i) the United States,
any State or any political subdivision thereof, or any agency or instrumentality
of any of the foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for FHLMC, a majority of
its board of directors is not selected by any such governmental unit), (ii) a
foreign government, international organization or any agency or instrumentality
of either of the foregoing, (iii) an organization (except certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from tax
imposed by Chapter 1 of the Code (unless such organization is subject to the tax
imposed by Section 511 of the Code on unrelated business taxable income), (iv)
rural electric and telephone cooperatives described in Section 1381 of the Code
and (v) any other Person so designated by the Trustee based upon an Opinion of
Counsel that the holding of an ownership interest in a Residual Certificate by
such Person may cause any of the REMIC Pools, or any Person having an Ownership
Interest in any Class of Certificates, other than such Person, to incur a
liability for any federal tax imposed under the Code that would not otherwise be
imposed but for the transfer of an Ownership Interest in a Residual Certificate
to such Person. The terms "United States," "State" and "international
organization" shall have the meanings set forth in Section 7701 of the Code or
successor provisions.
"DISTRIBUTABLE CERTIFICATE INTEREST" means, with respect to any
Class of REMIC III Regular Certificates for any Distribution Date, the Accrued
Certificate Interest in respect of such Class of Certificates for such
Distribution Date, reduced (to not less than zero) by that portion, if any, of
the Net Aggregate Prepayment Interest Shortfall, if any, for such Distribution
Date allocated to such Class of Certificates as set forth below, and increased
by any Class Interest Shortfall in respect of such Class of Certificates for
such Distribution Date. The Net Aggregate Prepayment Interest Shortfall, if any,
for each Distribution Date shall be allocated on such Distribution Date among
the respective Classes of REMIC III Regular Certificates, pro rata, in
accordance with the respective amounts of Accrued Certificate Interest for such
Classes of Certificates for such Distribution Date.
"DISTRIBUTION ACCOUNT" has the meaning set forth in Section 5.3.
"DISTRIBUTION DATE" means the 15th day of each month or, if any
such 15th day is not a Business Day, the next succeeding Business Day,
commencing in May, 1999; provided that the Distribution Date will be no earlier
than the fourth Business Day following the eleventh day of the month.
"DUE DATE" means: (i) with respect to any Mortgage Loan (other
than an REO Mortgage Loan) on or prior to its Maturity Date, the day of the
month set forth in the related Mortgage Note on which each Monthly Payment
thereon is scheduled to be first due; (ii) with respect to any Balloon Mortgage
Loan (other than an REO Mortgage Loan) after the Maturity Date therefor, the day
of the month set forth in the related Mortgage Note on which each Monthly
Payment (other than, to the extent different, the Balloon Payment) on such
Mortgage Loan had been scheduled to be first due; and (iii) with respect to any
REO Mortgage Loan, the day of the month set forth in the related Mortgage Note
15
on which each Monthly Payment on such Mortgage Loan prior to its becoming an REO
Mortgage Loan had been scheduled to be first due.
"ELIGIBLE ACCOUNT" means an account (or accounts) that is any of
the following: (i) maintained with a depository institution or trust company
whose (A) commercial paper, short-term unsecured debt obligations or other
short-term deposits are rated by any two of the Rating Agencies at least A-1 in
the case of S&P, and "F-1+" in the case of Fitch, if the deposits are to be held
in the account for 30 days or less, or (B) long-term unsecured debt obligations
are rated by any two of the Rating Agencies at least AA- in the case of S&P and
AA in the case of Fitch, if the deposits are to be held in the account more than
30 days or (ii) a segregated trust account or accounts maintained in the trust
department of the Trustee or other financial institution subject to regulations
regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal
Regulations Section 9.10(b), or (iii) an account or accounts of a depository
institution acceptable to each Rating Agency, as evidenced by Rating Agency
Confirmation with respect to the use of any such account as the Collection
Account or the Distribution Account.
"ELIGIBLE INVESTMENTS" means any one or more of the following
obligations or securities:
(i) direct obligations of, and obligations fully
guaranteed as to timely payment of principal and interest by, the United
States of America, FNMA, FHLMC or any agency or instrumentality of the
United States of America the obligations of which are backed by the full
faith and credit of the United States of America; provided that any
obligation of, or guarantee by, FNMA or FHLMC, other than an unsecured
senior debt obligation of FNMA or FHLMC, shall be an Eligible Investment
only if Rating Agency Confirmation is obtained with respect to such
investment;
(ii) demand, time or similar deposits in, certificates of
deposit of, money market deposit accounts of, or bankers' acceptances
issued by, any depository institution or trust company (including the
Trustee, the Master Servicer, the Special Servicer or any Affiliate of
the Master Servicer, the Special Servicer or the Trustee, acting in its
commercial capacity) incorporated or organized under the laws of the
United States of America or any State thereof and subject to supervision
and examination by federal or state banking authorities, so long as the
commercial paper or other short-term debt obligations of such depository
institution or trust company are rated "F-1+" by Fitch and "A-1+" by S&P
or the long-term unsecured debt obligations of such depository
institution or trust company have been assigned a rating by each Rating
Agency at least equal "AAA" or its equivalent or, alternatively, so long
as the ratings on such obligations are otherwise acceptable to the
Rating Agencies;
(iii) repurchase agreements or obligations with respect to
any security described in clause (i) above where such security has a
remaining maturity of one year or less and where such repurchase
obligation has been entered into with a depository institution or trust
company (acting as principal) described in clause (ii) above and where
such repurchase obligation will mature prior to the Business Day
preceding the next date upon which, as described in this Agreement, such
amounts are required to be withdrawn from the Collection Account and
which meets the minimum rating requirement for such entity described
above;
(iv) securities (other than stripped bonds or stripped
coupons) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America
or any state thereof, which securities are rated "AAA" or its equivalent
by
16
each Rating Agency, unless otherwise specified in writing by the
Rating Agency; provided that securities issued by any particular
corporation will not be Eligible Investments to the extent that
investment therein will cause the then-outstanding principal amount of
securities issued by such corporation and held in the Collection Account
to exceed 5% of the sum of the aggregate Certificate Principal Balance
of the Principal Balance Certificates and the aggregate principal amount
of all Eligible Investments in the Collection Account;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than one year after the date of issuance
thereof) rated "F-1+" by Fitch and "A-1+" by S&P;
(vi) Reserved;
(vii) guaranteed reinvestment agreements maturing within
365 days or less issued by any bank, insurance company or other
corporation whose long-term unsecured debt rating is not less than "AAA"
(or its equivalent rating) by Fitch and "AAA" by S&P (if rated by Fitch
or, if not rated by Fitch, by S&P and another nationally recognized
statistical rating organization);
(viii) any money market funds that maintain a constant
asset value and that are rated "AAAm" or "AAAm-G" (or its equivalent
rating) by S&P and Fitch, and any other demand, money-market or time
deposit, or any other obligation, security or investment, with respect
to which Rating Agency Confirmation has been obtained; and
(ix) such other investments bearing interest or sold at a
discount, earning a return "in the nature of interest" within the
meaning of Treasury Regulation Section 1.860G-2(g)(i) (as evidenced by
an Opinion of Counsel delivered to the Trustee by the Master Servicer at
the Master Servicer's expense), as are acceptable to the Rating Agencies
(as evidenced by Rating Agency Confirmation) and treated as "permitted
investments" that are "cash flow investments" under Code Section
860G(a)(5);
provided (A) such investment is held for a temporary period pursuant to Section
1.860G-2(g)(i) of the Treasury Regulations, (B) such investment is payable by
the obligor in U.S. dollars, and (C) that no such instrument shall be an
Eligible Investment (1) if such instrument evidences either (a) a right to
receive only interest payments or only principal payments with respect to the
obligations underlying such instrument or (b) a right to receive both principal
and interest payments derived from obligations underlying such instrument and
the principal and interest payments with respect to such instrument provide a
yield to maturity of greater than 120% of the yield to maturity at par of such
underlying obligations, or (2) if it may be redeemed at a price below the
purchase price or (3) if it is not treated as a "permitted investment" that is a
"cash flow investment" under Code Section 860G(a)(5); and provided, further,
that any such instrument shall have a maturity date no later than the date such
instrument is required to be used to satisfy the obligations under this
Agreement, and, in any event, shall not have a maturity in excess of one year;
any such instrument must have a predetermined fixed dollar of principal due at
maturity that cannot vary or change; if rated, the obligation must not have an
"r" highlighter affixed to its rating; interest on any variable rate instrument
shall be tied to a single interest rate index plus a single fixed spread (if
any) and move proportionally with that index; and provided, further, that no
amount beneficially owned by any REMIC Pool (including any amounts collected by
the Master Servicer but not yet deposited in the Collection Account) may be
invested in investments treated as equity interests for Federal income tax
purposes. No Eligible Investments shall be purchased at a price in excess of
par. For the purpose of this definition, (x) units of investment funds
(including money market
17
funds) shall be deemed to mature daily, and (y) the "Minimum Maturity-Based
Rating" means, in all cases, "AAA".
"EMERGENCY ADVANCE" means any Servicing Advance that must be made
within five Business Days by the Special Servicer in order to avoid any material
penalty, any material harm to a Mortgaged Property or any other material adverse
consequence to the Trust.
"ENVIRONMENTAL ASSESSMENT" means a "Phase I Assessment" conducted
in accordance with ASTM Standard E 1527-93 or any successor thereto published by
ASTM.
"ENVIRONMENTAL LAWS" means any and all federal, state and local
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions, now or hereafter in effect, relating to the
environment or to emissions, discharges or releases of chemical substances,
including, without limitation, any and all pollutants, contaminants, petroleum
or petroleum products, asbestos or asbestos-containing materials,
polychlorinated biphenyls, urea-formaldehyde insulation, radon, industrial,
toxic or hazardous substances or wastes, into the environment, including,
without limitation, ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use, labeling,
registration, treatment, storage, disposal, transport or handling of any of the
foregoing substances or wastes or the clean-up or other remediation thereof.
"EQUIVALENT 30/360 RATE" means with respect to a Mortgage Loan on
which interest is computed on a basis other than a 360-day year consisting of
twelve 30-day months, the per annum rate at which interest would have to accrue
on the Stated Principal Balance of such Mortgage Loan outstanding immediately
prior to such Distribution Date, assuming such accrual of interest were to occur
on the basis of a 360-day year consisting of twelve 30-day months, in order to
produce the actual Uncertificated Accrued Interest in respect of the REMIC I
Regular Interest corresponding to such Mortgage Loan in respect of such
Distribution Date.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ESCROW PAYMENT" means any payment received by the Master
Servicer or the Special Servicer for the account of any Mortgagor for
application toward the payment of real estate taxes, assessments, insurance
premiums, ground rents (if applicable) and similar items in respect of the
related Mortgaged Property.
"EVENT OF DEFAULT" means one or more of the events described in
Section 9.1(a).
"EXCESS INTEREST" means, with respect to any Anticipated
Repayment Date Loan and any Distribution Date following its Anticipated
Repayment Date, the excess of the amount of interest accrued on the outstanding
principal balance of such Mortgage Loan during the related Collection Period at
the Mortgage Rate in effect for such Mortgage Loan after the Anticipated
Repayment Date (the "REVISED INTEREST RATE") over the amount of interest that
would have accrued on the outstanding principal balance of such Mortgage Loan
during such Collection Period at the Mortgage Rate in effect for such Mortgage
Loan immediately prior to its Anticipated Repayment Date, and interest on such
excess amount at the Revised Interest Rate from the date accrued to the date
such amount is paid by the related Mortgagor.
"EXCESS INTEREST DISTRIBUTION ACCOUNT" has the meaning set forth
in Section 5.3.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
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"EXPENSE LOSS" means a loss realized upon payment by the Trust of
an Additional Trust Expense that was not otherwise subject to a Servicing
Advance or was the subject of a determination that such Servicing Advance, if
made, would be nonrecoverable.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"FHLMC" means the Federal Home Loan Mortgage Corporation, or any
successor thereto.
"FINAL CERTIFICATION" has the meaning set forth in Section 2.2.
"FINAL PURCHASER" has the meaning set forth in Section 10.1.
"FINAL RECOVERY DETERMINATION" means a determination by the
Special Servicer with respect to any defaulted Mortgage Loan or REO Property
that, in the reasonable and good faith judgment of the Special Servicer, there
has been a recovery of all Insurance Proceeds, Condemnation Proceeds,
Liquidation Proceeds, and other payments or recoveries that, in the Special
Servicer's reasonable and good faith judgment, exercised without regard to any
obligation of the Master Servicer or the Special Servicer to make payments from
its own funds pursuant to Section 8.5, will ultimately be recoverable.
"FINOVA" means FINOVA Realty Capital, Inc., or any successor in
interest.
"FINOVA LOANS" means, collectively, those Mortgage Loans sold to
the Depositor pursuant to Mortgage Loan Purchase Agreement I.
"FITCH" means Fitch IBCA, Inc., or its successors or assigns.
"FNMA" means the Federal National Mortgage Association, or any
successor thereto.
"GLOBAL CERTIFICATE" has the meaning set forth in Section 3.6.
"HAZARDOUS MATERIALS" means any dangerous, toxic or hazardous
pollutants, chemicals, wastes, or substances, including, without limitation,
those so identified pursuant to CERCLA or any other federal, state or local
environmental related laws and regulations, and including, without limitation,
asbestos and asbestos-containing materials, polychlorinated biphenyls ("PCBS"),
radon gas, petroleum and petroleum products, urea formaldehyde and any
substances classified as being "in inventory", "usable work in process" or
similar classification that would, if classified as unusable, be included in the
foregoing definition.
"HISTORICAL LOAN MODIFICATION REPORT" means a report
substantially containing the content described in Exhibit H-3 attached hereto,
setting forth, among other things, those Mortgage Loans which, as of the close
of business on the Due Date immediately preceding the preparation of such
report, have been modified pursuant to this Agreement (i) during the related
Collection Period and (ii) since the Cut-off Date showing the original and the
revised terms thereof prepared in accordance with Section 8.14(j).
"HISTORICAL LOSS ESTIMATE REPORT" means a report substantially
containing the content described in Exhibit H-4 attached hereto, setting forth,
among other things, as of the close of business on the Due Date immediately
preceding the preparation of such report, (i) the aggregate amount of
Liquidation Proceeds and Liquidation Expenses, both for the current period and
historically, and (ii) the
19
amount of Realized Losses occurring during the related Collection Period and
historically, set forth on a Mortgage Loan-by-Mortgage Loan basis prepared in
accordance with Section 8.14(j).
"HOLDER" means the Person in whose name a Certificate is
registered on the Certificate Register except that, solely for the purposes of
giving any consent, approval or waiver pursuant to this Agreement, any
Certificate registered in the name of the Master Servicer, the Special Servicer,
the Depositor or any Affiliate of any of them shall be deemed not to be
outstanding, and the Voting Rights to which it is entitled shall not be taken
into account in determining whether the requisite percentage of Voting Rights
necessary to effect any such consent, approval or waiver has been obtained,
except as otherwise provided in Sections 8.32, 9.4 and 13.3. The Trustee shall
be entitled to request and rely upon a certificate of the Master Servicer, the
Special Servicer or the Depositor in determining whether a Certificate is
registered in the name of an Affiliate of such Person. All references herein to
"Holders" or "Certificateholders" shall reflect the rights of Certificate Owners
as they may indirectly exercise such rights through the Clearing Agency and its
Participants, except as otherwise specified herein; provided, however, that the
parties hereto shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.
"INDEPENDENT" means, when used with respect to any Accountants, a
Person who is "independent" within the meaning of Rule 2-01(b) of the Securities
and Exchange Commission's Regulation S-X. Independent means, when used with
respect to any other Person, a Person who (a) is in fact independent of another
specified Person and any Affiliate of such other Person, (b) does not have any
material direct financial interest in such other Person or any Affiliate of such
other Person and (c) is not connected with such other Person or any Affiliate of
such other Person as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.
"INDEPENDENT CONTRACTOR" means any Person that would be an
"independent contractor" with respect to REMIC I within the meaning of Section
856(d)(3) of the Code if REMIC I were a real estate investment trust (except
that the ownership test set forth in that section shall be considered to be met
by any Person that owns, directly or indirectly, 35 percent or more of any Class
of Certificates, or such other interest in any Class of Certificates as is set
forth in an Opinion of Counsel, which shall be at no expense to the Trustee or
the Trust, delivered to the Trustee), so long as REMIC I does not receive or
derive any income from such Person and provided that the relationship between
such Person and REMIC I is at arm's length, all within the meaning of Treasury
Regulation Section 1.856-4(b)(5), or any other Person upon receipt by the
Trustee of an Opinion of Counsel, which shall be at no expense to the Trustee or
the Trust, to the effect that the taking of any action in respect of any REO
Property by such Person, subject to any conditions therein specified, that is
herein contemplated to be taken by an Independent Contractor will neither cause
such REO Property to cease to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for Section 860D(a) of the Code) nor cause any income
realized in respect of such REO Property to fail to qualify as Rents from Real
Property.
"INITIAL CERTIFICATION" has the meaning set forth in Section 2.2.
"INDIRECT PARTICIPANTS" means entities, such as banks, brokers,
dealers and trust companies, that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly.
"INITIAL POOL BALANCE" means the aggregate Cut-off Date Principal
Balance of the Mortgage Pool.
20
"INSTITUTIONAL ACCREDITED INVESTOR" means an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D of the Securities Act.
"INSURANCE POLICY" means any hazard insurance policy, flood
insurance policy or title insurance policy relating to any Mortgage Loan or
Mortgaged Property or REO Property in effect as of the Closing Date or
thereafter during the term of this Agreement.
"INSURANCE PROCEEDS" means amounts paid by the insurer under any
Insurance Policy.
"INTEREST ACCRUAL PERIOD" means with respect to any REMIC I
Regular Interest, any REMIC II Regular Interest or any Class of REMIC III
Regular Certificates for any Distribution Date, the calendar month immediately
preceding the month in which such Distribution Date occurs.
"INTEREST RESERVE ACCOUNT" has the meaning set forth in Section
5.3.2.
"INTEREST RESERVE LOANS" means the Mortgage Loans set forth on
Schedule III attached hereto.
"INTEREST ONLY CERTIFICATES" means the Class X Certificates.
"INTERESTED PERSON" means, as of any date of determination, the
Master Servicer, the Special Servicer, the Depositor, the Operating Adviser, any
Certificateholder, any Certificate Owner or any Person known to a Responsible
Officer of the Trustee to be an Affiliate of any of them.
"ISSUE PRICE" means, with respect to each Class of Regular
Certificates, REMIC I Regular Interests and REMIC II Regular Interests, the
"issue price" as defined in the REMIC Provisions.
"LATE COLLECTIONS" means with respect to any Mortgage Loan
(including without limitation any REO Mortgage Loan), all amounts received
thereon during any Collection Period, whether as payments, Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds, Repurchase Proceeds, payments of
Substitution Shortfall Amounts, or otherwise, which represent late payments or
collections of the principal and/or interest due or deemed due in respect of
such Mortgage Loan (without regard to any acceleration of amounts due thereunder
by reason of default) on a Due Date in a previous Collection Period and not
previously recovered; provided that "Late Collections" shall in no event include
Penalty Charges.
"LATE FEE" shall mean a fee paid or payable, as the context may
require, by a Mortgagor as provided in the related Mortgage Note or Mortgage in
connection with a late payment made on the related Mortgage Loan by such
Mortgagor.
"LEGENDED DEFINITIVE CERTIFICATE" means a Definitive Certificate
bearing the Securities Legend.
"LIQUIDATION EVENT" means with respect to any Mortgage Loan
(other than an REO Mortgage Loan), any of the following events: (i) such
Mortgage Loan is paid in full; (ii) a Final Recovery Determination is made with
respect to such Mortgage Loan; (iii) such Mortgage Loan is repurchased or
replaced by a Seller pursuant to Section 7 of the related Mortgage Loan Purchase
Agreement; (iv) such Mortgage Loan is purchased by the Majority
Certificateholder of the Controlling Class, the Master Servicer or the Special
Servicer, or is otherwise sold, pursuant to Section 8.31 or otherwise liquidated
by judicial action; or (v) such Mortgage Loan is purchased by any Person
entitled to
21
effect an optional termination of the Trust pursuant to Section 10.1. With
respect to any REO Property (and the related REO Mortgage Loan), any of the
following events: (i) a Final Recovery Determination is made with respect
to such REO Property; (ii) such REO Property is sold pursuant to Section 8.31;
or (iii) such REO Property is purchased by any Person entitled to effect an
optional termination of the Trust pursuant to Section 10.1.
"LIQUIDATION EXPENSES" means all customary, reasonable and
necessary "out of pocket" costs and expenses incurred on behalf of the Trust by
the Special Servicer in connection with the liquidation of any Specially
Serviced Mortgage Loan or REO Property pursuant to Section 8.7 or 8.31
(including, without limitation, legal fees and expenses, title and escrow
expenses, committee or referee fees and, if applicable, brokerage commissions
and conveyance taxes) that were not covered by a Servicing Advance.
"LIQUIDATION FEE" means, with respect to each Specially Serviced
Mortgage Loan or REO Property as to which Liquidation Proceeds have been
received (other than any Specially Serviced Mortgage Loan or REO Property
purchased by any Person entitled to effect an optional termination of the Trust
pursuant to Section 10.1), a fee in an amount equal to the product of (x) 1.0%,
and (y) the related Liquidation Proceeds.
"LIQUIDATION PROCEEDS" means proceeds (other than payments by a
Mortgagor, Insurance Proceeds, Condemnation Proceeds, Repurchase Proceeds,
payments of Substitution Shortfall Amounts and REO Income) from the sale or
liquidation of a Mortgage Loan or related
REO Property, net of related Liquidation Expenses.
"LOAN-TO-VALUE RATIO" means, with respect to any Mortgage Loan,
as of any date of determination, the fraction, expressed as a percentage, the
numerator of which is the then-unpaid principal balance of such Mortgage Loan
(or, if part of a group of Cross-Collateralized Mortgage Loans, of such group),
and the denominator of which is the appraised value of the related Mortgaged
Property (or, in the case of a group of Cross-Collateralized Mortgage Loans, of
all the Mortgaged Properties securing such group) as determined by an Appraisal
thereof.
"LOCK-BOX ACCOUNT" means with respect to any Mortgage Loan, any
lock-box, cash management or similar account required under the terms of the
related Mortgage or Mortgage Note.
"LOCK-BOX AGREEMENT" means, with respect to any Mortgage Loan,
any lock-box agreement relating to such Mortgage Loan executed and delivered by
the related Mortgagor pursuant to which a Lock-Box Account is created.
"LOSSES" has the meaning set forth in Section 12.3.
"LOSS REIMBURSEMENT AMOUNT" means, with respect to any REMIC I
Regular Interest, REMIC II Regular Interest or Class of Principal Balance
Certificates for any Distribution Date (except the initial Distribution Date,
with respect to which the Loss Reimbursement Amount for such REMIC I Regular
Interest, REMIC II Regular Interest or Class of Certificates, as the case may
be, will be zero), an amount equal to (a)(i) the Loss Reimbursement Amount with
respect to such REMIC I Regular Interest, REMIC II Regular Interest or Class of
Certificates, as the case may be, for the immediately preceding Distribution
Date, minus (ii) the aggregate of all reimbursements of previously allocated and
unreimbursed Realized Losses and Expense Losses (with interest) made on the
immediately preceding Distribution Date pursuant to Section 6.2, 6.3 or 6.4, as
applicable, with respect to such REMIC I Regular Interest, REMIC II Regular
Interest or Class of Certificates, as the case may be, plus (iii) the
22
aggregate of all Realized Losses and Expense Losses allocated to such REMIC I
Regular Interest, REMIC II Regular Interest or Class of Certificates, as the
case may be, on the immediately preceding Distribution Date pursuant to Section
6.5, plus (b) one month's interest (calculated on the basis of a 360-day year
consisting of twelve 30-day months) on the amount described in clause (a) at the
REMIC I Remittance Rate, REMIC II Remittance Rate or Pass-Through Rate, as
applicable, in respect of such REMIC I Regular Interest, REMIC II Regular
Interest or Class of Certificates, as the case may be, for the current
Distribution Date.
"MAI" means member of the appraisal institute.
"MAJORITY CERTIFICATEHOLDER" means, with respect to any
particular Class or Classes of Certificates, any Certificateholder entitled to a
majority of the Voting Rights allocated to such Class or Classes, as the case
may be.
"MASTER SERVICER" means AMRESCO Services, L.P. or any successor
master servicer appointed as provided herein.
"MASTER SERVICER REMITTANCE DATE" means, with respect to each
Distribution Date, the Business Day immediately preceding such Distribution
Date.
"MASTER SERVICER REMITTANCE REPORT" means a report prepared by
the Master Servicer and in such media as may be agreed upon by the Master
Servicer and the Trustee containing such information regarding the Mortgage
Loans as will permit the Trustee to calculate the amounts to be distributed to
the Certificateholders pursuant to this Agreement and to furnish the Monthly
Certificateholder Report to Certificateholders required to be delivered
hereunder and containing such additional information as the Master Servicer, the
Trustee and the Depositor may from time to time mutually agree.
"MASTER SERVICING FEE" means, with respect to each Mortgage Loan
(including without limitation each REO Mortgage Loan), the fee designated as
such and payable to the Master Servicer pursuant to Section 8.10(a).
"MASTER SERVICING FEE RATE" means, with respect to each Mortgage
Loan (including without limitation each REO Mortgage Loan), 0.125% per annum.
"MATERIAL DEFECT" has the meaning set forth in Section 2.3(a).
"MATURITY DATE" means, with respect to any Mortgage Loan as of
any date of determination, the date on which the last payment of principal is
due and payable under the related Mortgage Note, after taking into account all
Principal Prepayments received and any Deficient Valuation, Debt Service
Reduction Amount or modification of the Mortgage Loan occurring prior to such
date of determination, but without giving effect to (i) any acceleration of the
principal of such Mortgage Loan by reason of a default or (ii) any grace period
permitted by the related Mortgage Note.
"MEMORANDUM" means the private placement memorandum dated April
7, 1999, relating to the Privately Offered Certificates.
"MINIMUM MATURITY-BASED RATING" has the meaning provided under
the definition of "Eligible Investments" herein.
23
"MONEY TERM" means with respect to any Mortgage Loan, the
Maturity Date, Mortgage Rate, principal balance, amortization term or payment
frequency thereof (and shall not include Late Fees or Default Interest
provisions).
"MONTHLY CERTIFICATEHOLDER REPORT" means a report prepared
pursuant to Section 5.4 by the Trustee as to each Distribution Date generally in
the form and substance of Exhibit G, which sets forth, to the extent applicable;
(i) the amount, if any, of the distributions on such Distribution Date to the
Holders of each Class of Principal Balance Certificates applied to (A) reduce
the respective Class Principal Balance thereof and (B) reimburse previously
allocated Realized Losses and/or Expense Losses (with interest); (ii) the
amount, if any, of the distributions to Holders of each Class of REMIC III
Regular Certificates allocable to (A) Distributable Certificate Interest and (B)
Prepayment Premiums; (iii) the number and aggregate Stated Principal Balance of
Mortgage Loans in the Mortgage Pool at the close of business on the related
Determination Date; (iv) the number and aggregate Stated Principal Balance of
Mortgage Loans in the Mortgage Pool that are at the close of business on the
related Determination Date (A) delinquent 30 to 59 days, (B) delinquent 60 to 89
days, (C) delinquent 90 or more days or (D) as to which foreclosure proceedings
have been commenced; (v) with respect to any REO Property acquired during the
related Collection Period, the Stated Principal Balance of the related Mortgage
Loan as of the date of acquisition of the REO Property; (vi)(A) the latest
appraised value of any REO Property included in the Trust Fund as of the related
Determination Date, (B) as to any REO Property sold during the related
Collection Period, the date of the related Final Recovery Determination and the
amount of the proceeds of such sale deposited into the Collection Account, and
(C) the aggregate amount of other revenues collected by the Special Servicer
with respect to each REO Property during the related Collection Period and
credited to the Collection Account, in each case identifying such REO Property
by the loan number of the related Mortgage Loan; (vii) the Class Principal
Balance or Class X Notional Amount, as the case may be, and Certificate Factor
of each Class of REMIC III Regular Certificates before and after giving effect
to the distributions made on such Distribution Date; (viii) the aggregate amount
of Principal Prepayments made during the related Collection Period; (ix) the
Pass-Through Rate applicable to each Class of REMIC III Regular Certificates for
such Distribution Date; (x) the aggregate amount of servicing fees retained by
or paid to the Master Servicer and the Special Servicer; (xi) the Net Aggregate
Prepayment Interest Shortfall, if any, for such Distribution Date and the amount
of Realized Losses or Expense Losses, if any, incurred with respect to the
Mortgage Loans during the related Collection Period; (xii) the aggregate
outstanding amount of Servicing Advances and P&I Advances (stated separately) as
of the end of the prior calendar month that have been made by the Master
Servicer, the Special Servicer and the Trustee; and (xiii) the amount of any
Appraisal Reductions effected during the related Collection Period on a
loan-by-loan basis and the total Appraisal Reductions as of such Distribution
Date. In the case of information furnished pursuant to subclauses (i) and (ii)
above, the amounts shall be expressed as a dollar amount per $1,000 of original
actual or notional principal amount of the Certificates for all Certificates of
each applicable Class.
"MONTHLY PAYMENT" means, with respect to any Mortgage Loan, the
scheduled monthly payment of principal and/or interest on such Mortgage Loan,
including any Balloon Payment, which is payable by a Mortgagor from time to time
under the terms of the related Mortgage Note (as such may be modified at any
time following the Closing Date) and applicable law.
"MORTGAGE" means, with respect to any Mortgage Loan, separately
and collectively, as the context may require, each mortgage, deed of trust or
other instrument securing a Mortgage Note and creating a lien on the related
Mortgaged Property.
24
"MORTGAGE FILE" means, collectively with respect to any Mortgage
Loan, the mortgage documents listed below:
(i) the original Mortgage Note, endorsed by the most recent
endorsee prior to the Trustee or, if none, by the
originator, without recourse, either in blank or to the
order of the Trustee in the following form: "Pay to the
order of Norwest Bank Minnesota, National Association, as
trustee for the registered holders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1999-FNV1, without recourse", or in
the case of Mortgage Loan #73 and 150, an executed lost
note affidavit;
(ii) the original or a copy of the related recorded Mortgage
and, if applicable, the originals or copies of any
intervening assignments of such Mortgage showing a
complete chain of assignment from the originator of the
Mortgage Loan to the most recent assignee of record
thereof prior to the Trustee, if any, in each case with
evidence of recording indicated thereon;
(iii) an original assignment of the related Mortgage, in
recordable form, executed by the most recent assignee of
record thereof prior to the Trustee or, if none, by the
originator, either in blank or in favor of the Trustee (in
such capacity);
(iv) the original or a copy of the related recorded Assignment
of Leases (if such item is a document separate from the
related Mortgage) and, if applicable, the originals or
copies of any intervening assignments of such Assignment
of Leases showing a complete chain of assignment from the
originator of the Mortgage Loan to the most recent
assignee of record thereof prior to the Trustee, if any,
in each case with evidence of recording thereon;
(v) an original assignment of any related Assignment of Leases
(if such item is a document separate from the related
Mortgage), in recordable form, executed by the most recent
assignee of record thereof prior to the Trustee or, if
none, by the originator, either in blank or in favor of
the Trustee (in such capacity), which assignment may be
included as part of the corresponding assignment of
Mortgage referred to in clause (iii) above;
(vi) an original or copy of any related security agreement (if
such item is a document separate from the related
Mortgage) and, if applicable, the originals or copies of
any intervening assignments of such security agreement
showing a complete chain of assignment from the originator
of the Mortgage Loan to the most recent assignee thereof
prior to the Trustee, if any;
(vii) an original assignment of any related security agreement
(if such item is a document separate from the related
Mortgage) executed by the most recent assignee thereof
prior to the Trustee or, if none, by the originator,
either in blank or in favor of the Trustee (in such
capacity), which assignment may be included as part of an
omnibus assignment covering other documents relating to
the Mortgage Loan provided that such an omnibus assignment
would be effective under applicable law;
25
(viii) originals or copies of all assumption, modification,
consolidation, written assurance and substitution
agreements, with evidence of recording thereon (if
appropriate), in those instances where the terms or
provisions of the Mortgage, Mortgage Note or any related
security document have been modified or the Mortgage Loan
has been assumed;
(ix) the original or a copy of the lender's title insurance
policy issued in connection with the origination of the
Mortgage Loan, together with all endorsements or riders
(or copies thereof) that were issued with or subsequent to
the issuance of such policy, insuring the priority of the
Mortgage as a first lien on the Mortgaged Property;
(x) the original or a copy of any guaranty of the obligations
of the Mortgagor under the Mortgage Loan, together with
(A) if applicable, the originals or copies of any
intervening assignments of such guaranty showing a
complete chain of assignment from the originator of the
Mortgage Loan to the most recent assignee thereof prior to
the Trustee, if any, and (B) an original assignment of
such guaranty executed by the most recent assignee thereof
prior to the Trustee or, if none, by the originator either
in blank or in favor of the Trustee in such capacity
(which assignment may be included as part of an omnibus
assignment covering other documents relating to the
Mortgage Loan provided that such an omnibus assignment
would be effective under applicable law);
(xi) (A) a recorded acknowledgment copy of any UCC Financing
Statements and continuation statements which were filed in
order to perfect (and maintain the perfection of) any
security interest held by the originator of the Mortgage
Loan in and to the personalty of the Mortgagor at the
Mortgaged Property (in each case with evidence of filing
thereon) and which were in the possession of the related
Seller (or its agent) at the time the subject Mortgage
File was delivered to the Trustee, (B) recorded
acknowledgement copies of any intervening assignments of
the UCC Financing Statements referred to in clause (xi)(A)
and (C) if any such security interest remains perfected
and the earlier UCC Financing Statements and continuation
statements were in the possession of the Seller, a UCC
Financing Statement executed by the most recent assignee
of record prior to the Trustee or, if none, by the
originator, evidencing the transfer of such security
interest, either in blank or in favor of the Trustee;
(xii) the original or a copy of the power of attorney (with
evidence of recording thereon, if appropriate) granted by
the Mortgagor if the Mortgage, Mortgage Note or other
document or instrument referred to above was signed on
behalf of the Mortgagor;
(xiii) if the Mortgagor has a leasehold interest in the related
Mortgaged Property, the original ground lease or a copy
thereof;
(xiv) the original or a copy of the loan agreement, if
applicable;
(xv) the original or a copy of the lockbox agreement, if
applicable; and
26
(xvi) if applicable, an original letter of credit endorsed
without recourse, either in blank or to the order of the
Trustee in the following form: "Pay to the order of
Norwest Bank Minnesota, National Association, as trustee
for the registered holders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I
Inc., Commercial Mortgage Pass-Through Certificates,
Series 1999-FNV1, without recourse".
provided that whenever the term "Mortgage File" is used to refer to documents
actually received by the Trustee, such term shall not be deemed to include such
documents and instruments required to be included therein unless they are
actually so received.
"MORTGAGE LOAN" means a mortgage loan identified on the Mortgage
Loan Schedule, as amended from time to time, and conveyed, transferred, sold,
assigned to and deposited with the Trustee pursuant to Section 2.1 or Section
2.3. As used herein, the term "Mortgage Loan" includes the related Mortgage
Note, Mortgage and other security documents contained in the related Mortgage
File.
"MORTGAGE LOAN PURCHASE AGREEMENT" means either Mortgage Loan
Purchase Agreement I or Mortgage Loan Purchase Agreement II.
"MORTGAGE LOAN PURCHASE AGREEMENT I" means that certain Mortgage
Loan Purchase Agreement dated April 7, 1999, between FINOVA and the Depositor,
with respect to the FINOVA Loans.
"MORTGAGE LOAN PURCHASE AGREEMENT II" means that certain Mortgage
Loan Purchase Agreement dated April 7, 1999, between the Owner Trust, the
Depositor and FINOVA, with respect to the Owner Trust Loans.
"MORTGAGE LOAN SCHEDULE" or "LOAN SCHEDULE" means, collectively,
the schedules attached hereto as Schedule I, which identifies each FINOVA Loan
and Schedule II, which identifies each Owner Trust Loan, as such schedules may
be amended from time to time pursuant to Section 2.3.
"MORTGAGE NOTE" means the note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Mortgage Loan, together with
any rider, addendum or amendment thereto.
"MORTGAGE POOL" means, collectively, the Mortgage Loans
(including without limitation REO Mortgage Loans and Replacement Mortgage Loans,
but excluding Deleted Mortgage Loans).
"MORTGAGE RATE" means, with respect to any Mortgage Loan
(including without limitation an REO Mortgage Loan), the fixed annualized rate
at which interest is scheduled (in the absence of default) to accrue on such
Mortgage Loan from time to time (in accordance with the terms of the related
Mortgage Note (as such may be modified at any time following the Closing Date)
and applicable law), and without regard to any passage of the Maturity Date or
any acquisition of the related Mortgaged Property as an REO Property, provided
that in the case of a Non-30/360 Mortgage Loan, the Mortgage Rate shall be
determined in accordance with this sentence assuming that interest is scheduled
(in the absence of default) to accrue on such Mortgage Loan at the Equivalent
30/360 Rate, and provided further that with respect to each Interest Reserve
Loan, (i) the Mortgage Rate for the one-month period preceding the Due Dates in
both January and February in any year that is not a leap year and in February in
any year that is a leap year, shall be determined net of any Withheld Amounts
and (ii) the Mortgage Rate for the one-month period preceding the Due Date in
March shall be determined taking into account the addition of the Withheld
Amounts. The "Mortgage Rate" for purposes of calculating the REMIC II
27
Remittance Rate shall be the Mortgage Rate of such Mortgage Loan without taking
into account any reduction in the interest rate by a bankruptcy court pursuant
to a plan of reorganization or pursuant to any of its equitable powers or a
reduction in interest or principal due to a modification of such Mortgage Loan.
"MORTGAGED PROPERTY" means, individually and collectively, as the
context may require, the real property interest or interests subject to the lien
of a Mortgage and constituting collateral for a Mortgage Loan. With respect to
any Cross-Collateralized Mortgage Loan, as the context may require, "Mortgaged
Property" may mean, collectively, all the Mortgaged Properties securing such
Cross-Collateralized Mortgage Loan.
"MORTGAGEE" means, which respect to any Mortgage as of any date
of determination, the holder of the related Mortgage Note as of such date.
"MORTGAGOR" means the obligor or obligors on a Mortgage Note.
"NET AGGREGATE PREPAYMENT INTEREST SHORTFALL" means, with respect
to any Distribution Date, the amount, if any, by which (a) the aggregate of all
Prepayment Interest Shortfalls incurred in connection with the receipt of
Principal Prepayments on the Mortgage Loans during the related Collection
Period, exceeds (b) the sum of (i) the aggregate of all Prepayment Interest
Excesses realized in connection with the receipt of Principal Prepayments on the
Mortgage Loans during the related Collection Period, and (ii) the aggregate
amount deposited by the Master Servicer in the Distribution Account for such
Distribution Date pursuant to Section 8.21(b) in connection with such Prepayment
Interest Shortfalls.
"NET MORTGAGE RATE" means, with respect to any Mortgage Loan
(including without limitation an REO Mortgage Loan), as of any date of
determination, a rate per annum equal to the related Mortgage Rate then in
effect, minus the applicable Master Servicing Fee Rate and Trustee Fee Rate.
"NEW LEASE" means any lease of any REO Property entered into on
behalf of the Trust, including any lease renewed or extended on behalf of the
Trust if the Trust has the right to renegotiate the terms of such lease.
"NEW YORK PRESENTING OFFICE" means any office of an agent of the
Trustee or the Certificate Registrar, located in New York, New York, as the
Trustee or the Certificate Registrar, as the case may be, may designate from
time to time by written notice to the Depositor and the Certificateholders.
"NOI ADJUSTMENT WORKSHEET" means a report prepared by the Master
Servicer or the Special Servicer, as the case may be, substantially containing
the content described in Exhibit H-8 attached hereto, presenting the
computations made in accordance with the methodology described in such Exhibit
H-8 to "normalize" the full year net operating income and debt service coverage
numbers used in the other reports required by this Agreement, sent to the
Trustee with each annual operating statement for a Mortgaged Property pursuant
to Section 8.14(d).
"NON-30/360 MORTGAGE LOAN" means a Mortgage Loan that accrues
interest other than on the basis of a 360-day year consisting of twelve 30-day
months.
"NONDISQUALIFICATION OPINION" means a written opinion of
Independent nationally recognized outside tax counsel addressed to the Trustee,
reasonably acceptable in form and substance to
28
the Trustee, that a contemplated action will neither cause (i) any REMIC Pool to
fail to qualify as a REMIC at any time that any Certificates are outstanding nor
(ii) a gain on the disposition of a Qualified Mortgage which would be subject to
the 100% tax on "prohibited transactions," imposed by Section 860F of the Code,
nor (iii) any REMIC Pool to be subject to any tax under the REMIC Provisions,
except for any tax on net income from foreclosure property as provided for
herein.
"NONRECOVERABLE ADVANCE" means any Nonrecoverable P&I Advance or
Nonrecoverable Servicing Advance.
"NONRECOVERABLE P&I ADVANCE" means any P&I Advance previously
made or proposed to be made in respect of a Mortgage Loan (including, without
limitation, an REO Mortgage Loan) which, in the reasonable and good faith
judgment of the Master Servicer, or, if applicable, the Trustee, will not be
ultimately recoverable (together with Advance Interest thereon) from late
payments, Insurance Proceeds, Condemnation Proceeds or Liquidation Proceeds, or
any other recovery on or in respect of such Mortgage Loan.
"NONRECOVERABLE SERVICING ADVANCE" means any Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan or REO
Property which, in the reasonable and good faith judgment of the Master
Servicer, the Special Servicer or, if applicable, the Trustee, will not be
ultimately recoverable (together with Advance Interest thereon) from late
payments, Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds, or
any other recovery on or in respect of such Mortgage Loan or REO Property.
"OFFICER'S CERTIFICATE" means (x) in the case of the Depositor, a
certificate signed by one or more of the Chairman of the Board, any Vice
Chairman, the President, or any Senior Vice President, Vice President or
Assistant Vice President, and by one or more of the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Depositor, or (y) in
the case of the Master Servicer and the Special Servicer, a certificate signed
by any of the officers referred to above or an employee thereof designated as a
Servicing Officer or Special Servicing Officer pursuant to this Agreement, and
(z) in the case of the Trustee, a certificate signed by a Responsible Officer.
"OPERATING ADVISER" shall have the meaning specified in Section
8.32.
"OPERATING STATEMENT ANALYSIS" means, with respect to each
Mortgage Loan and REO Mortgage Property, a report substantially containing the
content described in Exhibit H-7 attached hereto, prepared in accordance with
Section 8.14(j).
"OPINION OF COUNSEL" means a written opinion of counsel addressed
to the Trustee, reasonably acceptable in form and substance to the Trustee, and
which may be from in-house or outside counsel to the party required to deliver
such opinion but which must be from Independent outside counsel with respect to
any such opinion of counsel concerning the taxation, or status as a REMIC for
tax purposes, of the Trust or any REMIC Pool.
"OTS" means the Office of Thrift Supervision or any successor
thereto.
"OWNERSHIP INTEREST" means, as to any Certificate, any ownership
or security interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial, as owner or
as pledgee.
29
"OWNER TRUST" means FINOVA Commercial Mortgage Loan Owner Trust
1998-1, a Delaware business trust.
"OWNER TRUST LOANS" means, collectively, those Mortgage Loans
sold to the Depositor pursuant to Mortgage Loan Purchase Agreement II and shown
on Schedule II hereto.
"P&I ADVANCE" means, as to any Mortgage Loan (including, without
limitation, any REO Mortgage Loan), any advance in respect of delinquent
principal and/or interest made by the Master Servicer pursuant to Section 4.1
(or any similar advance made by the Trustee pursuant to Section 4.3).
"P&I ADVANCE DATE" means, with respect to any Distribution Date,
the Business Day preceding such Distribution Date.
"PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom the Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency.
"PASS-THROUGH ENTITY" means any of (a) a regulated investment
company described in Section 851 of the Code, a real estate investment trust
described in Section 856 of the Code, a common trust fund or an organization
described in Section 1381(a) of the Code, (b) any partnership, trust or estate
as such terms are defined in the Code or (c) any Person holding a Residual
Certificate as nominee for another Person.
"PASS-THROUGH RATE" means with respect to,
(1) the Class A-1 Certificates, the Class A-2 Certificates,
the Class B Certificates, the Class C Certificates, the
Class D Certificates, the Class G Certificates, the Class
H Certificates, the Class J Certificates, the Class K
Certificates, the Class L Certificates, the Class M
Certificates, Class N Certificates and the Class O
Certificates, for any Distribution Date, the respective
fixed rates per annum specified as such in the Preliminary
Statement;
(2) the Class X Certificates, for any Distribution Date, the
Class X Certificate Rate;
(3) the Class E Certificates, for any Distribution Date, the
Class E Certificate Rate; and
(4) the Class F Certificates, for any Distribution Date, the
Class F Certificate Rate.
"PCB" has the meaning set forth in the definition of Hazardous
Materials.
"PENALTY CHARGES" means, with respect to any Mortgage Loan
(including without limitation an REO Mortgage Loan), any amounts collected
thereon that represent Late Fees or Default Interest.
"PERCENTAGE INTEREST" means, (i) with respect to any REMIC III
Regular Certificate, the portion of the relevant Class evidenced by such
Certificate, expressed as a percentage, the numerator of
30
which is the Certificate Principal Balance or the Certificate Notional Amount,
as the case may be, of such Certificate as of the Closing Date, as specified on
the face thereof, and the denominator of which is the initial Class Principal
Balance or the initial Class X Notional Amount, as the case may be, of the
relevant Class as of the Closing Date; and (ii) with respect to a Residual
Certificate, the percentage interest in distributions to be made with respect to
the relevant Class, as stated on the face of such Certificate.
"PERMITTED TRANSFEREE" means any Transferee other than a
Disqualified Organization.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PLAN" has the meaning set forth in Section 3.3(d).
"PREPAYMENT ASSUMPTION" means a CPR of 0%, applied to each
Mortgage Loan during any period that the related Mortgagor is permitted to make
voluntary Principal Prepayments without a Prepayment Premium (and with respect
to each Anticipated Repayment Date Loan, treating its Anticipated Repayment Date
as its Maturity Date), calculated on the basis of a yield maintenance formula
used for determining the accrual of original issue discount, market discount and
premium, if any, on the REMIC I Regular Interests, the REMIC II Regular
Interests or the REMIC III Regular Certificates for federal income tax purposes.
"PREPAYMENT INTEREST EXCESS" means, with respect to any Mortgage
Loan that was subject to a Principal Prepayment in full or in part during any
Collection Period, which Principal Prepayment was applied to such Mortgage Loan
following such Mortgage Loan's Due Date in such Collection Period, the amount of
interest at the related Net Mortgage Rate (except to the extent it constitutes
Excess Interest) accrued on the amount of such Principal Prepayment during the
period from and after such Due Date to but not including the date such Principal
Prepayment was applied to such Mortgage Loan, to the extent actually collected
from the related Mortgagor (without regard to any Prepayment Premium that may
have been collected).
"PREPAYMENT INTEREST SHORTFALL" means, with respect to any
Mortgage Loan that was subject to a Principal Prepayment in full or part during
any Collection Period, which Principal Prepayment was applied to such Mortgage
Loan prior to such Mortgage Loan's Due Date in such Collection Period, the
amount of interest that would have accrued at the related Net Mortgage Rate
(except to the extent it constitutes Excess Interest) on the amount of such
Principal Prepayment during the period commencing on the date as of which such
Principal Prepayment was applied to such Mortgage Loan and ending on the day
immediately preceding such Due Date, inclusive, to the extent not collected from
the related Mortgagor (without regard to any Prepayment Premium that may have
been collected).
"PREPAYMENT PREMIUM" means any premium, penalty or fee paid or
payable, as the context requires, by a Mortgagor in connection with a Principal
Prepayment on, or other early collection of principal of, a Mortgage Loan
(including, without limitation, an REO Mortgage Loan).
"PRINCIPAL BALANCE CERTIFICATES" means, collectively, the REMIC
III Regular Certificates other than the Class X Certificates.
"PRINCIPAL DISTRIBUTION AMOUNT" means, for any Distribution Date,
the aggregate of (i) the Current Principal Distribution Amount for such
Distribution Date, and (ii) if such Distribution Date is
31
subsequent to the initial Distribution Date, the excess, if any, of the
Principal Distribution Amount for the preceding Distribution Date, over the
aggregate distributions of principal made on the Principal Balance Certificates
in respect of such Principal Distribution Amount on the preceding Distribution
Date.
"PRINCIPAL PREPAYMENT" means any payment of principal made by the
Mortgagor on a Mortgage Loan that is received in advance of its scheduled Due
Date and that is not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent to the month
of prepayment.
"PRIVATELY OFFERED CERTIFICATES" means, unless and until
registered under the Securities Act, the Class X, Class F, Class G, Class H,
Class J, Class K, Class L, Class M, Class N, Class O and Residual Certificates.
"PROPOSED PLAN" has the meaning set forth in Section 8.20.
"PROSPECTIVE INVESTOR" means any prospective purchaser of a
Certificate or, in the case of a Book-Entry Certificate, of a beneficial
ownership interest therein.
"PROSPECTUS SUPPLEMENT" means the Prospectus Supplement dated
April 7, 1999 relating to the Publicly Offered Certificates.
"PUBLICLY OFFERED CERTIFICATES" means the Class A-1, Class A-2,
Class B, Class C, Class D and Class E Certificates.
"PURCHASE PRICE" means, with respect to any Mortgage Loan (other
than an REO Mortgage Loan), a price equal to the outstanding principal balance
of such Mortgage Loan as of the date of purchase, together with (a) all accrued
and unpaid interest on such Mortgage Loan at the related Mortgage Rate to but
not including the Due Date in the Collection Period of purchase, (b) all related
unreimbursed Servicing Advances, together with interest on all Advances
hereunder accrued to the date of purchase on Advances and (c) if such Mortgage
Loan is being repurchased or substituted for by a Seller pursuant to Section 7
of the related Mortgage Loan Purchase Agreement, all expenses reasonably
incurred or to be incurred by the Master Servicer, the Special Servicer, the
Depositor and the Trustee in respect of the Breach or Material Defect giving
rise to the repurchase or substitution obligation. With respect to any REO
Property, Purchase Price means the amount calculated in accordance with the
preceding sentence in respect of the related REO Mortgage Loan.
"QIB" means a "qualified institutional buyer" within the meaning
of Rule 144A under the Securities Act.
"QUALIFIED APPRAISER" means an Independent licensed
MAI-designated appraiser with at least five years experience in properties of
like kind and in the same area.
"QUALIFIED INSURER" means an insurance company or security or
bonding company duly qualified as such under the laws of the relevant
jurisdiction and duly authorized and licensed in such jurisdiction to transact
the applicable insurance business and to write the insurance provided.
"QUALIFIED MORTGAGE" means a Mortgage Loan that is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code (but without
regard to the rule in Treasury Regulation Section 1.860G-2(f)(2) that treats a
defective obligation as a qualified mortgage, or any substantially similar
successor provision) and applicable Treasury regulations promulgated pursuant
thereto.
32
"QUALIFYING SUBSTITUTE MORTGAGE LOAN" means a Mortgage Loan
substituted for a Deleted Mortgage Loan which, on the date of substitution, (i)
has a principal balance, after deduction of the principal portion of the Monthly
Payment due in the month of substitution, not in excess of the Stated Principal
Balance of the Deleted Mortgage Loan; (ii) is accruing interest at a rate of
interest at least equal to that of the Deleted Mortgage Loan; (iii) has a fixed
Mortgage Rate; (iv) is accruing interest on the same basis as the Deleted
Mortgage Loan (for example, on the basis of a 360-day year consisting of twelve
30-day months); (v) has a remaining term to stated maturity not greater than,
and not more than two years less than, that of the Deleted Mortgage Loan; (vi)
has an original Loan-to-Value Ratio not higher than that of the Deleted Mortgage
Loan and a current Loan-to-Value Ratio (equal to the principal balance on the
date of substitution divided by its current Appraised Value) not higher than the
then-current Loan-to-Value Ratio of the Deleted Mortgage Loan; (vii) will comply
with all of the representations and warranties relating to Mortgage Loans set
forth in the related Mortgage Loan Purchase Agreement, as of the date of
substitution; (viii) has an Environmental Assessment relating to the related
Mortgaged Property in its Servicing File; and (ix) as to which the Trustee has
received a written opinion of Independent outside tax counsel, reasonably
acceptable in form and substance to the Trustee, at the related Seller's
expense, that such Mortgage Loan is a "qualified replacement mortgage" within
the meaning of Section 860G(a)(4) of the Code; provided that no such Mortgage
Loan shall be substituted for a Deleted Mortgage Loan if it has a Maturity Date
after the date three years prior to the Rated Final Distribution Date, and
provided, further, that no such Mortgage Loan shall be substituted for a Deleted
Mortgage Loan unless Rating Agency Confirmation is obtained; and provided,
further that no such Mortgage Loan shall be substituted for a Deleted Mortgage
Loan if it would result in an Adverse REMIC Event in respect of any REMIC Pool;
and provided, further that no such Mortgage Loan shall be substituted for a
Deleted Mortgage Loan unless the Operating Adviser shall have approved of such
substitution based upon an engineering report and the Environmental Assessment
obtained with respect to such Mortgage Loan (provided, however, that such
approval of the Operating Adviser may not be unreasonably withheld, as
determined by the Special Servicer in accordance with the Servicing Standard).
In the event that either one mortgage loan is substituted for more than one
Deleted Mortgage Loan or more than one mortgage loan is substituted for one or
more Deleted Mortgage Loans, then (a) the principal balance referred to in
clause (i) above shall be determined on the basis of aggregate principal
balances and (b) the rates referred to in clauses (ii) and (iii) above and the
remaining term to stated maturity referred to in clause (v) above shall be
determined on a weighted average basis. Whenever a Qualifying Substitute
Mortgage Loan is substituted for a Deleted Mortgage Loan pursuant to this
Agreement, the party effecting such substitution shall certify that such
Mortgage Loan meets all of the requirements of this definition and shall send
such certification to the Trustee.
"RATED FINAL DISTRIBUTION DATE" means the Distribution Date in
March 2031.
"RATING AGENCIES" means Fitch and S&P.
"RATING AGENCY CONFIRMATION" means, with respect to any matter,
where required under this Agreement, confirmation in writing by each Rating
Agency that a proposed action, failure to act, or other event specified herein
will not in and of itself result in the withdrawal, downgrade, or qualification
(if applicable) of the then-current rating assigned by such Rating Agency to any
Class of Certificates then rated by such Rating Agency.
"REALIZED LOSS" means (x) with respect to each defaulted Mortgage
Loan as to which a Final Recovery Determination has been made, or with respect
to any REO Mortgage Loan as to which a Final Recovery Determination has been
made as to the related REO Property, an amount (not less than zero) equal to (i)
the unpaid principal balance of such Mortgage Loan (or, in the case of an REO
Property, the related REO Mortgage Loan) as of the commencement of the
Collection Period in which the Final Recovery Determination was made, plus (ii)
all accrued but unpaid interest (other than Excess Interest) on such Mortgage
Loan (or, in the case of an REO
33
Property, the related REO Mortgage Loan) at the related Mortgage Rate to but not
including the Due Date in the Collection Period in which the Final Recovery
Determination was made, in any event determined without taking into account the
amounts described in subclause (iv) of this sentence, plus (iii) any related
unreimbursed Servicing Advances as of the commencement of the Collection Period
in which the Final Recovery Determination was made, together with any new
related Servicing Advances made during such Collection Period and all unpaid
Advance Interest on all Advances, minus (iv) all payments and proceeds, if any,
received in respect of such Mortgage Loan or REO Property, as the case may be,
during the Collection Period in which such Final Recovery Determination was made
(net of any related Liquidation Expenses paid therefrom); (y) with respect to
any Mortgage Loan as to which any portion of the outstanding principal or
accrued interest owed thereunder was forgiven in connection with a bankruptcy or
similar proceeding involving the related Mortgagor or a modification, waiver or
amendment of such Mortgage Loan granted or agreed to by the Master Servicer or
Special Servicer pursuant to Section 8.18, the amount of such principal or
interest so forgiven; and (z) with respect to any Mortgage Loan as to which the
Mortgage Rate thereon has been permanently reduced for any period in connection
with a bankruptcy or similar proceeding involving the related Mortgagor or a
modification, waiver or amendment of such Mortgage Loan granted or agreed to by
the Master Servicer or Special Servicer pursuant to Section 8.18, the amount of
the consequent reduction in the interest portion of each successive Monthly
Payment due thereon. Each such Realized Loss shall be deemed to have been
incurred on the Due Date for each affected Monthly Payment. "RECORD DATE" means,
with respect to any Class of Certificates for any Distribution Date, the last
Business Day of the calendar month immediately preceding the month in which such
Distribution Date occurs.
"REGULATION D" has the meaning set forth in Section 3.3(g).
"REMIC" means a real estate mortgage investment conduit within
the meaning of Section 860D of the Code.
"REMIC I" means the segregated pool of assets included in the
Trust created hereby and to be administered hereunder, consisting of the
Mortgage Loans (excluding the right to Excess Interest in respect of the
Anticipated Repayment Date Loans), as from time-to-time are subject to this
Agreement, the Mortgage Files relating thereto, all proceeds of and payments
under such Mortgage Loans received after the Closing Date (other than Excess
Interest), such amounts as shall from time to time be held in the Collection
Account and the Distribution Account, the Insurance Policies and any REO
Properties acquired in respect of any Mortgage Loan, for which a REMIC election
is to be made pursuant to Section 12.1(a) hereof.
"REMIC I INTERESTS" means, collectively, the REMIC I Regular
Interests and the Class R-I Certificates.
"REMIC I REGULAR INTEREST" means, with respect to each Mortgage
Loan (including, without limitation, each REO Mortgage Loan), the separate
uncertificated interest in REMIC I issued to the Trustee in respect of such
Mortgage Loan hereunder and designated as a "regular interest" in REMIC I. Each
REMIC I Regular Interest shall be held by the Trustee as part of the assets of
REMIC II, and shall represent a right to receive interest at the related REMIC I
Remittance Rate and distributions of
34
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance (which shall equal the
Cut-off Date Principal Balance of the related Mortgage Loan). The designation
for each REMIC I Regular Interest shall be the loan number for the related
Mortgage Loan set forth in the Mortgage Loan Schedule as of the Closing Date. If
a Replacement Mortgage Loan or Loans are substituted for any Deleted Mortgage
Loan, the REMIC I Regular Interest that related to the Deleted Mortgage Loan
shall thereafter relate to such Replacement Mortgage Loan(s).
"REMIC I REMITTANCE RATE" means, with respect to any REMIC I
Regular Interest for any Distribution Date, a rate per annum equal to the Net
Mortgage Rate in effect for the related Mortgage Loan (including without
limitation an REO Mortgage Loan). If any Mortgage Loan included in the Trust
Fund as of the Closing Date is replaced by a Replacement Mortgage Loan or Loans,
the REMIC I Remittance Rate for the related REMIC I Regular Interest shall still
be calculated in accordance with the preceding sentence based on the Net
Mortgage Rate for the Deleted Mortgage Loan.
"REMIC II" means the segregated pool of assets consisting of the
REMIC I Regular Interests and all distributions thereon conveyed to the Trustee
for the benefit of REMIC III and for which a separate REMIC election is to be
made pursuant to Section 12.1(a) hereof.
"REMIC II DISTRIBUTION AMOUNT" has the meaning set forth in
Section 6.2(d).
"REMIC II INTERESTS" means, collectively, the REMIC II Regular
Interests and the Class R-II Certificates.
"REMIC II REGULAR INTEREST" means any of the fifteen separate
uncertificated beneficial interests in REMIC II issued to the Trustee hereunder
and designated as a "regular interest" in REMIC II. Each REMIC II Regular
Interest shall be held by the Trustee as part of the assets of REMIC III, and
shall represent a right to receive interest at the related REMIC II Remittance
Rate in effect from time to time and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto. The designations for the respective REMIC II
Regular Interests are set forth in the Preliminary Statement hereto.
"REMIC II REMITTANCE RATE" means, with respect to each of REMIC
II Regular Interests A, B, C, D, E, F, G, H, J, K, L, M, N and O for any
Distribution Date, the Weighted Average REMIC I Remittance Rate.
"REMIC III" means the segregated pool of assets consisting of the
REMIC II Regular Interests and for which a separate REMIC election is to be made
pursuant to Section 12.1(a) hereof.
"REMIC III CERTIFICATE" means any Certificate, other than a Class
R-I or Class R-II Certificate.
"REMIC III DISTRIBUTION AMOUNT" has the meaning set forth in
Section 6.3(c).
"REMIC III REGULAR CERTIFICATE" means any REMIC III Certificate,
other than a Class R-III Certificate, and where appropriate with respect to a
Class X Certificate, may refer to each of the Component Interests thereof, as
the case requires. References to REMIC III Regular Certificates will, with
respect to the Class O Certificate, be considered to refer to the Class O REMIC
Interest that is a "regular interest" in REMIC III, where appropriate.
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"REMIC POOL" means each of the three segregated pools of assets
designated as a REMIC pursuant to Section 12.1(a) hereof.
"REMIC PROVISIONS" means the provisions of the federal income tax
law relating to real estate mortgage investment conduits, which appear at
Sections 860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the foregoing
may be in effect from time to time and taking account, as appropriate, of any
proposed legislation which, as proposed, would have an effective date prior to
enactment thereof and any proposed regulations.
"RENTS FROM REAL PROPERTY" means, with respect to any REO
Property, income of the character described in Section 856(d) of the Code.
"REO ACCOUNT" has the meaning set forth in Section 8.19(b).
"REO ACQUISITION" means the acquisition of any REO Property
pursuant to Section 8.7.
"REO EXTENSION" has the meaning set forth in Section 8.19(a).
"REO INCOME" means, with respect to any REO Property for any
Collection Period, all income received in connection with such REO Property
during such period.
"REO MORTGAGE LOAN" means a Mortgage Loan as to which the related
Mortgaged Property is an REO Property.
"REO PROPERTY" means a Mortgaged Property acquired by the Trust
through foreclosure, deed-in-lieu of foreclosure, abandonment or reclamation
from bankruptcy in connection with a Defaulted Mortgage Loan or otherwise
treated as foreclosure property under the REMIC Provisions.
"REO SALE DEADLINE" has the meaning set forth in Section 8.19(a).
"REO STATUS REPORT" means a report substantially containing the
content described in Exhibit H-5 attached hereto, setting forth, among other
things, with respect to each REO Property that was included in the Trust Fund as
of the close of business on the Due Date immediately preceding the preparation
of such report, (i) the acquisition date of such REO Property, (ii) the amount
of income collected with respect to any REO Property net of related expenses and
other amounts, if any, received on such REO Property during the related
Collection Period and (iii) the value of the REO Property based on the most
recent appraisal or other valuation thereof available to the Special Servicer as
of such date of determination (including any prepared internally by the Special
Servicer) prepared in accordance with Section 8.14(j).
"REO TAX" has the meaning set forth in Section 8.20(a).
"REPLACEMENT MORTGAGE LOAN" means any Qualifying Substitute
Mortgage Loan that is substituted for one or more Deleted Mortgage Loans.
"REPORT DATE" means the second Business Day before the related
Distribution Date.
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"REPURCHASE PROCEEDS" means amounts paid by any Seller under the
related Mortgage Loan Purchase Agreement, in connection with the repurchase of
any Mortgage Loan as contemplated by Section 2.3.
"REQUEST FOR RELEASE" means a request for release of certain
documents relating to the Mortgage Loans, a form of which is attached hereto as
Exhibit C.
"REQUIRED APPRAISAL LOAN" means any Mortgage Loan (including
without limitation any REO Mortgage Loan) as to which an Appraisal Event has
occurred and is continuing.
"RESERVE ACCOUNT" means the account or accounts created and
maintained pursuant to Section 8.3(d).
"RESERVE FUNDS" means, with respect to any Mortgage Loan, any
cash amounts or instruments convertible into cash delivered by the related
Mortgagor to be held in escrow by or on behalf of the Mortgagee representing
reserves for repairs, replacements, capital improvements, environmental testing
and remediation and/or similar type items with respect to the related Mortgaged
Property.
"RESIDUAL CERTIFICATES" means, with respect to REMIC I, the Class
R-I Certificates, with respect to REMIC II, the Class R-II Certificates and,
with respect to REMIC III, the Class R-III Certificates.
"RESPONSIBLE OFFICER" means, when used with respect to the
initial Trustee, any Vice President, Assistant Vice President, corporate trust
officer or any assistant corporate trust officer.
"RETAINED INTEREST" has the meaning set forth in Section 2.1(a).
"REVISED INTEREST RATE" has the meaning set forth in the
definition of Excess Interest.
"RULE 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Services, a Division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES LEGEND" means the legend to be printed on the
Certificates as set forth in Section 3.3(c).
"SELLER" means FINOVA or the Owner Trust, as the case may be.
"SENIOR CERTIFICATES" means, collectively, the Class A and Class
X Certificates.
"SERVICING ACCOUNT" means the account or accounts created and
maintained pursuant to Section 8.3(a).
"SERVICING ADVANCES" means all customary, reasonable and
necessary "out of pocket" costs and expenses (including attorneys' fees and
expenses and fees of real estate brokers) incurred by the Master Servicer, the
Special Servicer or, if applicable, the Trustee in connection with the servicing
and administering of (a) a Mortgage Loan in respect of which a default,
delinquency or other
37
unanticipated event has occurred or as to which a default is imminent or (b) an
REO Property, including, but not limited to, the cost of (i) compliance with the
obligations of the Master Servicer and/or the Special Servicer set forth in
Section 8.3(c) and 8.7(c), (ii) the preservation, restoration and protection of
a Mortgaged Property or REO Property, (iii) obtaining any Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds in respect of any Mortgage Loan or
REO Property, (iv) any enforcement or proceedings with respect to a Mortgaged
Property, including without limitation foreclosures and similar proceedings, (v)
the operation, management, maintenance and liquidation of any REO Property, and
(vi) any other cost or expense designated as a Servicing Advance in accordance
with this Agreement; provided that, notwithstanding anything to the contrary,
"Servicing Advances" shall not include allocable overhead of the Master Servicer
or the Special Servicer, such as costs for office space, office equipment,
supplies and related expenses, employee salaries and related expenses and
similar internal costs and expenses, or costs incurred by either such party in
connection with its purchase of any Mortgage Loan or REO Property pursuant to
any provision of this Agreement. All Emergency Advances made by the Special
Servicer hereunder shall be considered "Servicing Advances" for the purposes
hereof.
"SERVICING FEES" means, with respect to each Mortgage Loan
(including without limitation each REO Mortgage Loan), the Master Servicing Fee
and, if applicable, the Special Servicing Fee.
"SERVICING FILE" means, collectively as to any Mortgage Loan, any
documents, other than documents required to be part of the related Mortgage
File, in the possession of the Master Servicer or Special Servicer and relating
to the origination and servicing of such Mortgage Loan, including without
limitation a closing binder for such Mortgage Loan and, in each case if and to
the extent available, any appraisal, environmental report, engineering report,
operating statements, rent rolls and copies of major leases.
"SERVICING OFFICER" means any officer or employee of the Master
Servicer involved in, or responsible for, the administration and servicing of
the Mortgage Loans whose name and specimen signature appear on a list of
servicing officers or employees furnished to the Trustee by the Master Servicer
and signed by an officer of the Master Servicer, as such list may from time to
time be amended.
"SERVICING STANDARD" has the meaning set forth in Section 8.1(a).
"SERVICING TRANSFER EVENT" means, with respect to any Mortgage
Loan, the occurrence of any of the events described in clauses (a) through (h)
of the definition of "Specially Serviced Mortgage Loan".
"SPECIAL SERVICER" means Banc One Mortgage Capital Markets, LLC
or any successor Special Servicer as herein provided.
"SPECIAL SERVICING FEE" means, with respect to each Specially
Serviced Mortgage Loan and REO Mortgage Loan, the fee designated as such and
payable to the Special Servicer pursuant to Section 8.10(b).
"SPECIAL SERVICING FEE RATE" means, with respect to each
Specially Serviced Mortgage Loan and REO Mortgage Loan, 0.25% per annum.
"SPECIAL SERVICING OFFICER" means any officer or employee of the
Special Servicer involved in, or responsible for, the administration and
servicing of the Specially Serviced Mortgage Loans whose name and specimen
signature appear on a list of servicing officers or employees furnished
38
to the Trustee and the Master Servicer by the Special Servicer signed by an
officer of the Special Servicer, as such list may from time to time be amended.
"SPECIALLY SERVICED MORTGAGE LOAN" means any Mortgage Loan as to
which any of the following events has occurred:
(a) the related Mortgagor has failed to make when due any Balloon
Payment, which failure has continued unremedied for 30 days; or
(b) the related Mortgagor has failed to make when due any Monthly
Payment (other than a Balloon Payment) or any other payment required under the
related Mortgage Note or the related Mortgage, which failure continues
unremedied for 60 days; or
(c) the Master Servicer has determined, in accordance with the
Servicing Standard, that a default in the making of a Monthly Payment or any
other payment required under the related Mortgage Note or the related Mortgage
is likely to occur within 30 days and is likely to remain unremedied for at
least 60 days or, in the case of a Balloon Payment, for at least 30 days; or
(d) there shall have occurred a default under the related loan
documents, other than as described in clause (a) or (b) above, that (in the
Master Servicer's judgment in accordance with the Servicing Standard) materially
impairs the value of the related Mortgaged Property as security for the Mortgage
Loan or otherwise materially and adversely affects the interests of
Certificateholders, which default has continued unremedied for the applicable
grace period under the terms of the Mortgage Loan (or, if no grace period is
specified, 60 days); or
(e) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law or the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have
been entered against the related Mortgagor and such decree or order shall have
remained in force undischarged or unstayed for a period of 60 days; or
(f) the related Mortgagor shall have consented to the appointment
of a conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshaling of assets and liabilities or similar proceedings of or relating
to such Mortgagor or of relating to all or substantially all of its property; or
(g) the related Mortgagor shall have admitted in writing its
inability to pay its debts generally as they become due, filed a petition to
take advantage of any applicable insolvency or reorganization statute, made an
assignment for the benefit of its creditors, or voluntarily suspended payment of
its obligations; or
(h) the Master Servicer shall have received notice of the
commencement of foreclosure or similar proceedings with respect to the related
Mortgaged Property;
provided that a Mortgage Loan will cease to be a Specially Serviced Mortgage
Loan when a Liquidation Event has occurred in respect of such Mortgage Loan, or
at such time as such of the following as are applicable occur with respect to
the circumstances identified above that caused the Mortgage Loan to be
characterized as a Specially Serviced Mortgage Loan (and provided that no other
Servicing Transfer Event then exists):
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(w) with respect to the circumstances described in clauses (a)
and (b) above, the related Mortgagor has made three
consecutive full and timely Monthly Payments under the
terms of such Mortgage Loan (as such terms may be changed
or modified in connection with a bankruptcy or similar
proceeding involving the related Mortgagor or by reason of
a modification, waiver or amendment granted or agreed to
by the Special Servicer pursuant to Section 8.18);
(x) with respect to the circumstances described in clauses
(c), (e), (f) and (g) above, such circumstances cease to
exist in the good faith and reasonable judgment of the
Special Servicer;
(y) with respect to the circumstances described in clause (d)
above, such default is cured; and
(z) with respect to the circumstances described in clause (h)
above, such proceedings are terminated.
"STARTUP DAY" means, with respect to each of REMIC I, REMIC II
and REMIC III, the day designated as such in Section 12.1(b).
"STATED MATURITY DATE" means, with respect to any Mortgage Loan,
the Due Date on which the last payment of principal is due and payable under the
terms of the related Mortgage Note as in effect on the Closing Date, without
regard to any change in or modification of such terms in connection with a
bankruptcy or similar proceeding involving the related Mortgagor or a
modification, waiver or amendment of such Mortgage Loan granted or agreed to by
the Master Servicer or Special Servicer pursuant to Section 8.18.
"STATED PRINCIPAL BALANCE" means, as of any date of
determination, with respect to any Mortgage Loan (including without limitation
any REO Mortgage Loan), an amount equal to (a) the unpaid principal balance of
such Mortgage Loan as of the Cut-off Date (or, in the case of a Replacement
Mortgage Loan, as of the related date of substitution), after application of all
payments due on or before such date, whether or not received, reduced on a
cumulative basis on each subsequent Distribution Date (to not less than zero) by
(b) the sum of (i) all payments (or P&I Advances in lieu thereof) of, and all
other collections allocated as provided in Section 1.2 to, principal of or with
respect to such Mortgage Loan that are (or, if they had not been applied to
cover any Additional Trust Expense, would have been) distributed to
Certificateholders on such Distribution Date, and (ii) the principal portion of
any Realized Loss incurred in respect of such Mortgage Loan during the related
Collection Period, provided that, notwithstanding the foregoing, if a
Liquidation Event occurs in respect of such Mortgage Loan (or any related REO
Property), then the "Stated Principal Balance" of such Mortgage Loan shall be
zero commencing as of the Distribution Date in the Collection Period next
following the Collection Period in which such Liquidation Event occurred.
"SUBORDINATE CERTIFICATES" means, collectively, the Class B,
Class C, Class D, Class E, Class F, Class G, Class H, Class J, Class K, Class L,
Class M, Class N and Class O Certificates.
"SUB-SERVICER" means any Person with which the Master Servicer or
the Special Servicer has entered into a Sub-Servicing Agreement.
"SUB-SERVICING AGREEMENT" means the written contract between the
Master Servicer or the Special Servicer and any Sub-Servicer relating to
servicing and administration of Mortgage Loans as provided in Section 8.4.
40
"SUBSTITUTION SHORTFALL AMOUNT" means, in connection with the
substitution of one or more Replacement Mortgage Loans for one or more Deleted
Mortgage Loans, the amount, if any, by which the Purchase Price or aggregate
Purchase Price, as the case may be (using the outstanding principal balance as
of the date of substitution), for such Deleted Mortgage Loan(s) exceeds the
initial Stated Principal Balance or aggregate Stated Principal Balance, as the
case may be, of such Replacement Mortgage Loan(s).
"TAX MATTERS PERSON" means the person designated as the "tax
matters person" of any REMIC Pool pursuant to Treasury Regulation Section
1.860F-4(d) and temporary Treasury Regulations Section 301.6231(a)(7)-1T (or
relevant successor provision), which initially shall be the person having the
largest Percentage Interest in the Residual Certificates of the related REMIC
Pool.
"TAX RETURNS" means the federal income tax return on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of each of REMIC I, REMIC II and REMIC III due to its
classification as a REMIC under the REMIC Provisions pursuant to its election
filed in accordance with Section 5.5 hereof, the federal income tax information
return on Internal Revenue Service Form 1041 U.S. Income Tax Return for Estate
and Trusts, to be filed on behalf of the grantor trust, and any and all other
information, reports or returns that may be required to be furnished to the
Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal or
state law.
"TERMINATION PRICE" shall have the meaning set forth in Section
10.1(b) herein.
"TRANSFER" means any direct or indirect transfer, sale, pledge,
hypothecation, or other form of assignment of any Ownership Interest in a
Certificate.
"TRANSFEREE" means any Person who is acquiring by Transfer any
Ownership Interest in a Certificate.
"TREASURY RATE" has the meaning set forth in Section 6.4.
"TRUST" means the trust created pursuant to this Agreement, the
assets which consist of all the assets of REMIC I, REMIC II and REMIC III and of
the grantor trust.
"TRUST FUND" means, collectively, all of the assets of the Trust.
"TRUSTEE" means Norwest Bank Minnesota, National Association, as
Trustee, or its successor-in-interest, or if any successor trustee or any
co-trustee shall be appointed as herein provided, then Trustee shall also mean
such successor trustee (subject to Section 7.7 hereof) and such co-trustee
(subject to Section 7.9 hereof), as the case may be.
"TRUSTEE FEE" means, with respect to each Mortgage Loan
(including without limitation each REO Mortgage Loan), the fee designated as
such and payable to the Trustee pursuant to Section 7.12, calculated on the
basis of a 360-day year consisting of twelve 30-day months.
"TRUSTEE FEE RATE" means 0.00375% per annum.
41
"UCC FINANCING STATEMENT" means a financing statement executed
and filed pursuant to the Uniform Commercial Code, as in effect in the relevant
jurisdiction, or, in the case of Louisiana, the comparable provisions of
Louisiana law.
"UNCERTIFICATED ACCRUED INTEREST" shall mean, with respect to any
class of uncertificated REMIC I Regular Interests or REMIC II Regular Interests
for any Distribution Date, the product of the Uncertificated Principal Balance
of such class as of the close of the preceding Distribution Date (or, in the
case of the first Distribution Date, as of the Closing Date) and one-twelfth of
the applicable REMIC I Remittance Rate or REMIC II Remittance Rate. The
Uncertificated Accrued Interest in respect of each class of REMIC I Regular
Interests and REMIC II Regular Interests shall accrue on the basis of a 360-day
year consisting of twelve 30-day months.
"UNCERTIFICATED DISTRIBUTABLE INTEREST" means, with respect to
any REMIC I Regular Interest or REMIC II Regular Interest for any Distribution
Date, an amount equal to: (a) the Uncertificated Accrued Interest in respect of
such REMIC I Regular Interest or REMIC II Regular Interest, as the case may be,
for such Distribution Date; reduced (to not less than zero) by (b) the portion
of any Net Aggregate Prepayment Interest Shortfall for such Distribution Date
allocated to such REMIC I Regular Interest or REMIC II Regular Interest, as the
case may be, as set forth below; and increased by (c) any Uncertificated
Distributable Interest in respect of such REMIC I Regular Interest or REMIC II
Regular Interest, as the case may be, for the immediately preceding Distribution
Date that was not deemed paid on the immediately preceding Distribution Date
pursuant to Section 6.2 or 6.3, as applicable, together with one month's
interest (calculated on the basis of a 360-day year consisting of twelve 30-day
months) on such unpaid Uncertificated Distributable Interest at the REMIC I
Remittance Rate or the REMIC II Remittance Rate, as the case may be, applicable
to such REMIC I Regular Interest or REMIC II Regular Interest, as the case may
be, for the current Distribution Date. The Net Aggregate Prepayment Interest
Shortfall for any Distribution Date shall be allocated: (i) among the respective
REMIC I Regular Interests, pro rata in accordance with the respective amounts of
Uncertificated Accrued Interest with respect thereto for such Distribution Date;
and (ii) among the respective REMIC II Regular Interests, pro rata in accordance
with the respective amounts of Uncertificated Accrued Interest with respect
thereto for such Distribution Date.
"UNCERTIFICATED PRINCIPAL BALANCE" means the principal amount of
any REMIC I Regular Interest or REMIC II Regular Interest outstanding as of any
date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC I Regular Interest shall equal the Cut-off Date Principal
Balance of the related Mortgage Loan. On each Distribution Date, the
Uncertificated Principal Balance of each REMIC I Regular Interest shall be
reduced by all distributions of principal deemed to have been made thereon on
such Distribution Date pursuant to Section 6.2 and, if and to the extent
appropriate, shall be further reduced on such Distribution Date as provided in
Section 6.5. As of the Closing Date, the Uncertificated Principal Balance of
each REMIC II Regular Interest shall equal the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC II
Regular Interest shall be reduced by all distributions of principal deemed to
have been made thereon on such Distribution Date pursuant to Section 6.3 and, if
and to the extent appropriate, shall be further reduced on such Distribution
Date as provided in Section 6.5.
"UNDERWRITABLE CASH FLOW" means, with respect to any Mortgaged
Property or REO Property, for any twelve month period (or such shorter period
calculated on an annualized basis), the underwritable cash flow amount
calculated in accordance with Exhibit H-1 hereto.
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"UNDERWRITERS" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated or its
successor in interest and Deutsche Bank Securities Inc. or its successor in
interest.
"UNINSURED CAUSE" means any cause of damage to property subject
to a Mortgage such that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies or flood insurance policies
required to be maintained pursuant to Section 8.5.
"UNITED STATES PERSON" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, an
estate whose income from sources without the United States is includable in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States or a
trust subject to the control of a United States person and the primary
supervision of a United States court.
"UNLEGENDED DEFINITIVE CERTIFICATE" means a Definitive
Certificate that does not bear the Securities Legend.
"USPAP" means the Uniform Standards of Professional Appraisal
Practices.
"VOTING RIGHTS" means the voting rights to which the
Certificateholders are entitled hereunder. At all times during the term of this
Agreement, 97% of the Voting Rights shall be allocated among the Holders of the
various outstanding Classes of Principal Balance Certificates in proportion to
the respective Class Principal Balances of their Certificates, 2% of the Voting
Rights shall be allocated to the Holders of the Interest Only Certificates, and
the remaining Voting Rights shall be allocated among the Holders of the
respective Classes of the Residual Certificates in three equal shares. Voting
Rights allocated to a Class of Certificateholders shall be allocated among
Certificateholders of such Class in proportion to the Percentage Interests
evidenced by their respective Certificates.
"WATCH LIST": A report substantially containing the content
described in Exhibit H-6 attached hereto, setting forth, among other things, any
Mortgage Loan that is in jeopardy of becoming a Specially Serviced Mortgage Loan
prepared in accordance with Section 8.14(j).
"WEIGHTED AVERAGE REMIC I REMITTANCE RATE" means, with respect to
each Distribution Date, the weighted average of the REMIC I Remittance Rates for
the REMIC I Regular Interests, weighted on the basis of the Uncertificated
Principal Balances of the REMIC I Regular Interest related to each Mortgage Loan
at the beginning of the related Collection Period (disregarding any REMIC I
Regular Interest with respect to which a Principal Prepayment in full was
received during the Collection Period on the Mortgage Loan to which such REMIC I
Regular Interest relates).
"WITHHELD AMOUNT": With respect to (a) each Distribution Date
occurring in (i) January of each calendar year that is not a leap year and (ii)
February of each calendar year, an amount equal to one day's interest at the
Mortgage Rate (less the Master Servicing Fee Rate and the Trustee Fee Rate) as
of the Due Date on the respective Stated Principal Balance of each Interest
Reserve Loan, to the extent that a Monthly Payment or a P&I Advance is made in
respect thereof.
"WORKOUT FEE" means, with respect to each Corrected Mortgage
Loan, the fee designated as such and payable to the Special Servicer pursuant to
Section 8.10(b).
"WORKOUT FEE RATE" means, with respect to each Corrected Mortgage
Loan as to which a Workout Fee is payable, 1.0% per annum.
43
SECTION 1.2. CERTAIN CALCULATIONS IN RESPECT OF THE MORTGAGE
POOL.
(a) All amounts collected in respect of any group of related
Cross-Collateralized Mortgage Loans (other than REO Mortgage Loans) in the form
of payments from Mortgagors, Insurance Proceeds, Condemnation Proceeds and
Liquidation Proceeds, shall be applied by the Master Servicer among such
Mortgage Loans in accordance with the express provisions of the related loan
documents and, in the absence of such express provisions, on a pro rata basis in
accordance with the respective amounts then "due and owing" as to each such
Mortgage Loan. All amounts collected in respect of any Mortgage Loan (whether or
not such Mortgage Loan is a Cross-Collateralized Mortgage Loan) other than an
REO Mortgage Loan, in the form of payments from Mortgagors, Condemnation
Proceeds, Insurance Proceeds, Liquidation Proceeds, Repurchase Proceeds or
payments of Substitution Shortfall Amounts shall be applied to amounts due and
owing under the related Mortgage Note and Mortgage (including, without
limitation, for principal and accrued and unpaid interest) in accordance with
the express provisions of the related Mortgage Note and Mortgage and, in the
absence of, or to the extent not covered by, such express provisions, shall be
applied for purposes of this Agreement: first, as a recovery of any related
unreimbursed Servicing Advances and, if applicable, unpaid Liquidation Expenses;
second, as a recovery of accrued and unpaid interest at the related Mortgage
Rate on such Mortgage Loan to but not including, as appropriate, the date of
receipt or, in the case of a full Monthly Payment from any Mortgagor, the
related Due Date, third, as a recovery of principal of such Mortgage Loan then
due and owing, including, without limitation, by reason of acceleration of the
Mortgage Loan following a default thereunder (or, if a Liquidation Event has
occurred in respect of such Mortgage Loan, as a recovery of principal to the
extent of its entire remaining unpaid principal balance); fourth, as a recovery
of amounts to be currently applied to the payment of, or escrowed for the future
payment of, real estate taxes, assessments, insurance premiums, ground rents (if
applicable) and similar items; fifth, as a recovery of Reserve Funds to the
extent then required to be held in escrow; sixth, as a recovery of any
Prepayment Premium then due and owing under such Mortgage Loan; seventh, as a
recovery of any Penalty Charges then due and owing under such Mortgage Loan;
eighth, as a recovery of any assumption fees and modification fees then due and
owing under such Mortgage Loan; ninth, as a recovery of any other amounts then
due and owing under such Mortgage Loan; and tenth, as a recovery of any
remaining principal of such Mortgage Loan to the extent of its entire remaining
unpaid principal balance. Notwithstanding the foregoing, any interest collected
on a Anticipated Repayment Date Loan that constitutes Excess Interest shall be
applied after the payment of the principal then due and owing on such Mortgage
Loan.
(b) Collections in respect of each REO Property (exclusive of
amounts to be applied to the payment of the costs of operating, managing,
maintaining and disposing of such REO Property) shall be treated: first, as a
recovery of any related unreimbursed Servicing Advances; second, as a recovery
of accrued and unpaid interest on the related REO Mortgage Loan at the related
Mortgage Rate to but not including the Due Date in the Collection Period of
receipt; third, as a recovery of principal of the related REO Mortgage Loan to
the extent of its entire unpaid principal balance; and fourth, as a recovery of
any other amounts deemed to be due and owing in respect of the related REO
Mortgage Loan.
(c) The foregoing applications of amounts received in respect of
any Mortgage Loan or REO Property shall be determined by the Master Servicer.
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SECTION 1.3. INTERPRETATION.
(a) As used herein and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in Section
1.1 shall have the respective meanings given to them under United States
generally accepted accounting principles or regulatory accounting principles, as
applicable.
(b) The words "hereof", "herein" and "hereunder", and words of
similar import when used in this Agreement, shall refer to this agreement as a
whole and not to any particular provision of this Agreement, and references to
Sections, Schedules and Exhibits contained in this Agreement are references to
Sections, Schedules and Exhibits in or to this Agreement unless otherwise
specified.
(c) Whenever a term is defined herein, the definition ascribed to
such term shall be equally applicable to both the singular and plural forms of
such term and to masculine, feminine and neuter genders of such term.
(d) This Agreement is the result of arm's-length negotiations
between the parties and has been reviewed by each party hereto and its counsel.
Each party agrees that any ambiguity in this Agreement shall not be interpreted
against the party drafting the particular clause which is in question.
ARTICLE II.
DECLARATION OF TRUST;
ISSUANCES OF CERTIFICATES
SECTION 2.1. CONVEYANCE OF MORTGAGE LOANS.
(a) The Depositor, concurrently with the execution and delivery
hereof, does hereby assign to the Trustee without recourse for the benefit of
the Certificateholders all the right, title and interest of the Depositor,
including any security interest therein for the benefit of the Depositor, in, to
and under (i) the Mortgage Loans identified on the Mortgage Loan Schedule, (ii)
Sections 2, 3, 6, 7, 9 and 18 of each Mortgage Loan Purchase Agreement and (iii)
all other assets included or to be included in REMIC I (as described in Section
12.1(a) hereof and the definition of REMIC I) or in the grantor trust (as
described in Section 12.1(b) hereof). Such assignment includes all interest and
principal received or receivable on or with respect to the Mortgage Loans (other
than payments of principal and interest due and payable on the Mortgage Loans on
or before the Cut-off Date). The transfer of the Mortgage Loans and the related
rights and property accomplished hereby is absolute and, notwithstanding Section
13.12, is intended by the parties to constitute a sale. Notwithstanding the
foregoing, the Seller shall not sell to the Depositor but shall instead retain
(i) the amount of any increase in the interest payable under the Santa ▇▇▇▇▇
▇▇▇▇ Mortgage Loan in the event that the Mortgage Rate thereunder increases
pursuant to the terms thereof because the related Mortgagor fails to become a
special purpose entity on or prior to January 31, 2000 as required in accordance
with the related Mortgage Loan documents and (ii) any fee payable by the
Mortgagor in connection with such increase (together, the "Retained Interest").
(b) In connection with the Depositor's assignment pursuant to
Section 2.1(a) above, the Depositor shall direct, and hereby represents and
warrants that it has directed, each Seller pursuant to the applicable Mortgage
Loan Purchase Agreement to deliver to and deposit with, or cause to be delivered
to and deposited with, the Trustee or a Custodian appointed thereby (with a copy
to the Master
45
Servicer), on or before the Closing Date, the Mortgage File for each Mortgage
Loan so assigned. If a Seller cannot so deliver, or cause to be delivered, as to
any of its Mortgage Loans, the original or a copy of any of the documents and/or
instruments referred to in clauses (ii), (iv), (viii), (xi)(A) and (xii) of the
definition of "Mortgage File", with (if appropriate) evidence of recording or
filing, as the case may be, thereon, solely because of a delay caused by the
public recording or filing office where such document or instrument has been
delivered for recordation or filing, the delivery requirements of this Section
2.1(b) shall be deemed to have been satisfied as to such missing item, and such
missing item shall be deemed to have been included in the related Mortgage File,
provided that such Seller has delivered to the Trustee on or before the Closing
Date a copy of such document or instrument (without evidence of recording or
filing thereon, but certified (which certificate may relate to multiple
documents and/or instruments) by such Seller to be a true and complete copy of
the original thereof submitted for recording or filing, as the case may be), and
the Seller shall deliver to or at the direction of the Trustee, promptly
following the receipt thereof, the original of such missing document or
instrument (or a copy thereof) with (if appropriate) evidence of recording or
filing, as the case may be, thereon. If a Seller cannot so deliver, or cause to
be delivered, as to any of its Mortgage Loans, the original or a copy of the
related lender's title insurance policy referred to in clause (ix) of the
definition of "Mortgage File" solely because such policy has not yet been
issued, the delivery requirements of this Section 2.1(b) shall be deemed to be
satisfied as to such missing item, and such missing item shall be deemed to have
been included in the related Mortgage File, provided that such Seller has
delivered to the Trustee on or before the Closing Date a "pro forma" title
insurance policy or a commitment for title insurance "marked-up" at the closing
of such Mortgage Loan, and such Seller shall deliver to or at the direction of
the Trustee, promptly following the receipt thereof, the original related
lender's title insurance policy (or a copy thereof). In addition,
notwithstanding anything to the contrary contained herein, if there exists with
respect to any group of related Cross-Collateralized Mortgage Loans only one
original of any document referred to in the definition of "Mortgage File"
covering all the Mortgage Loans in such group, then the inclusion of the
original of such document in the Mortgage File for any of the Mortgage Loans in
such group shall be deemed an inclusion of such original in the Mortgage File
for each such Mortgage Loan. None of the Trustee, any Custodian, the Master
Servicer or the Special Servicer shall be liable for any failure by any Seller
or the Depositor to comply with the document delivery requirements of the
Mortgage Loan Purchase Agreements and this Section 2.1(b).
If any Mortgage File contains an original letter of credit, the
Trustee or Custodian shall hold such letter of credit in a custodial capacity
only, and shall have no obligation to maintain, extend the term of, enforce or
otherwise pursue any rights under such letter of credit.
Notwithstanding the foregoing, the failure to deliver the
originals or copies of any of the documents or instruments referred to in
clauses (ii), (iv), (viii), (ix), (xi)(A) and (xii) of the definition of
"Mortgage File" shall constitute a Material Defect in respect of the related
Mortgage Loan under Section 2.3 hereof if not delivered within 120 days
following the Closing Date (or within such longer period after the Closing Date
as the Trustee may consent to, which consent shall not be unreasonably withheld
so long as the Seller has provided the Trustee with evidence of such recording
or filing, as the case may be, or has certified to the Trustee as to the
occurrence of such recording or filing, as the case may be, and is, as certified
to the Trustee no less often than quarterly, in good faith attempting to obtain
from the appropriate county recorder's or filing office such original or copy).
If any of the endorsements referred to in clause (i) of the
definition of "Mortgage File", or any of the assignments referred to in clauses
(iii), (v), (vii), (x)(B) and (xi)(B) of the definition of "Mortgage File", are
delivered to the Trustee in blank, the Trustee shall be responsible for
completing the related endorsement or assignment in the name of the Trustee (in
such capacity).
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(c) The Trustee shall, as to each Mortgage Loan, at the expense
of the related Seller, promptly (and in any event within 45 days after the later
of (i) the Closing Date (or, in the case of a Replacement Mortgage Loan
substituted as contemplated in Section 2.3, after the related date of
substitution) and (ii) the date on which all recording information necessary to
complete the subject document is received by the Trustee), cause to be submitted
for recording or filing, as the case may be, in the appropriate public office
for real property records or UCC Financing Statements, as appropriate, each
assignment to the Trustee referred to in clauses (iii), (v), (vii)(to the extent
the related security agreement was recorded), (x)(B)(to the extent the related
guaranty was recorded) and (xi)(B) of the definition of "Mortgage File", to the
extent delivered to the Trustee. Each such assignment shall reflect that it
should be returned by the public recording office to the Trustee or its designee
following recording or filing (and the Trustee shall deliver a copy thereof to
the Master Servicer); provided that in those instances where the public
recording office retains the original assignment of Mortgage, assignment of
Assignment of Leases, or assignment of security agreement the Trustee shall
obtain therefrom at the expense of the related Seller a certified copy of the
recorded original. If any such document or instrument is lost or returned
unrecorded or unfiled, as the case may be, because of a defect therein, the
Trustee shall direct the Master Servicer promptly to prepare and file or record
or cause to be prepared and filed or recorded, a substitute therefor or cure
such defect, as the case may be, at the expense of the related Seller.
(d) All documents and records in the possession of the Depositor
or the Sellers that relate to the Mortgage Loans and that are not required to be
a part of a Mortgage File in accordance with the definition thereof, together
with all Escrow Payments and Reserve Funds in the possession of the Depositor or
the Sellers with respect to the Mortgage Loans, shall be delivered to the Master
Servicer on or before the Closing Date and shall be held by the Master Servicer
on behalf of the Trustee in trust for the benefit of the Certificateholders.
(e) In connection with the Depositor's assignment pursuant to
Section 2.1(a) above, the Depositor shall deliver to the Trustee and the Master
Servicer on or before the Closing Date a copy of a fully executed counterpart of
each Mortgage Loan Purchase Agreement, as in full force and effect on the
Closing Date.
(f) The Depositor shall, as to each Mortgage Loan that is secured
by the interest of the related Mortgagor under a ground lease, at its own
expense, promptly (and in any event within 45 days of the Closing Date) notify
the related ground lessor of the transfer of such Mortgage Loan to the Trust
Fund pursuant to this Agreement and inform such ground lessor that any notices
of default under the related ground lease should thereafter be forwarded to the
Master Servicer.
SECTION 2.2. ACCEPTANCE BY TRUSTEE. The Trustee will hold (i) the
documents constituting a part of the Mortgage Files delivered to it, (ii) the
other REMIC I assets, (iii) the REMIC II assets and (iv) the REMIC III assets,
in each case, in trust for the use and benefit of all present and future
Certificateholders, and will hold the grantor trust assets for the use and
benefit of present and future Class O Certificateholders.
Upon execution and delivery of this Agreement in respect of the
Initial Certification, and within 75 days after the execution and delivery of
this Agreement in respect of the Final Certification, the Trustee shall examine
the Mortgage Files in its possession, and shall deliver to the Depositor, the
Master Servicer, the Special Servicer and each Seller a certification (the
"INITIAL CERTIFICATION" and the "FINAL CERTIFICATION", respectively, in the
respective forms set forth as Exhibit B-1 and Exhibit B-2 hereto) stating, (i)
in the case of the Initial Certification, as to each Mortgage Loan listed in the
Mortgage Loan Schedule, except as may be specified in the schedule of exceptions
to Mortgage File delivery attached
47
thereto, that (A) all documents specified in clause (i) of the definition of
"Mortgage File" are in its possession, (B) such documents have been reviewed by
it and have not been materially mutilated, damaged, defaced, torn or otherwise
physically altered, and such documents relate to such Mortgage Loan, and (C)
each Mortgage Note has been endorsed as provided in clause (i) of the definition
of "Mortgage File"; and (ii) in the case of the Final Certification, as to each
Mortgage Loan listed in the Mortgage Loan Schedule, except as may be certified
in the schedule of exceptions to Mortgage File delivery attached thereto, that
(W) all documents specified in clauses (i), (ii), (iii), (ix), (xii) (to the
extent it relates to the foregoing) and (xiii) are in its possession, (X) all
documents delivered to it or a Custodian as part of the related Mortgage File
have been reviewed by it or such Custodian and have not been materially
mutilated, damaged, defaced, torn or otherwise physically altered, and such
documents relate to such Mortgage Loan, (Y) based on its examination and only as
to the foregoing documents, the street address of the Mortgaged Property (but
not the zip code) and the name of the Mortgagor set forth in the Mortgage Loan
Schedule respecting such Mortgage Loan accurately reflects the information
contained in the documents in the Mortgage File and (Z) each Mortgage Note has
been endorsed as provided in clause (i) of the definition of "Mortgage File."
The Trustee shall deliver to the Master Servicer, the Special Servicer and each
Seller (as to its respective Mortgage Loans only), the Operating Adviser and the
Majority Certificateholder of the Controlling Class, a copy of such Final
Certification. Within 180 days after the Cut-off Date, the Trustee shall provide
a confirmation to the Master Servicer, the Special Servicer and each Seller of
receipt or non-receipt of recorded Assignments of Mortgage. In giving the
certifications required above, the Trustee shall be under no obligation or duty
to inspect, review or examine any such documents, instruments, securities or
other papers to determine whether they or the signatures thereon are valid,
legal, genuine, enforceable, in recordable form or appropriate for their
represented purposes, or that they are other than what they purport to be on
their face, or to determine whether any Mortgage File should include any
assumption agreement, modification agreement, consolidation agreement, extension
agreement, Assignment of Lease, ground lease, UCC Financing Statement, guaranty,
written assurance or substitution agreement; provided that to the extent the
Depositor has notified the Trustee in writing that any particular documents are
to be included in a particular Mortgage File, the Trustee shall confirm that
such documents are included in such Mortgage File.
The Trustee or its authorized agents shall retain possession and
custody of each Mortgage File in accordance with and subject to the terms and
conditions set forth herein.
SECTION 2.3. SELLERS' REPURCHASE OF MORTGAGE LOANS FOR DOCUMENT
DEFECTS AND BREACHES OF REPRESENTATIONS AND WARRANTIES.
(a) If any party hereto discovers that any document constituting
a part of a Mortgage File has a Material Defect, or discovers or receives notice
of a breach of any representation, warranty or covenant relating to any Mortgage
Loan set forth in the related Mortgage Loan Purchase Agreement, as the case may
be, that may give rise to a repurchase obligation on the part of the related
Seller (a "BREACH"), such party shall give prompt written notice to the other
parties hereto. Promptly upon becoming aware of any such Material Defect or
Breach, the Trustee shall request that the related Seller within the time period
provided for in the related Mortgage Loan Purchase Agreement cure such Material
Defect or Breach, as the case may be, in all material respects or repurchase the
affected Mortgage Loan for a cash amount equal to the applicable Purchase Price,
all in accordance with the related Mortgage Loan Purchase Agreement; provided,
however, that, in lieu of effecting any such repurchase, a Seller will be
permitted to deliver a Qualifying Substitute Mortgage Loan and to pay a cash
amount equal to the applicable Substitution Shortfall Amount, subject to the
terms and conditions of the related Mortgage Loan Purchase Agreement and this
Agreement. The Trustee agrees that if such Material Defect or breach
48
relates to an Owner Trust Loan, the Trustee shall first enforce its remedies
hereunder and under Mortgage Loan Purhcase Agreement II against FINOVA.
A document in the Mortgage File shall be deemed to have a
"MATERIAL DEFECT" if (a) any document required to be included in the Mortgage
File is not in the Trustee's possession within the time required to be
delivered, (b) such document has been mutilated, damaged, defaced, torn or
otherwise physically altered in any material respect at the time of its delivery
to the Trustee, (c) the information referred to in clause (Y) of Section 2.2
that is set forth in the Mortgage Loan Schedule respecting such Mortgage Loan
differs from the information contained in the documents in the Mortgage File, or
(d) the related Mortgage Note has not been endorsed or the related Mortgage has
not been assigned, or the related assignment of Mortgage has not been delivered
as provided in Section 2.1 hereof. Nothing contained herein shall be construed
to obligate the Trustee to review any Mortgage File, or any part thereof, except
as required by Section 2.2 hereof.
As to any Qualifying Substitute Mortgage Loan, the Trustee shall
direct the related Seller to deliver to the Trustee for such Qualifying
Substitute Mortgage Loan (with a copy to the Master Servicer), the related
Mortgage File with the related Mortgage Note endorsed as required by clause (i)
of the definition of "Mortgage File." No substitution may be made in any
calendar month after the Determination Date for such month. Monthly Payments due
with respect to Qualifying Substitute Mortgage Loans after the related date of
substitution, and Monthly Payments due with respect to Deleted Mortgage Loans
after the Cut-off Date and on or prior to the related date of substitution,
shall be part of the Trust Fund. Monthly Payments due with respect to Qualifying
Substitute Mortgage Loans on or prior to the related date of substitution, and
Monthly Payments due with respect to Deleted Mortgage Loans after the related
date of substitution, shall not be part of the Trust Fund and will be remitted
by the Master Servicer to the related Seller promptly following receipt.
In any month in which a Seller substitutes one or more Qualifying
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Master
Servicer will determine the applicable Substitution Shortfall Amount. The
Trustee shall direct such Seller to deposit cash equal to such amount into the
Collection Account concurrently with the delivery of the Mortgage File for the
Qualifying Substitute Mortgage Loan, without any reimbursement thereof. The
Master Servicer shall give written notice to the Trustee of such deposit
promptly following the occurrence thereof.
If the affected Mortgage Loan is to be repurchased, the Trustee
shall designate the Collection Account as the account to which funds in the
amount of the Purchase Price are to be wired. Any such purchase of a Mortgage
Loan shall be on a whole loan, servicing released basis.
The Trustee shall direct the related Seller to amend the Mortgage
Loan Schedule to reflect the removal of each Deleted Mortgage Loan and, if
applicable, the substitution of the Qualifying Substitute Mortgage Loan; and,
upon such amendment, the Trustee shall deliver or cause the delivery of such
amended Mortgage Loan Schedule to the other parties hereto. Upon any such
substitution, the Qualifying Substitute Mortgage Loan shall be subject to the
terms of this Agreement in all respects.
(b) In connection with any repurchase of or substitution for a
Mortgage Loan contemplated by this Section 2.3, the Trustee, the Master Servicer
and the Special Servicer shall each promptly tender to the related Seller, upon
delivery to each of them of a receipt executed by such Seller, all portions of
the Mortgage File and other documents pertaining to such Mortgage Loan possessed
by it, and each document that constitutes a part of the Mortgage File shall be
endorsed or assigned by the Trustee (or the Master Servicer on behalf of the
Trustee) to the extent necessary or appropriate to the related Seller, or its
designee in the same manner, and pursuant to appropriate forms of assignment (to
be
49
provided by the Master Servicer), substantially similar to the manner and
forms pursuant to which documents were previously assigned to the Trustee, but
in any event, without recourse, representation or warranty; provided that such
tender by the Trustee shall be conditioned upon its receipt from the Master
Servicer of a Request for Release.
(c) The Mortgage Loan Purchase Agreements provide the sole
remedies available to the Certificateholders, or the Trustee on behalf of the
Certificateholders, respecting any Material Defect or Breach.
SECTION 2.4. REPRESENTATIONS AND WARRANTIES. The Depositor hereby
represents and warrants to the Master Servicer, the Special Servicer and the
Trustee as of the Closing Date that:
(i) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and has full corporate power and authority to own its
property, to carry on its business as presently conducted, to enter into
and perform its obligations under this Agreement, and to create the
trust pursuant hereto;
(ii) The execution and delivery by the Depositor of this
Agreement have been duly authorized by all necessary corporate action on
the part of the Depositor; neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein contemplated,
nor compliance with the provisions hereof, will conflict with or result
in a breach of, or constitute a default under, (A) any of the provisions
of any law, governmental rule, regulation, judgment, decree or order
binding on the Depositor or its properties; (B) the certificate of
incorporation or bylaws of the Depositor; or (C) the terms of any
indenture or other agreement or instrument to which the Depositor is a
party or by which it is bound; neither the Depositor nor any of its
Affiliates is a party to, bound by, or in breach of or violation of any
indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory
body, administrative agency or governmental body having jurisdiction
over it, which materially and adversely affects or to the best knowledge
of the Depositor may in the future materially and adversely affect (X)
the ability of the Depositor to perform its obligations under this
Agreement or (Y) the business, operations, financial condition,
properties or assets of the Depositor;
(iii) The execution, delivery and performance by the
Depositor of this Agreement and the consummation of the transactions
contemplated hereby do not require the consent or approval of, the
giving of notice to, the registration with, or the taking of any other
action in respect of, any state, federal or other governmental authority
or agency, except such as has been obtained, given, effected or taken
prior to the Closing Date;
(iv) This Agreement has been duly executed and delivered
by the Depositor and, assuming due authorization, execution and delivery
by the other parties hereto, constitutes a valid and binding obligation
of the Depositor enforceable against it in accordance with its terms;
(v) There are no actions, suits or proceedings pending or,
to the best of the Depositor's knowledge, threatened or likely to be
asserted against or affecting the Depositor, before or by any court,
administrative agency, arbitrator or governmental body (A) with respect
to any of the transactions contemplated by this Agreement or (B) with
respect to any other matter that in the judgment of the Depositor will
be determined adversely to the Depositor and will, if determined
adversely to the Depositor, materially and adversely affect it or its
business, assets,
50
operations or condition, financial or otherwise, or adversely affect its
ability to perform its obligations under this Agreement; and
(vi) Immediately prior to the consummation of the
transactions contemplated in this Agreement, the Depositor had good
title to and was the sole owner of each Mortgage Loan free and clear of
any and all adverse claims, charges or security interests.
SECTION 2.5. CONVEYANCE OF INTERESTS. Concurrently with the
execution and delivery of this Agreement, the Depositor does hereby transfer,
assign, set over, deposit with and otherwise convey to the Trustee, without
recourse, in trust, all the right, title and interest of the Depositor in and to
(i) the REMIC I Regular Interests in exchange for the REMIC II Interests, (ii)
the REMIC II Regular Interests in exchange for the REMIC III Certificates, and
(iii) the assets of the grantor trust in exchange for the 100% beneficial
ownership interest therein represented by the Class O Certificates.
ARTICLE III.
THE CERTIFICATES
SECTION 3.1. THE CERTIFICATES.
(a) The Certificates shall be in substantially the forms set
forth in Exhibits A-1 through A-16 hereto, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Agreement or as may in the reasonable judgment of the Trustee or the
Depositor be necessary, appropriate or convenient to comply, or facilitate
compliance, with applicable laws, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as may
be required to comply with the rules of any securities exchange on which any of
the Certificates may be listed, or as may, consistently herewith, be determined
by the officers executing such Certificates, as evidenced by their execution
thereof.
The Definitive Certificates shall be printed, typewritten,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner permitted by the rules of any securities
exchange on which any of the Certificates may be listed, all as determined by
the officers executing such Certificates, as evidenced by their execution
thereof.
(b) The Certificates will be issued in minimum denominations of
(i) $25,000 initial Certificate Principal Balance, in the case of the Class A-1
and Class A-2 Certificates, (ii) $50,000 initial Certificate Principal Balance,
in the case of the Class B Certificates, and (iii) $100,000 initial Certificate
Principal Balance or Certificate Notional Amount, as applicable, in the case of
the remaining Classes of Certificates (other than the Residual Certificates),
and in each case in integral multiples of $1 in excess thereof. The Residual
Certificates will be issued in minimum Percentage Interests of not less than
10%.
(c) Each Certificate shall, on original issue, be authenticated
by the Trustee or the Authenticating Agent upon the order of the Depositor. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certification of
authentication substantially in the form provided for herein, executed by an
authorized officer of the Trustee or the Authenticating Agent, if any, by manual
signature, and such certification upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. At
51
any time and from time to time after the execution and delivery of this
Agreement, the Depositor may deliver Certificates to the Trustee for
authentication, and the Trustee or the Authenticating Agent shall authenticate
and deliver such Certificates as in this Agreement provided and not otherwise.
In the event that additional Certificates need to be prepared at any time
subsequent to the Closing Date, the Depositor shall prepare, or cause to be
prepared, and deliver, or cause to be delivered, at the Depositor's expense, any
such additional Certificates. With respect to the REMIC III Regular
Certificates, on the Closing Date the Trustee or the Authenticating Agent upon
the order of the Depositor shall authenticate Definitive Certificates that are
issued to a Clearing Agency or its nominee as provided in Section 3.6 against
payment of the purchase price thereof in exchange for book-entry credit to the
Depositor's account.
SECTION 3.2. REGISTRATION. The Trustee initially shall be the
registrar (the "CERTIFICATE REGISTRAR") in respect of the Certificates who shall
maintain books for the registration and for the transfer of Certificates (the
"CERTIFICATE REGISTER"). The Certificate Registrar may resign or be discharged
or removed by the Trustee or the Certificateholders, and a new successor may be
appointed, in accordance with the procedures and requirements set forth in
Sections 7.6 and 7.7 hereof with respect to the resignation, discharge or
removal of the Trustee and the appointment of a successor Trustee. The
Certificate Registrar may appoint, by a written instrument delivered to the
Holders and the Trustee, any trust company to act as co-registrar under such
conditions as the Certificate Registrar may prescribe; provided that the
Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment.
SECTION 3.3. TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) A Certificate may be transferred by the Holder thereof only
upon presentation and surrender of such Certificate at the Corporate Trust
Office duly endorsed or accompanied by a written instrument of transfer duly
executed by such Holder or such Holder's duly authorized attorney in such form
as shall be satisfactory to the Certificate Registrar. Upon the transfer of any
Certificate in accordance with the preceding sentence, and subject to the
restrictions set forth in the other subsections of this Section 3.3, the Trustee
shall execute, and the Trustee or any Authenticating Agent shall authenticate
and deliver to the transferee, one or more new Certificates of the same Class,
in authorized denominations, and evidencing, in the aggregate, the same
aggregate Certificate Principal Balance, Certificate Notional Amount or
Percentage Interest, as the case may be, as the Certificate being transferred.
No service charge shall be made to a Certificateholder for any registration of
transfer of Certificates, but the Certificate Registrar may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration or transfer of Certificates. The Trustee may
decline to accept any request for a registration of transfer of any Certificate
during the period beginning five calendar days prior to any Distribution Date.
(b) A Certificate may be exchanged by the Holder thereof for
any number of new Certificates of the same Class, in authorized denominations,
representing in the aggregate the same aggregate Certificate Principal Balance,
Certificate Notional Amount or Percentage Interest, as the case may be, as the
Certificate surrendered, upon surrender of the Certificate to be exchanged at
the Corporate Trust Office duly endorsed or accompanied by a written instrument
of exchange duly executed by such Holder or such Holder's duly authorized
attorney in such form as is satisfactory to the Certificate Registrar.
Certificates delivered upon any such exchange will evidence the same
obligations, and will be entitled to the same rights and privileges, as the
Certificates surrendered. No service charge shall be made to a Certificateholder
for any exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection
52
with any exchange of Certificates. Whenever any Certificates are so surrendered
for exchange, the Trustee shall execute and the Trustee or the Authenticating
Agent shall authenticate, date and deliver the Certificates that the
Certificateholder making the exchange is entitled to receive.
(c) All Definitive Certificates that are Privately Offered
Certificates shall initially be Legended Definitive Certificates. By acceptance
of a Legended Definitive Certificate, whether upon original issuance or
subsequent transfer, each Holder of such a Certificate acknowledges the
restrictions on the transfer of such Certificate set forth in the Securities
Legend and agrees that it will transfer such a Certificate only as provided
herein.
The Securities Legend shall appear on the face of the Legended
Definitive Certificates as follows:
THE CERTIFICATES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A)(1) TO A BUYER THAT THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (3) TO
A BUYER WHOM THE SELLER REASONABLY BELIEVES IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) or
(7) OF REGULATION D OF THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION.
A transferee shall only be able to take delivery of an Unlegended
Definitive Certificate that is a Privately Offered Certificate if and after the
Depositor submits to the Trustee an Opinion of Counsel of the Depositor stating
that the Securities Legend is not required on such Definitive Certificate by
applicable law. Upon the Depositor submitting such Opinion of Counsel to the
Trustee, the Holder of such Certificate may submit such Certificate to the
Trustee to exchange such Certificate for an Unlegended Definitive Certificate,
which is to be provided by the Depositor, and the Trustee shall satisfy such
request notwithstanding anything else herein to the contrary, and delivery
permitted herein of a Legended Definitive Certificate may be made in the form of
an Unlegended Definitive Certificate.
Except as described below in Sections 3.3(d), 3.3(e) and 3.3(f),
no restrictions to transfer shall apply to the transfer or registration of
transfer of an Unlegended Definitive Certificate to a transferee that takes
delivery in the form of an Unlegended Definitive Certificate.
(d) (i) No transfer of a Senior Certificate shall be made unless
in accordance with the prohibited transaction rules of ERISA and Section
4975 of the Code and the terms of the Exemption as described in the
Prospectus Supplement under "ERISA Considerations". No employee benefit
plan or other plan that is subject to ERISA or Section 4975 of the Code
(each, a "PLAN") as to which the Initial Purchaser, the Depositor, the
Master Servicer, the Special Servicer, the Operating Adviser or the
Trustee is a party in interest or disqualified person, and no QIB acting
on behalf of or with "plan assets" of any such Plan, may acquire such
Certificates
53
unless pursuant to a statutory exemption or any of the administrative
exemptions issued by the U.S. Department of Labor, such that the
acquisition and holding of Senior Certificates by, on behalf of or with
"plan assets" of such Plan would not constitute or result in a
non-exempt prohibited transaction under ERISA or Section 4975 of the
Code by reason of the application of one or more of the statutory or
administrative exemptions from the prohibited transaction rules
described in the Memorandum.
(ii) No transfer of a Subordinate Certificate shall be
made unless the acquirer (i) is not a Plan and is not using "plan
assets" of any Plan to acquire such Certificates, or (ii) is an
insurance company investing solely assets of its general account and
such purchase and holding of such Certificates will not result in a
non-exempt prohibited transaction under ERISA or Section 4975 of the
Code.
(e) No transfer, sale, pledge or other disposition of any
Privately Offered Certificate or interest therein shall be made unless that
transfer, sale, pledge or other disposition is exempt from the registration
and/or qualification requirements of the Securities Act and any applicable state
securities laws, or is otherwise made in accordance with the Securities Act and
such state securities laws. If a transfer of any Privately Offered Certificate
held as a Definitive Certificate is to be made without registration under the
Securities Act (other than in connection with the initial issuance of the
Certificates or a transfer of such Privately Offered Certificate by the
Depositor or one of its Affiliates), then the Certificate Registrar shall refuse
to register such transfer unless it receives (and upon receipt, may conclusively
rely upon) either: (i) a certificate from the Certificateholder desiring to
effect such transfer substantially in the form attached as Exhibit D-1 hereto
and a certificate from such Certificateholder's prospective Transferee
substantially in the form attached either as Exhibit D-2A hereto or as Exhibit
D-2B hereto; or (ii) an Opinion of Counsel satisfactory to the Trustee to the
effect that such transfer shall be made without registration under the
Securities Act, together with the written certification(s) as to the facts
surrounding such transfer from the Certificateholder desiring to effect such
transfer and/or such Certificateholder's prospective Transferee on which such
Opinion of Counsel is based (such Opinion of Counsel shall not be an expense of
the Trust or of the Depositor, the Master Servicer, the Special Servicer, the
Trustee or the Certificate Registrar in their respective capacities as such). If
a transfer of any interest in a Privately Offered Certificate that constitutes a
Book-Entry Certificate is to be made without registration under the Securities
Act (other than in connection with the initial issuance of the Certificates or a
transfer of any interest in such Privately Offered Certificate by the Depositor
or any of its Affiliates), then the Certificate Owner desiring to effect such
transfer shall be required to obtain either (i) a certificate from such
Certificate Owner's prospective Transferee substantially in the form attached as
Exhibit D-3A hereto or as Exhibit D-3B hereto, or (ii) an Opinion of Counsel to
the effect that such transfer may be made without registration under the
Securities Act. None of the Depositor, the Trustee, the Master Servicer or the
Certificate Registrar is obligated to register or qualify any Class of Privately
Offered Certificates under the Securities Act or any other securities law or to
take any action not otherwise required under this Agreement to permit the
transfer of any qualification. Any Certificateholder or Certificate Owner
desiring to effect a transfer of Privately Offered Certificates or interests
therein shall, and does hereby agree to, indemnify the Depositor, the
Underwriter, the Trustee, the Master Servicer, the Special Servicer and the
Certificate Registrar against any liability that may result if the transfer is
not exempt from such registration or qualification or is not made in accordance
with such federal and state laws.
(f) (i) No Residual Certificate may be held or beneficially
owned by a Disqualified Organization. The Residual Certificates shall
not be held or beneficially owned by a non-United States Person. Prior
to the registration of any transfer, sale, pledge or other
54
disposition of a Residual Certificate, the proposed transferee shall
provide to the Trustee a Transfer Affidavit and Agreement in
substantially the form set forth in Exhibit F, to the effect that such
transferee (1) agrees to be bound by the terms of this Agreement and any
restrictions set forth on the face of such Residual Certificate, as the
case may be, and (2) is not a Disqualified Organization or a non-United
States Person and will not hold such Residual Certificate on behalf of a
Disqualified Organization or non-United States Person, and will promptly
notify the Trustee of any change or impending change in its status as
such. The transferor of the Residual Certificate shall also provide the
Trustee with a Transferor Certificate substantially in the form of
Exhibit E.
(ii) In addition, any transfer, sale, pledge or other
disposition of any such Certificate to a Pass-Through Entity shall not
be registered (to the extent the Certificate Registrar has actual
knowledge that the transferee is a Pass-Through Entity), unless the
proposed transferee shall have agreed in writing, in such form as the
Trustee may require, to provide to the Trustee such information as the
Trustee may reasonably require concerning any record interest holder or
principal of such Pass-Through Entity who is or was a Disqualified
Organization. Any Holder of a Residual Certificate, by its acceptance
thereof, shall be deemed for all purposes to have consented to the
provisions of this Section 3.3(f).
(iii) The restrictions described in this Section 3.3(f)
shall not apply to a transfer of any such Certificate if the Trustee has
received an Opinion of Counsel to the effect that the restrictions
described in this Section 3.3(f) are not necessary to avoid the
imposition of tax on a REMIC or the disqualification of any REMIC as a
REMIC under the Code.
(iv) (A) If any Disqualified Organization shall become a
Holder of a Residual Certificate, then the last-preceding
non-Disqualified Organization shall be restored, to the extent permitted
by law, to all rights and obligations as Holder thereof retroactive to
the date of registration of such transfer of such Residual Certificate.
If a non-United States Person shall become a holder of a Residual
Certificate, then the last-preceding United States Person shall be
restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such
transfer of such Residual Certificate. If a transfer of a Residual
Certificate is disregarded pursuant to the provisions of Treasury
Regulations Section 1.860E-1 or Section 1.860G-3, then the
last-preceding Permitted Transferee shall be restored, to the extent
permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such transfer of such
Residual Certificate. The Trustee shall be under no liability to any
Person for any registration of transfer of a Residual Certificate that
is in fact not permitted by this Section 3.3(f) or for making any
payments due on such Certificate to the holder thereof or for taking any
other action with respect to such holder under the provisions of this
Agreement.
(B) If any purported transferee shall become a Holder of a
Residual Certificate in violation of the restrictions in this Section
3.3(f) and to the extent that the retroactive restoration of the rights
of the Holder of such Residual Certificate as described in clause
(iv)(A) above shall be invalid, illegal or unenforceable, then the
Trustee shall have the right, without notice to the holder or any prior
holder of such Residual Certificate, to sell such Residual Certificate
to a purchaser selected by the Trustee on such terms as the Trustee may
choose. Such purported transferee shall promptly endorse and deliver
each Residual Certificate in accordance with the instructions of the
Trustee. Such purchaser may be the Trustee itself or any Affiliate of
the Trustee. The proceeds of such sale, net of the commissions (which
may include commissions payable to the Trustee or its Affiliates),
expenses and taxes due, if any, will
55
be remitted by the Trustee to such purported transferee. The terms and
conditions of any sale under this clause (iv)(B) shall be determined in
the sole discretion of the Trustee, and the Trustee shall not be liable
to any Person having an ownership interest in a Residual Certificate as
a result of its exercise of such discretion.
(v) Trustee shall make available all information necessary
to compute any tax imposed (A) as a result of the transfer of an
ownership interest in a Residual Certificate to any Person who is a
Disqualified Organization, including the information regarding "excess
inclusions" of such Residual Certificates required to be provided to the
Internal Revenue Service and certain Persons as described in Treasury
Regulations Sections 1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a
result of any regulated investment company, real estate investment
trust, common trust fund, partnership, trust, estate or organization
described in Section 1381 of the Code that holds an ownership interest
in a Residual Certificate having as among its record holders at any time
any Person who is a Disqualified Organization. Reasonable compensation
for providing such information may be required by the Trustee from such
Person.
(g) Each investor purchasing Privately Offered Certificates from
either Underwriter will be deemed to have represented and agreed as follows
(terms used herein that are defined in Rule 144A or in Regulation D under the
Securities Act ("REGULATION D") are used herein as defined therein):
(i) The investor understands that the Certificates have
not been registered under the Securities Act, and that if in the future
it decides to offer, resell, pledge or otherwise transfer such
Certificates within two years after the later of the original issuance
of such Certificates or the last date on which such Certificates are
held by an affiliate of the Depositor, it will do so only (i) to the
Depositor, (ii) to a person that the seller reasonably believes is a QIB
in a transaction meeting the requirements of Rule 144A, (iii) pursuant
to an exemption from registration under the Securities Act provided by
Rule 144 thereunder (if available), or (iv) in certificated form to an
Institutional Accredited Investor that delivers to the Trustee a letter
in the form of Exhibit D-2B hereto and such certifications, legal
opinions and other information as the Trustee may reasonably require to
confirm that the proposed transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act, and in each case in accordance with
any applicable securities laws of any state of the United States or any
other applicable jurisdiction.
(ii) The investor understands that the Certificates,
except for the Residual Certificates, will be issued only in the form of
Book-Entry Certificates, which will be held by the Custodian. Purchasers
of such Certificates will acquire beneficial interests in the Book-Entry
Certificates, which interests will be held directly or indirectly
through Participants.
(iii) The investor understands that Certificates will bear
a Securities Legend unless the Depositor determines otherwise consistent
with applicable law.
The Senior Certificates will also bear the following additional
legend:
NOTWITHSTANDING THE ABOVE, IF THE TRANSFEREE OF THIS CERTIFICATE IS AN
EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY
PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, OR ANY PERSON ACTING ON BEHALF OF SUCH PLAN OR USING THE ASSETS
OF ANY SUCH PLAN TO ACQUIRE OR HOLD THIS CERTIFICATE, SUCH
56
PLAN OR SUCH PERSON MUST BE AN ACCREDITED INVESTOR WITHIN THE MEANING
OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").
The Subordinate Certificates will also bear the following legend:
NOTWITHSTANDING THE ABOVE, THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED OR
OTHERWISE TRANSFERRED TO ANY PERSON THAT IS AN EMPLOYEE BENEFIT OR OTHER
PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION
4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR
ANY PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR USING THE ASSETS OF SUCH
PLAN TO ACQUIRE THIS CERTIFICATE, EXCEPT FOR AN INSURANCE COMPANY
INVESTING SOLELY ASSETS OF ITS GENERAL ACCOUNT, WHICH SHALL BE DEEMED TO
HAVE REPRESENTED AND WARRANTED THAT THE PURCHASE AND OWNERSHIP OF THE
CERTIFICATE WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER
ERISA OR SECTION 4975 OF THE CODE.
The Residual Certificates will also bear the following additional
legend:
THIS CERTIFICATE MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED TO
"DISQUALIFIED ORGANIZATIONS" WITHIN THE MEANING OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED.
(iv) The investor is either (A) a QIB purchasing for its
own account or for the account of another QIB and it and such other
Person are aware that the sale to it is being made in reliance on Rule
144A or (B) an Institutional Accredited Investor and is purchasing the
Certificates for its own account or for an account with respect to which
it exercises sole investment discretion.
(v) If the investor is a QIB, the investor understands
that the Certificates offered in reliance on Rule 144A will be
represented by the Book-Entry Certificates. Before any interest in the
Book-Entry Certificates may be offered, sold, pledged or otherwise
transferred to an Institutional Accredited Investor, the transferee will
be required to provide the Trustee with a Purchaser's Letter in the form
attached hereto as Exhibit D-3A as to compliance with the transfer
restrictions referred to above.
(vi) The investor will deliver to each Institutional
Accredited Investor to whom it transfers Certificates notice of any
restrictions on transfer of such Certificates.
(vii) If the investor is acquiring Senior Certificates, it
understands that, in accordance with the prohibited transaction rules of
ERISA and Section 4975 of the Code and the terms of the Exemptions (as
such term is defined and described under the heading "ERISA
CONSIDERATIONS" in the Prospectus Supplement), no Plan as to which
either Underwriter, the Depositor, the Master Servicer, the Special
Servicer, the Operating Adviser or the Trustee is a party in interest or
disqualified person, and no qualified institutional buyer acting on
behalf of or with "plan
57
assets" of any such Plan, may acquire such Certificates unless pursuant
to a statutory exemption or any of the administrative exemptions issued
by the U.S. Department of Labor, such that the acquisition and holding
of Senior Certificates by, on behalf of or with "plan assets" of such
Plan would not constitute or result in a non-exempt prohibited
transaction under ERISA or Section 4975 of the Code by reason of the
application of one or more of the statutory or administrative exemptions
from the prohibited transaction rules described herein.
(viii) If the investor is acquiring Subordinate or
Residual Certificates, (i) it is not a Plan and is not using "plan
assets" of any Plan to acquire such Certificates and (ii) if it is an
insurance company, it is investing solely assets of its general account,
and it shall be deemed to have represented and warranted that the
purchase and holding of such Certificates will not constitute or result
in a non-exempt prohibited transaction under ERISA or Section 4975 of
the Code.
(ix) If the investor is acquiring any Privately Offered
Certificate as a fiduciary or agent for one or more investor accounts,
it represents that it has sole investment discretion with respect to
such account and that it has full power to make the acknowledgments,
representations and agreements contained herein on behalf of each such
account.
(x) The investor acknowledges that the Depositor, the
Underwriters, the Trustee and others will rely on the truth and accuracy
of the foregoing acknowledgments, representations and agreements, and
agrees that if any of the foregoing representations and agreements
deemed to have been made by it by its purchase are no longer accurate,
it shall promptly notify the Depositor and the Underwriters.
(xi) Each original purchaser of the Certificates will be
required to sign a Purchaser's Letter in the form attached as ▇▇▇▇▇▇▇
▇-▇▇, ▇-▇▇, ▇-▇▇ or D-3B hereto.
(xii) The Trustee shall have no liability to the Trust
arising from a transfer of any Certificate in reliance upon a
certification, ruling or Opinion of Counsel described in this Section
3.3; provided, however, that the Trustee shall not register the transfer
of a Residual Certificate if it has actual knowledge that the proposed
transferee does not meet the qualifications of a permitted Holder of a
Residual Certificate as set forth in this Section 3.3.
SECTION 3.4. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If (a) any mutilated Certificate is surrendered to the Trustee, or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Certificate and (b) except in the case of a mutilated Certificate so
surrendered, there is delivered to the Trustee such security or indemnity as may
be required by it to save it harmless, then, in the absence of notice to the
Trustee that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute, authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of
like tenor and interest in the Trust. In connection with the issuance of any new
Certificate under this Section 3.4, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section 3.4 shall constitute complete and indefeasible evidence of
ownership in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
SECTION 3.5. PERSONS DEEMED OWNERS. Prior to presentation of a
Certificate for registration of transfer, the Depositor, the Master Servicer,
the Special Servicer, the Trustee, the Operating Adviser and any agent of the
Depositor, the Master Servicer, the Special Servicer, the Trustee or the
Operating Adviser may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions as provided in this Agreement and for all other
58
purposes whatsoever, and neither the Master Servicer, the Special Servicer, the
Trustee, the Operating Adviser nor any agent of the Master Servicer, the Special
Servicer, the Trustee or the Operating Adviser shall be affected by any notice
to the contrary.
SECTION 3.6. BOOK-ENTRY CERTIFICATES.
(a) Notwithstanding the foregoing, each Class of REMIC III
Regular Certificates, upon original issuance, shall be issued in the form of one
or more physical certificates (collectively, as to any Class of Book-Entry
Certificates, a "GLOBAL CERTIFICATE") representing such Class, to be delivered
to the Trustee, as custodian for The Depository Trust Company (the
"DEPOSITORY"), the initial Clearing Agency, by, or on behalf of, the Depositor.
The Global Certificates shall initially be registered on the Certificate
Register in the name of Cede & Co., the nominee of the Depository, as the
initial Clearing Agency, and no Certificate Owner will receive a Definitive
Certificate representing such Certificate Owner's interest in the Book-Entry
Certificates, except as provided in Section 3.8. Unless and until Definitive
Certificates have been issued to the Certificate Owners pursuant to Section 3.8:
(i) the provisions of this Section 3.6 shall be in full
force and effect with respect to each such Class;
(ii) the Depositor, the Master Servicer, the Certificate
Registrar and the Trustee may deal with the Clearing Agency for all
purposes (including the making of distributions on the Certificates) as
the authorized representative of the Certificate Owners;
(iii) to the extent that the provisions of this Section
3.6 conflict with any other provisions of this Agreement, the provisions
of this Section 3.6 shall control with respect to each such Class; and
(iv) the rights of the Certificate Owners of each such
Class shall be exercised only through the Clearing Agency and the
applicable Participants and shall be limited to those established by law
and agreements between such Certificate Owners and the Clearing Agency,
the Participants and/or the Indirect Participants. Pursuant to the
Depository Agreement, unless and until Certificates are issued in
respect of such Classes pursuant to Section 3.8, the initial Clearing
Agency will make book-entry transfers among the Participants and receive
and transmit distributions of principal and interest on the related
Certificates to such Participants.
(b) For purposes of any provision of this Agreement requiring or
permitting actions with the consent of, or at the direction of, Holders of the
Certificates evidencing a specified percentage of the aggregate unpaid principal
(and, in the case of the Class X Certificates, notional) amount of Certificates,
such direction or consent may be given in respect of such Classes by the
Clearing Agency at the direction of Certificate Owners owning Certificates
evidencing the requisite percentage of principal (and, in the case of the Class
X Certificates, notional) amount of Certificates. The Clearing Agency may take
conflicting actions with respect to the Certificates to the extent that such
actions are taken on behalf of the Certificate Owners.
SECTION 3.7. NOTICES TO CLEARING AGENCY. Whenever a notice or
other communication to the Certificateholders is required under this Agreement,
unless and until Definitive Certificates shall have been issued to the related
Certificateholders pursuant to Section 3.8, the Trustee shall give all such
notices and communications specified herein to be given to Holders of the
Book-Entry Certificates to the Clearing Agency which shall give such notices and
communications to the related Participants in accordance with its applicable
rules, regulations and procedures.
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SECTION 3.8. DEFINITIVE CERTIFICATES.
(a) Definitive Certificates will be issued to the owners of
beneficial interests in a Class of Book-Entry Certificates or their nominees if
(i) the Depository notifies the Depositor and the Trustee in writing that the
Depository is unwilling or unable to continue as Clearing Agency for the
Book-Entry Certificates and a qualifying successor Clearing Agency is not
appointed by the Depositor within 90 days thereof, (ii) the Depositor, at its
option, elects to terminate the book-entry system through the Clearing Agency or
(iii) an Event of Default shall have occurred and is continuing and Holders of
Book-Entry Certificates entitled to at least 51% of the Voting Rights thereof
advise the Depository and the Trustee that the continuation of the book-entry
system through the Depository (or a successor thereto) is no longer in the best
interest of Certificateholders. Upon notice of the occurrence of either of the
events described in the preceding sentence, the Trustee shall notify all
Certificate Owners, through the Clearing Agency, of the occurrence of the event
and of the availability of Definitive Certificates to such Certificate Owners
requesting the same. Upon surrender to the Trustee of the Book-Entry
Certificates by the Clearing Agency, accompanied by registration instructions
from the Clearing Agency for registration, the Trustee shall execute,
authenticate and deliver the Definitive Certificates. None of the Depositor or
the Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates, all references
herein to obligations imposed upon or to be performed by the Clearing Agency
shall be deemed to be imposed upon and performed by the Trustee, to the extent
applicable with respect to such Definitive Certificates, and the Trustee shall
recognize the Holders of Definitive Certificates as Certificateholders
hereunder.
(b) Distributions of principal and interest on the Definitive
Certificates shall be made by the Trustee directly to holders of Definitive
Certificates in accordance with the procedures set forth in this Agreement.
ARTICLE IV.
ADVANCES
SECTION 4.1. P&I ADVANCES BY MASTER SERVICER.
(a) On or before 1:00 p.m., New York City time, on each P&I
Advance Date, the Master Servicer shall, subject to Section 4.4, either (i)
deposit into the Distribution Account (or, to the extent made to cover unpaid
Servicing Fees, in the Collection Account) from its own funds an amount equal to
the aggregate amount of P&I Advances, if any, to be made in respect of the
related Distribution Date, (ii) apply amounts held in the Collection Account for
future distribution to Certificateholders in subsequent months in discharge of
any such obligation to make P&I Advances, or (iii) make P&I Advances in the form
of any combination of (i) and (ii) aggregating the total amount of P&I Advances
to be made, provided that, if Late Collections of the delinquent principal and
interest payments for which P&I Advances are to be made for the related
Distribution Date, are on deposit in the Collection Account and available to
make such P&I Advances, the Master Servicer shall utilize such Late Collections
to make such P&I Advances pursuant to clause (ii) above. Any amounts held in the
Collection Account for future distribution and so used to make P&I Advances
shall be appropriately reflected in the Master Servicer's records and advanced
by the Master Servicer by deposit in the Collection Account on or before the
next succeeding Determination Date (to the extent not previously replaced
through the deposit of Late Collections of the delinquent principal and interest
in respect of which such P&I Advances were
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made). If, as of 3:00 p.m., New York City time, on any P&I Advance Date, the
Master Servicer shall not have made any P&I Advance required to be made on such
date pursuant to this Section 4.1(a) (and shall not have delivered to the
Trustee the requisite Officer's Certificate and documentation related to a
determination of nonrecoverability of a P&I Advance), then the Trustee shall
provide notice of such failure to a Servicing Officer of the Master Servicer by
facsimile transmission sent to telecopy no. (▇▇▇) ▇▇▇-▇▇▇▇ (or such alternative
number provided by the Master Servicer to the Trustee in writing) and by
telephone at telephone no. (▇▇▇) ▇▇▇-▇▇▇▇ (or such alternative number provided
by the Master Servicer to the Trustee in writing) as soon as possible, but in
any event before 5:00 p.m., New York City time, on such day.
(b) The aggregate amount of P&I Advances to be made by the
Master Servicer in respect of the Mortgage Loans (including without limitation
Balloon Mortgage Loans delinquent as to their respective Balloon Payments and
REO Mortgage Loans) for any Distribution Date shall equal, subject to Section
4.4 below, the aggregate of all Monthly Payments (other than Balloon Payments)
and any Assumed Monthly Payments, in each case net of any related Workout Fee,
that were due or deemed due, as the case may be, in respect thereof on their
respective Due Dates during the related Collection Period and that were not paid
by or on behalf of the related Mortgagors or otherwise collected as of the close
of business on the last day of the related Collection Period (or otherwise
offset as provided in Section 4.1(a) by amounts held in the Collection Account
for future distribution to Certificateholders); provided that, if an Appraisal
Reduction has occurred (and for so long as it exists) with respect to any
Required Appraisal Loan, then, in the event of subsequent delinquencies thereon,
the amount of the P&I Advance in respect of such Required Appraisal Loan for the
related Distribution Date shall be reduced to an amount equal to the product of
(i) the amount of the P&I Advance for such Required Appraisal Loan for such
Distribution Date without regard to this proviso, multiplied by (ii) a fraction,
expressed as a percentage, the numerator of which is equal to the Stated
Principal Balance of such Required Appraisal Loan immediately prior to such
Distribution Date, net of the related Appraisal Reduction, if any, and the
denominator of which is equal to the Stated Principal Balance of such Required
Appraisal Loan immediately prior to such Distribution Date. In addition, and
without duplication, for so long as the most subordinate Class of Certificates
is not rated by the Rating Agencies, the Master Servicer shall make only one P&I
Advance in respect of each Mortgage Loan for the benefit of such Class then
outstanding (the amount of such Advance to be reduced by the amount otherwise
payable to such Class) unless the related defaulted Monthly Payment is cured
prior to the following Due Date on any Mortgage Loan. The amount to be advanced
by the Master Servicer or Trustee in respect of any Mortgage Loan on any
Distribution Date will be reduced by the greater of the reduction in respect of
any Appraisal Reduction and the reduction described in the preceding sentence.
Notwithstanding the foregoing, the Master Servicer will not be required to
advance Default Interest, Excess Interest or prepayment or yield maintenance
premiums.
SECTION 4.2. SERVICING ADVANCES.
(a) The Master Servicer, the Special Servicer and the Trustee
shall each make Servicing Advances to the extent provided in this Agreement,
except to the extent that the Master Servicer, the Special Servicer or the
Trustee determines, as applicable, in accordance with Section 4.4 below, that
any such Servicing Advance would be a Nonrecoverable Advance. Such determination
shall be conclusive and binding on the Trustee and the Certificateholders.
(b) No more frequently than once per calendar month, the
Special Servicer may require the Master Servicer, and the Master Servicer shall
be obligated, subject to the second following paragraph, to reimburse the
Special Servicer for any Servicing Advances made by but not previously
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reimbursed to the Special Servicer, and to pay the Special Servicer interest
thereon at the Advance Rate from the date the advance was made to, but not
including, the date of reimbursement. Such reimbursement and any accompanying
payment of interest shall be made within ten (10) days of the request therefor
by wire transfer of immediately available funds to an account designated by the
Special Servicer. Upon the Master Servicer's reimbursement to the Special
Servicer of any Servicing Advance and payment to the Special Servicer of
interest thereon, all in accordance with this Section 4.2(b), the Master
Servicer shall for all purposes of this Agreement be deemed to have made such
Servicing Advance at the same time as the Special Servicer originally made such
Servicing Advance, and accordingly, the Master Servicer shall be entitled to
reimbursement for such Servicing Advance, together with interest thereon at the
Advance Rate, at the same time, in the same manner and to the same extent as the
Master Servicer would otherwise have been entitled if it had actually made such
Servicing Advance.
Notwithstanding anything to the contrary contained in this
Agreement, if the Special Servicer is required under this Agreement to make any
Servicing Advance but does not desire to do so, the Special Servicer may, in its
sole discretion, request that the Master Servicer make such Servicing Advance,
such request to be made in writing and in a timely manner that does not
materially and adversely affect the interests of any Certificateholder and to be
accompanied by such additional information regarding the circumstances
surrounding such Servicing Advance as the Master Servicer may reasonably
request. Subject to the following paragraph, the Master Servicer shall have the
obligation to make any such Servicing Advance that it is requested by the
Special Servicer to make within ten (10) days of the Master Servicer's receipt
of such request. The Special Servicer shall be relieved of any obligations with
respect to a Servicing Advance that it requests the Master Servicer to make
(regardless of whether or not the Master Servicer shall make such Advance). The
Master Servicer shall be entitled to reimbursement for any Servicing Advance
made by it at the direction of the Special Servicer, together with Advance
Interest thereon, at the same time, in the same manner and to the same extent as
the Master Servicer is entitled with respect to any other Servicing Advance made
thereby.
Notwithstanding the foregoing provisions of this Section 4.2(b),
the Master Servicer shall not be required to make at the Special Servicer's
direction, or to reimburse the Special Servicer for, any Servicing Advance if
the Master Servicer determines (in its good faith and reasonable judgment) that
the Servicing Advance which the Special Servicer is requesting the Master
Servicer to make or to reimburse to the Special Servicer hereunder, although not
characterized by the Special Servicer as a Nonrecoverable Servicing Advance, is
or would be, if made, a Nonrecoverable Servicing Advance. The Master Servicer
shall notify the Special Servicer in writing of such determination. Such notice
shall not obligate the Special Servicer to make any such proposed Servicing
Advance. The Special Servicer shall promptly provide the Master Servicer with
any information that comes into its possession that constitutes evidence that
any future Advances made with respect to any Mortgage Loan or REO Property would
be Nonrecoverable Advances.
SECTION 4.3. ADVANCES BY TRUSTEE.
(a) To the extent that the Master Servicer fails to make a P&I
Advance by 11:00 a.m. on the Business Day following the related P&I Advance Date
(other than a P&I Advance that the Master Servicer determines is a
Nonrecoverable Advance), the Trustee shall make such P&I Advance unless the
Trustee determines that such P&I Advance, if made, would be a Nonrecoverable
Advance. To the extent that the Trustee is required hereunder to make P&I
Advances, it shall deposit the amount thereof in the Distribution Account (or,
to the extent made to cover unpaid Servicing Fees, in the Collection Account) on
the relevant Distribution Date.
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(b) Reserved.
(c) To the extent that the Master Servicer or Special Servicer
fails to make a Servicing Advance by the fifteenth day after such Servicing
Advance is required to be made (other than a Servicing Advance that the Master
Servicer or Special Servicer determines is or would be a Nonrecoverable
Advance), if the Trustee has actual knowledge of such failure, the Trustee will
be required to give the defaulting party notice of such failure and, if such
failure continues for three (3) more Business Days, the Trustee shall make such
Servicing Advance unless the Trustee determines that such Servicing Advance, if
made, would be a Nonrecoverable Advance.
(d) Reserved.
SECTION 4.4. EVIDENCE OF NONRECOVERABILITY. Notwithstanding
anything herein to the contrary, no Advance shall be required to be made
hereunder if such Advance would, if made, constitute a Nonrecoverable Advance.
In addition, Nonrecoverable Advances shall be reimbursable pursuant to Section
5.2 out of general collections on the Mortgage Loans and REO Properties on
deposit in the Collection Account. The determination by the Master Servicer, the
Special Servicer or, if applicable, the Trustee, that it has made a
Nonrecoverable Advance or that any proposed Advance, if made, would constitute a
Nonrecoverable Advance, shall be evidenced by an Officer's Certificate delivered
promptly (and, in any event, in the case of a proposed P&I Advance to be made by
the Master Servicer, no less than one Business Day prior to the related P&I
Advance Date) to the Trustee (or, if applicable, retained thereby) and the
Depositor, setting forth the basis for such determination, together with (if
such determination is prior to the liquidation of the related Mortgage Loan or
REO Property) a copy of an Appraisal or internal evaluation of the related
Mortgaged Property or REO Property, as the case may be, which shall have been
performed within the twelve months preceding such determination, and further
accompanied by any other information that the Master Servicer or the Special
Servicer may have obtained and that supports such determination. If such an
Appraisal or internal evaluation shall not have been required and performed
pursuant to the terms of this Agreement, the Master Servicer or the Special
Servicer, as the case may be, may, subject to its reasonable and good faith
determination that such Appraisal will demonstrate the nonrecoverability of the
related Advance, obtain an Appraisal for such purpose at the expense of the
Trust payable out of the Collection Account. The Trustee shall be entitled to
rely on any determination of nonrecoverability that may have been made by the
Master Servicer or the Special Servicer with respect to a particular Advance,
and the Master Servicer shall be entitled to rely on any determination of
nonrecoverability that may have been made by the Special Servicer with respect
to a particular Advance and shall have no obligation to make a separate
determination of recoverability.
SECTION 4.5. ADVANCE INTEREST. The Master Servicer, the Special
Servicer and the Trustee shall each be entitled to receive interest at the
Advance Rate in effect from time to time, accrued on the amount of each Advance
made thereby (out of its own funds) for so long as such Advance is outstanding,
payable: first, out of Default Interest received on the Mortgage Loan
(including, without limitation, an REO Mortgage Loan as to which such P&I
Advance was made) or second, if such amounts are insufficient, out of general
collections on the Mortgage Loans and REO Properties in the Collection Account.
SECTION 4.6. RESERVED.
SECTION 4.7. RESERVED.
SECTION 4.8. RESERVED.
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ARTICLE V.
COLLECTION ACCOUNT; DISTRIBUTION ACCOUNT;
CERTAIN TRUSTEE REPORTS
SECTION 5.1. COLLECTION ACCOUNT.
(a) The Master Servicer shall open, on or prior to the Closing
Date, and shall thereafter maintain a segregated account (the "COLLECTION
ACCOUNT") solely with respect to this Agreement, entitled "AMRESCO Services,
L.P., as Master Servicer for Norwest Bank Minnesota, National Association, as
Trustee for the Holders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1999-FNV1, Collection Account." The Collection
Account shall be an Eligible Account.
(b) On or prior to the date the Master Servicer shall first
deposit funds in the Collection Account, the Master Servicer shall give to the
Trustee prior written notice of the name and address of the depository
institution at which the Collection Account is maintained and the account number
of the Collection Account. The Master Servicer shall take such actions as are
necessary to cause the depository institution holding the Collection Account to
hold such account in the name of the Master Servicer as provided in Section
5.1(a), subject to the Master Servicer's right to direct payments and
investments and its rights of withdrawal under this Agreement.
(c) The Master Servicer shall deposit into the Collection
Account on the Business Day following receipt the following amounts received or
paid by it, other than in respect of interest and principal on the Mortgage
Loans due on or before the Cut-off Date which shall be remitted to the
applicable Seller (provided that the Master Servicer may retain amounts
otherwise payable to the Master Servicer as provided in Section 5.2(b) rather
than deposit them into the Collection Account):
(i) Principal: all payments on account of principal,
including, without limitation, the principal component of Monthly
Payments, any late payments in respect thereof and any Principal
Prepayments, on the Mortgage Loans;
(ii) Interest: all payments on account of interest,
including, without limitation, the interest component of Monthly
Payments, any late payments in respect thereof and any Default Interest
on the Mortgage Loans but excluding any Excess Interest (which, if and
as received by the Master Servicer or Special Servicer, shall be
remitted by the Master Servicer or the Special Servicer to the Trustee
for deposit to the Excess Interest Distribution Account);
(iii) Liquidation Proceeds: all Liquidation Proceeds with
respect to the Mortgage Loans, including, without limitation, REO
Mortgage Loans;
(iv) Insurance Proceeds and Condemnation Proceeds: all
Insurance Proceeds and Condemnation Proceeds with respect to any
Mortgaged Property or REO Property (other than any such proceeds to be
applied to the restoration or repair of such property or released to the
related Mortgagor in accordance with applicable law, the terms of the
related Mortgage Loan or the Servicing Standard, in which case such
proceeds shall be deposited by the Master Servicer into an escrow
account or released to the related Mortgagor, as the case may be, and
not deposited in the Collection Account);
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(v) Assumption Fees, Modification Fees, Late Fees and
Prepayment Premiums: all assumption fees, modification fees, Late Fees
and Prepayment Premiums with respect to the Mortgage Loans;
(vi) REO Income: all REO Income (net of any expenses and
fees paid therefrom by the related property manager) in respect of any
REO Properties;
(vii) Investment Losses: any amounts required to be
deposited by the Master Servicer pursuant to Section 5.1(e) and Section
5.3.2 in connection with losses realized on Eligible Investments with
respect to funds held in the Collection Account or Interest Reserve
Account;
(viii) P&I Advances: that portion of each P&I Advance that
represents the Master Servicing Fee and, if applicable, the Special
Servicing Fee;
(ix) Repurchase Proceeds and Substitution Shortfall
Amounts: All Repurchase Proceeds and payments of Substitution Shortfall
Amounts with respect to the Mortgage Loans, including, without
limitation, the REO Mortgage Loans; and
(x) Other: all other amounts required to be deposited in
the Collection Account pursuant to this Agreement.
If the Master Servicer deposits in the Collection Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Collection Account, any provision herein to the contrary
notwithstanding.
(d) Upon its receipt of any of the amounts described in
clauses (i) through (vi) of Section 5.1(c) with respect to any Mortgage Loan or
REO Property, the Special Servicer shall promptly, but in no event later than
the Business Day after receipt, remit such amounts to the Master Servicer for
deposit into the Collection Account in accordance with Section 5.1(c), unless
the Special Servicer determines, consistent with the Servicing Standard, that a
particular item should not be deposited because of a restrictive endorsement or
other appropriate reason. With respect to any such amounts paid by check to the
order of the Special Servicer, the Special Servicer shall endorse such check to
the order of the Master Servicer and shall deliver promptly, but in no event
later than the Business Day after receipt, any such check to the Master Servicer
by overnight courier, unless the Special Servicer determines, consistent with
the Servicing Standard, that a particular item cannot be so endorsed and
delivered because of a restrictive endorsement or other appropriate reason. The
Master Servicer shall promptly inform the Special Servicer of the name, account
number, location and other necessary information concerning the Collection
Account in order to permit the Special Servicer to make deposits therein.
(e) Funds in the Collection Account may be invested and, if
invested, shall be invested by, and at the risk of, the Master Servicer in
Eligible Investments selected by the Master Servicer which shall mature, unless
payable on demand, not later than the Business Day immediately preceding the
next Master Servicer Remittance Date, and any such Eligible Investment shall not
be sold or disposed of prior to its maturity unless payable on demand. All such
Eligible Investments shall be made in the name of "AMRESCO Services, L.P., in
trust for Norwest Bank Minnesota, National Association, as Trustee for the
Holders of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1999-FNV1." None of the Depositor, the Mortgagors or the
Trustee shall be liable for any loss incurred on such Eligible Investments.
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An amount equal to all income and gain realized from any such
investment (to the extent not needed to offset losses from other investments)
shall be paid to the Master Servicer as additional servicing compensation and
shall be subject to its withdrawal at any time from time to time. The amount of
any losses incurred in respect of any such investments shall be for the account
of the Master Servicer which shall deposit the amount of such loss (to the
extent not offset by income from other investments) in the Collection Account
out of its own funds no later than the next Master Servicer Remittance Date.
Except as expressly provided otherwise in this Agreement, if any
default occurs in the making of a payment due under any Eligible Investment, or
if a default occurs in any other performance required under any Eligible
Investment, the Trustee or the Master Servicer may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings; provided, however, that if the
Master Servicer shall have deposited in the Collection Account an amount equal
to all amounts due under any such Eligible Investment (net of anticipated income
or earnings thereon that would have been payable to the Master Servicer as
additional servicing compensation), the Master Servicer shall have the sole
right to enforce such payment or performance.
(f) Certain of the Mortgage Loans may provide for payment by
the Mortgagor to the Master Servicer of amounts to be used for payment of Escrow
Payments for the account of the Mortgagor. The Master Servicer shall deal with
these amounts in accordance with the Servicing Standard, applicable law and the
terms of the related Mortgage Loans.
SECTION 5.2. APPLICATION OF FUNDS IN THE COLLECTION ACCOUNT.
(a) Monthly, on each Master Servicer Remittance Date, the
Master Servicer shall withdraw from the Collection Account and deliver to the
Trustee for deposit in the Distribution Account all amounts then on deposit in
the Collection Account that represent payments and other collections on or in
respect of the Mortgage Loans and any REO Properties that were received by the
Master Servicer or the Special Servicer through the end of the related
Collection Period, exclusive of any such payments and other collections that:
(i) constitute Monthly Payments due on a Due Date following the end of the
related Collection Period; (ii) are payable or reimbursable to any Person from
the Collection Account pursuant to clauses (i) through (xvi), inclusive, of
Section 5.2(b); and/or (iii) were deposited in the Collection Account in error.
The Trustee shall notify the Master Servicer (in a manner consistent with the
last sentence of Section 4.1(a)) if any such remittance is not received by 3:00
p.m., New York City time, on any Master Servicer Remittance Date. In addition,
on each P&I Advance Date, the Master Servicer is authorized (or, to the extent
provided in Section 4.1, required) to apply certain amounts held in the
Collection Account for future distribution to Certificateholders in subsequent
months and certain Late Collections, all as more particularly specified in
Section 4.1, to make required P&I Advances on such date.
(b) The Master Servicer may, from time to time, also make
withdrawals from the Collection Account for any of the following purposes:
(i) Servicing Fees: to pay to itself unpaid Master
Servicing Fees and to the Special Servicer unpaid Special Servicing
Fees, in each case earned thereby in respect of each Mortgage Loan,
including, without limitation, each REO Mortgage Loan, the Master
Servicer's and the Special Servicer's respective rights to payment
pursuant to this clause (i) being limited to amounts received, in each
case, in respect of such Mortgage Loan that is allocable as a recovery
of interest thereon or advanced as the interest portion of a P&I Advance
with respect to such Mortgage Loan;
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(ii) Workout Fees and Liquidation Fees: to pay to the
Special Servicer earned and unpaid Workout Fees and Liquidation Fees to
which it is entitled pursuant to, and from the sources contemplated by,
Section 8.10(b);
(iii) P&I Advances: to reimburse each of the Trustee and
the Master Servicer, in that order, for ▇▇▇▇▇▇▇▇▇▇▇▇ ▇&▇ Advances made
by each such Person, the Trustee's and Master Servicer's respective
rights to be reimbursed pursuant to this clause (iii) being limited to
amounts received that represent Late Collections of interest on and
principal of the particular Mortgage Loans, including, without
limitation, REO Mortgage Loans, with respect to which such P&I Advances
were made (in each case net of related Workout Fees);
(iv) Servicing Advances: to reimburse each of the Trustee,
the Master Servicer and the Special Servicer, in that order, for
unreimbursed Servicing Advances made by each such Person, the Trustee's,
the Master Servicer's and the Special Servicer's respective rights to be
reimbursed pursuant to this clause (iv) being limited to amounts
received that represent Late Collections of interest on and principal of
the particular Mortgage Loans, including, without limitation, REO
Mortgage Loans, with respect to which such Servicing Advances were made
with respect to any Mortgage Loan or REO Property;
(v) Nonrecoverable Advances: to reimburse the Trustee, the
Master Servicer and the Special Servicer, in that order, out of general
collections on the Mortgage Loans and REO Properties, for Nonrecoverable
Advances made by each such Person;
(vi) Advance Interest: to pay the Trustee, the Master
Servicer and the Special Servicer, in that order, any unpaid Advance
Interest due and payable thereto, the Trustee's, the Master Servicer's
and the Special Servicer's respective rights to payment pursuant to this
clause (vi) being limited to Default Interest collected in respect of
the Mortgage Loans, including without limitation any REO Mortgage Loan,
as to which the related Advance was made;
(vii) More Advance Interest: at or following such time as
it reimburses itself, the Special Servicer or the Trustee, as
applicable, for any unreimbursed Advance pursuant to clause (iii), (iv)
or (v) above or pursuant to Section 8.3, and insofar as payment has not
already been made pursuant to clause (vi) above, to pay itself, the
Special Servicer or the Trustee, as the case may be, out of general
collections on the Mortgage Loans and REO Properties, any related
Advance Interest accrued and payable on such Advance;
(viii) Additional Master Servicing and Special Servicing
Compensation: to pay to each of itself and the Special Servicer all
amounts deposited in the Collection Account from time to time that
constitute Additional Master Servicing Compensation and Additional
Special Servicing Compensation, respectively;
(ix) Certain Environmental Costs: to pay out of general
collections on the Mortgage Loans and REO Properties, any costs and
expenses incurred by the Trust pursuant to Section 8.7(c);
(x) Reserved;
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(xi) REO Extensions: to pay, out of general collections on
the Mortgage Loans and REO Properties, the cost of obtaining any REO
Extension contemplated by Section 8.19(a) in respect of any REO
Property;
(xii) General Reimbursements and Indemnities: to pay
itself, the Special Servicer, the Trustee, or any of their respective
directors, officers, employees and agents, as the case may be, out of
general collections on the Mortgage Loans and REO Properties, pro rata
based on their respective entitlements, any amounts payable to any such
Person pursuant to any of Sections 4.8, 7.11, 8.15, 8.26 and 8.27;
(xiii) Legal Advice: to pay, out of general collections on
the Mortgage Loans and REO Properties, for (A) the cost of the Opinions
of Counsel contemplated by Sections 8.7(b)(ii), 8.19(a) and 13.13, (B)
the cost of any other Opinion of Counsel contemplated by this Agreement
which is specifically identified as an expense of the Trust and (C) the
cost of the advice of counsel contemplated by Section 8.20(a);
(xiv) Deleted Mortgage Loans: to any Seller or other
appropriate Person, with respect to each Mortgage Loan or REO Property,
if any, previously purchased or replaced by such Person pursuant to or
as contemplated by this Agreement, all amounts received on such Deleted
Mortgage Loan subsequent to the date of purchase;
(xv) Taxes: to pay any and all federal, state and local
taxes imposed on REMIC I, REMIC II or REMIC III or on the assets or
transactions of any such REMIC Pool, together with all incidental costs
and expenses, and any and all reasonable expenses relating to tax
audits, if and to the extent that either (A) none of the Trustee, the
Master Servicer or the Special Servicer is liable therefor pursuant to
Section 12.1(k), or (B) any such Person that may be so liable (including
any Holder of a Class R-I, Class R-II or Class R-III Certificate) has
failed to make the required payment;
(xvi) Other Expenses of Trust: to pay to the Person
entitled thereto any amounts specified herein to be expenses of the
Trust, the payment of which is not more specifically provided for in any
prior clause of this Section 5.2(b);
(xvii) Correction of Errors: to withdraw funds deposited
in the Collection Account in error; and
(xviii) Clear and Terminate: to clear and terminate the
Collection Account with a termination of the Trust pursuant to Section
10.1.
The Master Servicer shall pay to or at the direction of each of
the Depositor, the Special Servicer and the Trustee from the Collection Account
amounts permitted to be paid therefrom to such Person (or to third parties in
respect of matters that are such Person's responsibility or under such Person's
control) promptly upon receipt of a certificate of, as applicable, an Authorized
Officer of the Depositor, a Special Servicing Officer of the Special Servicer or
a Responsible Officer of the Trustee, describing the item and amount to which
the Depositor, the Special Servicer or the Trustee (or such third party), as the
case may be, is entitled. The Master Servicer may rely conclusively on any such
certificate and shall have no duty to re-calculate the amounts stated therein.
The Master Servicer shall keep and maintain a separate accounting
for each Mortgage Loan for the purpose of justifying any withdrawal from the
Collection Account.
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SECTION 5.3. DISTRIBUTION ACCOUNT; EXCESS INTEREST DISTRIBUTION
ACCOUNT; INTEREST RESERVE ACCOUNT.
(a) The Trustee shall establish, on or prior to the Closing Date,
and thereafter maintain in the name of the Trustee, a segregated account (the
"DISTRIBUTION ACCOUNT") solely with respect to this Agreement, to be held in
trust for the benefit of the Holders of interests in the Trust until disbursed
pursuant to the terms of this Agreement, entitled: "Norwest Bank Minnesota,
National Association, as trustee, in trust for the benefit of the Holders of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., Commercial Mortgage Pass-Through Certificates,
Series 1999-FNV1, Distribution Account." The Distribution Account shall be an
Eligible Account.
(b) The Trustee shall deposit into the Distribution Account on
the Business Day received all moneys remitted by the Master Servicer pursuant to
Section 5.2(a) of this Agreement, together with (i) all P&I Advances and
Compensating Interest Payments made by the Master Servicer and (ii) any
reimbursements or indemnifications of the Trust made by any party hereto or any
other Person. Funds in the Distribution Account shall not be invested. The
Distribution Account shall be held separate and apart from and shall not be
commingled with any other monies of or held in trust by the Trustee, including,
without limitation, other monies of the Trustee held under this Agreement.
(c) The Trustee shall make withdrawals from the Distribution
Account only for the following purposes:
(i) to withdraw amounts deposited in the Distribution
Account in error and pay such amounts to the Persons entitled thereto;
(ii) to pay itself unpaid Trustee Fees and any other
amounts owed to it pursuant to Section 7.12 hereof;
(iii) to make distributions to the Certificateholders
pursuant to Section 6.4; and
(iv) to clear and terminate the Distribution Account in
connection with a termination of the Trust pursuant to Section 10.1.
SECTION 5.3.1.EXCESS INTEREST DISTRIBUTION ACCOUNT.
(a) The Trustee shall establish, on or prior to the Closing Date,
and thereafter maintain in the name of the Trustee, a segregated account (the
"EXCESS INTEREST DISTRIBUTION ACCOUNT") solely with respect to this Agreement,
to be held in trust for the benefit of the Holders of beneficial interests in
the grantor trust described in Section 12.1(b) hereof, until disbursed pursuant
to the terms of this Agreement, entitled "Norwest Bank Minnesota, National
Association, as trustee, in trust for the benefit of the Holders of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series
1999-FNV1 Excess Interest Distribution Account." The Excess Interest
Distribution Account shall be an Eligible Account.
(b) The Trustee shall deposit into the Excess Interest
Distribution Account on the Business Day received all moneys received by it from
the Master Servicer or Special Servicer as Excess Interest. The Trustee shall
hold uninvested any funds in the Excess Interest Distribution Account, and shall
hold the Excess Interest Distribution Account separate and apart from, and shall
not commingle
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any monies thereof with, any other monies of or held in trust by the Trustee,
including, without limitation, other monies of the Trustee held under this
Agreement.
(c) The Trustee shall make withdrawals from the Excess Interest
Distribution Account only for the following purposes:
(i) to withdraw amounts deposited in the Excess Interest
Distribution Account in error and to pay such amounts to the Persons
entitled thereto;
(ii) to make distributions to the Class O
Certificateholders pursuant to Section 6.4.1, and
(iii) to clear and terminate the Excess Interest
Distribution Account in connection with a termination of the Trust
pursuant to Section 10.1.
SECTION 5.3.2.INTEREST RESERVE ACCOUNT.
(i) The Master Servicer shall establish, on or prior to the
Closing Date, and thereafter maintain in the name of the Master Servicer on
behalf of the Trustee, a segregated account (the "INTEREST RESERVE ACCOUNT")
solely with respect to this Agreement, to be held in trust for the benefit of
the Holders of the Certificates until disbursed pursuant to the terms of this
Agreement, entitled "AMRESCO Services, L.P., on behalf of Norwest Bank
Minnesota, National Association, as trustee, in trust for the benefit of the
Holders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 1999-FNV1 Interest Reserve Account." The Interest Reserve
Account shall be an Eligible Account.
(ii) On each Report Date occurring in (i) January of each
calendar year that is not a leap year and (ii) February of each calendar year,
the Master Servicer shall calculate the Withheld Amount and notify the Trustee
of such Withheld Amount. On each such Master Servicer Remittance Date, the
Master Servicer shall withdraw from the Collection Account and deposit in the
Interest Reserve Account an amount equal to the aggregate of the Withheld
Amounts. If the Master Servicer shall deposit in the Interest Reserve Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Interest Reserve Account, any provision herein to the
contrary notwithstanding. On or prior to the Master Servicer Remittance Date in
March of each calendar year, the Master Servicer shall transfer to the Trustee
for deposit into the Distribution Account the aggregate of all Withheld Amounts
on deposit in the Interest Reserve Account.
(iii) The Master Servicer may, from time to time, make
withdrawals from the Interest Reserve Account to pay itself, as additional
servicing compensation in accordance with Section 8.10, net interest and
investment income earned in respect of amounts in the Interest Reserve Account.
(iv) Funds in the Interest Reserve Account may be invested and,
if invested, shall be invested at the direction of, and at the risk of, the
Master Servicer in Eligible Investments selected by the Master Servicer which
shall mature, unless payable on demand, not later than the Business Day
immediately preceding the date that such funds are required to be transferred to
the Distribution Account, and any such Eligible Investment shall not be sold or
disposed of prior to its maturity unless payable on demand. All such Eligible
Investments shall be made in the name of "AMRESCO Services, L.P., in trust for
Norwest Bank Minnesota, National Association, as Trustee for the Holders of the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., Commercial Mortgage Pass-Through Certificates,
Series 1999-FNV1."
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(v) An amount equal to all income and gain realized from any such
investment (to the extent not needed to offset losses from other investments)
shall be paid to the Master Servicer as additional servicing compensation and
shall be subject to its withdrawal at any time from time to time. The amount of
any losses incurred in respect of any such investments shall be for the account
of the Master Servicer which shall deposit the amount of such loss (to the
extent not offset by income from other investments) in the Collection Account
out of its own funds no later than the next succeeding Master Servicer
Remittance Date.
SECTION 5.4. TRUSTEE REPORTS; ACCESS TO INFORMATION.
(a) Based on (and to the extent of the information contained in)
the Master Servicer Remittance Report and the report pursuant to Section 8.14(a)
provided to the Trustee by the Master Servicer, which shall be delivered no
later than 2:00 p.m. New York time on the related Report Date, on each
Distribution Date, the Trustee shall provide or make available to each
Certificateholder, the Rating Agencies, the Master Servicer, the Special
Servicer, the Underwriters, the Depositor, FINOVA and the Operating Adviser (or
if no Operating Adviser has been elected, then the Majority Certificateholder of
the Controlling Class), and, upon request and written certification as to its
beneficial ownership interest in the Book-Entry Certificates, to any Certificate
Owner a Monthly Certificateholder Report (substantially in the form of Exhibit
G) which includes information regarding the Mortgage Loans as of the end of the
related Collection Period, and which report will also contain substantially the
categories of information regarding the Mortgage Loans set forth in Exhibit I.
The Trustee shall be entitled, in the absence of manifest error, to conclusively
rely on any such information provided to it by the Master Servicer or the
Special Servicer and shall have no obligation to verify any such information.
(b) The Trustee shall provide or cause to be provided to the
Depositor, the Master Servicer and the Special Servicer, and to the OTS, the
FDIC, and any other federal or state banking or insurance regulatory authority
that may exercise authority over any Certificateholder, access to the Mortgage
Files and any other documentation regarding the Mortgage Loans and the Trust
Fund within its control that may be required by this Agreement or by applicable
law. Such access shall be afforded without charge but only upon reasonable prior
written request and during normal business hours at the offices of the Trustee
designated by it.
(c) Within a reasonable period of time after the end of each
calendar year, the Trustee shall send to each Person who at any time during the
calendar year was a Certificateholder of record, a report summarizing the items
specified in clauses (i), (ii) and (x) of the definition of Monthly
Certificateholder Report and provided to Certificateholders pursuant to this
Section 5.4, aggregated for such calendar year or the applicable portion thereof
during which such Person was a Certificateholder, together with such other
customary information as the Trustee ▇▇▇▇▇ ▇▇▇ be necessary or desirable for
such Certificateholders to prepare their federal income tax returns. The
obligations of the Trustee under this Section 5.4(c) shall be deemed to have
been satisfied to the extent that substantially comparable information has been
provided or made available by the Trustee pursuant to the requirements of the
Code.
(d) Upon written request, the Trustee shall send the reports
described in Section 5.4(a) to any Certificate Owner (subject to Section 5.4(g))
or Certificateholder by first class mail at no cost to such Certificate Owner or
Certificateholder. In addition, the Trustee shall make the reports described in
Section 5.4(a) available through its website, initially located at
▇▇▇.▇▇▇▇▇▇▇.▇▇▇/▇▇▇▇ (the "Trustee's Website"), electronic bulletin board and
its fax-on demand service. The Trustee's electronic bulletin board may be
initially accessed by calling (▇▇▇) ▇▇▇-▇▇▇▇, and the Trustee's fax-on demand
71
service may be initially accessed by calling (▇▇▇) ▇▇▇-▇▇▇▇. For assistance with
the above-mentioned Trustee services, Certificateholders or any interested party
may initially call (▇▇▇) ▇▇▇-▇▇▇▇. In addition, the Trustee may also make
Mortgage Loan information as presented in the CSSA loan setup file format, the
CSSA loan periodic update file, the CSSA property file and the Servicer Reports
available each month to any Certificateholder, any Certificate Owner, the Rating
Agencies and any other interested party via the Trustee's Website or, if
requested by a Certificateholder or Certificate Owner in writing, by first class
mail. In addition, the Trustee will make available, as a convenience for
interested parties (and not in the furtherance of the distribution of the
Prospectus Supplement under the securities laws) this Agreement and the
Prospectus Supplement via the Trustee's Website. The Trustee shall not be deemed
to have made any representations or warranties as to the accuracy or
completeness of such documents and will assume no responsibility therefor. In
addition, the Trustee may disclaim responsibility for any information
distributed by it of which information the Trustee is not the original source.
In connection with providing access to the Trustee's Website or electronic
bulletin board, the Trustee may require registration and the acceptance of a
disclaimer. The Trustee shall not be liable for the dissemination of information
in accordance with this Agreement; provided that this sentence shall not in any
way limit the liability the Trustee may otherwise have in performance of its
duties hereunder.
(e) The Trustee shall make available at its Corporate Trust
Office, during normal business hours, upon reasonable advance written notice for
review by any Certificateholder, any Certificate Owner, any Prospective
Investor, the Underwriters, each Rating Agency, the Operating Adviser (or if no
Operating Adviser has been elected, then the Majority Certificateholder of the
Controlling Class) and the Depositor, originals or copies of, among other
things, the following items: (i) this Agreement, the Mortgage Loan Purchase
Agreements and any amendments thereto, to the extent such items are in the
Trustee's possession, (ii) all Monthly Certificateholder Reports and reports
pursuant to Section 5.4(a)(ii) delivered by the Trustee to Certificateholders
since the Closing Date and all Operating Statement Analyses, reports pursuant to
Section 8.14(a), and Master Servicer Remittance Reports received by the Trustee
from the Master Servicer since the Closing Date, (iii) all Officer's
Certificates delivered to the Trustee since the Closing Date pursuant to Section
8.12, (iv) all accountants' reports delivered to the Trustee since the Closing
Date pursuant to Section 8.13, (v) the most recent property inspection reports
in the possession of the Trustee in respect of each Mortgaged Property and REO
Property, (vi) the most recent Mortgaged Property/REO Property annual operating
statement and rent roll, if any, collected or otherwise obtained by or on behalf
of the Master Servicer or the Special Servicer and delivered to the Trustee,
(vii) any and all modifications, waivers and amendments of the terms of a
Mortgage Loan entered into by the Master Servicer and/or the Special Servicer
and delivered to the Trustee, (viii) any and all Officer's Certificates (and
attachments thereto) delivered to or retained by the Trustee to support any of
its, the Special Servicer's or the Master Servicer's determination that any
Advance was not or, if made, would not be, recoverable, (ix) any reports
delivered by the Special Servicer to the Trustee pursuant to Section 8.7(e), and
(x) copies of the Prospectus Supplement and the Memorandum, as such may have
been amended or supplemented from time to time and delivered to the Trustee.
Copies (or computer diskettes or other digital or electronic copies of such
information if reasonably available in lieu of paper copies) of any and all of
the foregoing items shall be made available by the Trustee upon request;
provided, however, that the Trustee shall be permitted to require payment by the
requesting party (other than the Depositor, the Underwriters, the Master
Servicer, the Special Servicer or either Rating Agency) of a sum sufficient to
cover the reasonable expenses actually incurred by the Trustee of providing
access or copies (including electronic or digital copies) of any such
information requested in accordance with the preceding sentence.
(f) The Trustee shall afford the Underwriters, the Rating
Agencies, the Depositor, the Master Servicer, the Special Servicer, the
Operating Adviser, any Certificateholder, any Certificate
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Owner and any Prospective Investor, upon reasonable notice and during normal
business hours, reasonable access to all relevant, non-attorney-client-
privileged records and documentation, including without limitation information
delivered by the Master Servicer or the Special Servicer to the Trustee
pursuant to Section 8.16, regarding the Mortgage Loans, any REO Properties and
all other relevant matters relating to this Agreement. Copies (or computer
diskettes or other digital or electronic copies of such information if
reasonably available in lieu of paper copies) of any and all of the foregoing
items shall be made available by the Trustee upon written request; provided,
however, that the Trustee shall be permitted to require payment by the
requesting party (other than the Depositor, the Master Servicer, the Special
Servicer, the Underwriters or either Rating Agency) of a sum sufficient to
cover the reasonable expenses actually incurred by the Trustee of providing
access or copies (including electronic or digital copies) of any such
information requested in accordance with the preceding sentence.
(g) In connection with providing access to or copies of the items
described in subsections (a), (d), (e), (f) and (h) of this Section 5.4, the
Trustee may require (a) in the case of Certificate Owners, a written
confirmation executed by the requesting Person, in form reasonably satisfactory
to the Trustee, generally to the effect that such Person is a beneficial holder
of Certificates, is requesting the information solely for use in evaluating such
Person's investment in the Certificates and will otherwise keep such information
confidential and (b) in the case of Prospective Investors, a written
confirmation executed by the requesting Person, in form reasonably satisfactory
to the Trustee, generally to the effect that such Person is a prospective
purchaser of a Certificate or a beneficial ownership interest therein, is
requesting the information solely for use in evaluating a possible investment in
Certificates and will otherwise keep such information confidential. The Trustee
shall be entitled to conclusively rely on any such certification without
independent investigation or inquiry. All Certificateholders, by the acceptance
of their Certificates, shall be deemed to have agreed to keep such information
confidential. Notwithstanding the foregoing provisions of this Section 5.4(g),
the Trustee shall have no responsibility for the accuracy, completeness or
sufficiency for any purpose of any information so made available or furnished by
it pursuant to subsections (d), (e) and (f) of this Section 5.4.
(h) On each Distribution Date, except as described below, the
Trustee shall provide or make available in electronic format (or, upon written
request, by first class mail) to each Certificateholder, each Prospective
Investor in a Certificate (upon request), each Certificate Owner (if known), the
Depositor, each Underwriter and each Rating Agency a copy of the Comparative
Financial Status Report, the Delinquent Loan Status Report, the Historical Loss
Estimate Report, the Historical Loan Modification Report, the REO Status Report
and a Watch List (indicating those Mortgage Loans that the Master Servicer has
determined are in jeopardy of becoming Specially Serviced Mortgage Loans)
(collectively, the "Servicer Reports") provided by the Master Servicer to the
Trustee pursuant to Section 8.14(c) and 8.14(e) on the Master Servicer
Remittance Date. The information that pertains to Specially Serviced Mortgage
Loans and REO Properties reflected in such reports shall be based solely upon
the reports delivered by the Special Servicer to the Master Servicer at least
two Business Days prior to the related Master Servicer Remittance Date. Absent
manifest error, (i) none of the Master Servicer, the Special Servicer or the
Trustee shall be responsible for the accuracy or completeness of any information
supplied to it by a Mortgagor or third party that is included in any reports,
statements, materials or information prepared or provided by the Master
Servicer, the Special Servicer or the Trustee, as applicable, (ii) the Trustee
shall not be responsible for the accuracy or completeness of any information
supplied to it by the Master Servicer or Special Servicer that is included in
any reports, statements, materials or information prepared or provided by the
Master Servicer or Special Servicer, as applicable, and (iii) the Trustee shall
be entitled to conclusively rely upon the Master Servicer's reports and the
Special Servicer's reports without any duty or obligation to recompute, verify
or re-evaluate any of the amounts or other information stated therein.
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The information contained in the reports in the preceding
paragraph of this Section 5.4(h) shall be made available to the Trustee and the
Rating Agencies electronically by the Master Servicer in the form of the
standard CSSA loan file and CSSA property file, and the Trustee will in lieu of
mailing such reports as described in such preceding paragraph make such reports
available electronically in such form to Certificateholders using the media
mutually agreed upon by the Trustee, each Underwriter and the Depositor;
provided, however, that the Trustee will continue to provide Certificateholders
with a written copy of such reports (upon written request) in the manner
described in such preceding paragraph.
The Trustee shall deliver a copy of each Operating Statement
Analysis report and NOI Adjustment Worksheet that it receives from the Master
Servicer and Special Servicer to the Depositor, each Underwriter and each Rating
Agency promptly after its receipt thereof. Upon written request, the Trustee
shall make such reports available to the Certificateholders and the Special
Servicer. Upon written request, the Trustee shall also make available to any
Certificate Owners and Prospective Investor in the Certificates any NOI
Adjustment Worksheet for a Mortgaged Property or REO Property in the possession
of the Trustee, subject to Section 5.4(g).
SECTION 5.5. TRUSTEE TAX REPORTS. The Trustee shall perform all
reporting and other tax compliance duties that are the responsibility of each
REMIC Pool and of the grantor trust under the Code, the REMIC Provisions, or
other compliance guidance issued by the Internal Revenue Service or any state or
local taxing authority. Consistent with this Agreement, the Trustee shall
provide (i) to the Internal Revenue Service or other Persons (including, but not
limited to, any Person that has transferred a Residual Certificate to a
Disqualified Organization or to an agent that has acquired a Residual
Certificate on behalf of a Disqualified Organization) such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Disqualified Organization and (ii) to the Certificateholders
such information or reports as are required by the Code or REMIC Provisions. The
Master Servicer shall on a timely basis provide the Trustee with such
information concerning the Mortgage Loans as is necessary for the preparation of
the tax or information returns or receipts of each REMIC Pool as the Trustee may
reasonably request from time to time. The Special Servicer is required to
provide to the Master Servicer all information in its possession with respect to
the Specially Serviced Mortgage Loans and REO Properties in order for the Master
Servicer to comply with its obligations under this Section 5.5. The Trustee
shall be entitled, in the absence of manifest error, to conclusively rely on any
such information provided to it by the Master Servicer or the Special Servicer
and shall have no obligation to verify any such information.
ARTICLE VI.
DISTRIBUTIONS
SECTION 6.1. DISTRIBUTIONS GENERALLY.
(a) All distributions made with respect to each Class on each
Distribution Date shall be allocated pro rata among the outstanding Certificates
in such Class based on their respective Percentage Interests. Except as
otherwise provided below, all such distributions with respect to each Class on
each Distribution Date shall be made to the Certificateholders of the respective
Class of record at the close of business on the related Record Date and shall be
made by wire transfer of immediately available funds to the account of any such
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided the Trustee with wiring
instructions on or
74
before the related Record Date (which wiring instructions may be in the form of
a standing order applicable to all subsequent Distribution Dates) or otherwise
by check mailed to the address of such Certificateholder as it appears in the
Certificate Register. The final distribution on each Certificate (determined
without regard to any possible future reimbursement of any Realized Loss or
Expense Loss previously allocated to such Certificate) will be made in like
manner, but only upon presentation and surrender of such Certificate at the
offices of the Certificate Registrar or such other location specified in the
notice to Certificateholders of such final distribution. Any distribution that
is to be made with respect to a Certificate in reimbursement of a Realized Loss
or Expense Loss previously allocated thereto, which reimbursement is to occur
after the date on which such Certificate is surrendered as contemplated by the
preceding sentence, will be made by check mailed to the address of the
Certificateholder that surrendered such Certificate at such address as last
appeared in the Certificate Registrar or to any other address of which the
Trustee was subsequently notified in writing.
(b) Each distribution with respect to a Book-Entry Certificate
shall be paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Participants in accordance with its normal procedures. Each Participant shall be
responsible for disbursing such distribution to the Certificate Owners that it
represents and to each Indirect Participant for which it acts as agent. Each
Participant and Indirect Participant shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor, the Master Servicer or the Special
Servicer shall have any responsibility therefor except as otherwise provided by
this Agreement or applicable law.
(c) The rights of the Certificateholders to receive distributions
from the proceeds of the Trust Fund in respect of their Certificates, and all
rights and interests of the Certificateholders in and to such distributions,
shall be as set forth in this Agreement. Neither the Holders of any Class of
Certificates nor any party hereto shall in any way be responsible or liable to
the Holders of any other Class of Certificates in respect of amounts properly
previously distributed on the Certificates. Distributions in reimbursement of
Realized Losses and Expense Losses previously allocated to a Class of
Certificates shall not constitute distributions of principal and shall not
result in a reduction of the related Class Principal Balance.
SECTION 6.2. REMIC I.
(a) On each Distribution Date, the Trustee shall be deemed to
apply the Available Distribution Amount (excluding any amounts attributable to
Prepayment Premiums) as is attributable to each Mortgage Loan for such date for
the following purposes and in the following order of priority:
(i) to pay interest to REMIC II in respect of each REMIC I
Regular Interest, up to an amount equal to, and pro rata in accordance
with, all Uncertificated Distributable Interest (excluding amounts
attributable to Prepayment Premiums) for each such REMIC I Regular
Interest for such Distribution Date;
(ii) to pay principal to REMIC II in respect of each REMIC
I Regular Interest, up to an amount equal to, and pro rata in accordance
with, the excess, if any, of the Uncertificated Principal Balance of
such REMIC I Regular Interest outstanding immediately prior to such
Distribution Date, over the Stated Principal Balance of the related
Mortgage Loan (including without limitation an REO Mortgage Loan or, if
applicable, a Qualifying Substitute Mortgage Loan) that will be
outstanding immediately following such Distribution Date;
75
(iii) to reimburse REMIC II for any Realized Losses and
Expense Losses previously deemed allocated to the various REMIC I
Regular Interests (with interest), up to an amount equal to, and pro
rata in accordance with, the Loss Reimbursement Amount for each such
REMIC I Regular Interest for such Distribution Date; and
(iv) to the Holders of the Class R-I Certificates that
portion, if any, of the Available Distribution Amount (excluding amounts
attributable to Prepayment Premiums) for such date that has not
otherwise been deemed paid to REMIC II in respect of the REMIC I Regular
Interests pursuant to this Section 6.2(a).
(b) On the Distribution Date occurring in (A) January of each
calendar year that is not a leap year and (B) February of each calendar year,
interest payments constituting the Withheld Amounts that would otherwise be
distributable pursuant to clause (a)(i) above shall be deposited in the Interest
Reserve Account by the Trustee in accordance with Section 5.3.2. On the
Distribution Date in March of each calendar year the Withheld Amounts deposited
in the Interest Reserve Account pursuant to Section 5.3.2 shall be included in
the funds distributable pursuant to clause (a)(i) above
(c) On each Distribution Date, the Trustee shall be deemed to
apply each Prepayment Premium then on deposit in the Distribution Account and
received during or prior to the related Collection Period, to pay additional
interest to REMIC II in respect of the REMIC I Regular Interest that relates to
the Mortgage Loan (including without limitation an REO Mortgage Loan or, if
applicable, a Replacement Mortgage Loan) as to which such Prepayment Premium was
received.
(d) All amounts (other than additional interest in the form of
Prepayment Premiums) deemed paid to REMIC II in respect of the REMIC I Regular
Interests pursuant to this Section 6.2 on any Distribution Date is herein
referred to as the "REMIC II DISTRIBUTION AMOUNT" for such date.
SECTION 6.3. REMIC II.
(a) It is the intention of the parties hereto that the
distributions set forth below result in the Certificate Principal Balances of
each Class of REMIC II Regular Interests and its corresponding Class of
Certificates being equal. On each Distribution Date, the Trustee shall be deemed
to apply the REMIC II Distribution Amount for such date for the following
purposes and in the following order of priority:
(i) to distributions of interest to REMIC III in respect
of REMIC II Regular Interest A-1 and REMIC II Regular Interest A-2, up
to an amount equal to (and pro rata in accordance with) all
Uncertificated Distributable Interest on such REMIC II Regular Interests
for such Distribution Date;
(ii) to distributions of principal to REMIC III in respect
of first, REMIC II Regular Interest A-1, and second, REMIC II Regular
Interest A-2, in each case up to an amount equal to the lesser of (1)
the then outstanding Uncertificated Principal Balance of such Class and
(2) the remaining portion, if any, of such REMIC II Distribution Amount;
(iii) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
A-1 and REMIC II Regular Interest A-2 (with interest), up to an amount
equal to (and pro rata in accordance with) the Loss Reimbursement Amount
in respect of such REMIC II Regular Interest for such Distribution Date;
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(iv) to distributions of interest to REMIC III in respect
of REMIC II Regular Interest B, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(v) to distributions of principal to REMIC III in respect
of REMIC II Regular Interest B, until the Uncertificated Principal
Balance thereof is reduced to zero;
(vi) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
B (with interest), up to an amount equal to the Loss Reimbursement
Amount in respect of such REMIC II Regular Interest for such
Distribution Date;
(vii) to distributions of interest to REMIC III in respect
of REMIC II Regular Interest C, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(viii) to distributions of principal to REMIC III in
respect of REMIC II Regular Interest C, until the Uncertificated
Principal Balance thereof is reduced to zero;
(ix) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
C (with interest), up to an amount equal to the Loss Reimbursement
Amount in respect of such REMIC II Regular Interest for such
Distribution Date;
(x) to distributions of interest to REMIC III in respect
of REMIC II Regular Interest D, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xi) to distributions of principal to REMIC III in respect
of REMIC II Regular Interest D, until the Uncertificated Principal
Balance thereof is reduced to zero;
(xii) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
D (with interest), up to an amount equal to the Loss Reimbursement
Amount in respect of such REMIC II Regular Interest for such
Distribution Date;
(xiii) to distributions of interest to REMIC III in
respect of REMIC II Regular Interest E, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xiv) to distributions of principal to REMIC III in
respect of REMIC II Regular Interest E, until the Uncertificated
Principal Balance thereof is reduced to zero;
(xv) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
E (with interest), up to an amount equal to the Loss Reimbursement
Amount in respect of such REMIC II Regular Interest for such
Distribution Date;
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(xvi) to distributions of interest to REMIC III in respect
of REMIC II Regular Interest F, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xvii) to distributions of principal to REMIC III in
respect of REMIC II Regular Interest F, until the Uncertificated
Principal Balance thereof is reduced to zero;
(xviii)to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
F (with interest), up to an amount equal to the Loss Reimbursement
Amount in respect of such REMIC II Regular Interest for such
Distribution Date;
(xix) to distributions of interest to REMIC III in respect
of REMIC II Regular Interest G, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xx) to distributions of principal to REMIC III in respect
of REMIC II Regular Interest G, until the Uncertificated Principal
Balance thereof is reduced to zero;
(xxi) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
G (with interest), up to an amount equal to the Loss Reimbursement
Amount in respect of such REMIC II Regular Interest for such
Distribution Date;
(xxii) to distributions of interest to REMIC III in
respect of REMIC II Regular Interest H, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xxiii)to distributions of principal to REMIC III in
respect of REMIC II Regular Interest H, until the Uncertificated
Principal Balance thereof is reduced to zero;
(xxiv) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
H (with interest), up to an amount equal to the Loss Reimbursement
Amount in respect of such REMIC II Regular Interest for such
Distribution Date;
(xxv) to distributions of interest to REMIC III in respect
of REMIC II Regular Interest J, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xxvi) to distributions of principal to REMIC III in
respect of REMIC II Regular Interest J, until the Uncertificated
Principal Balance thereof is reduced to zero;
(xxvii)to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
J (with interest), up to an amount equal to the Loss Reimbursement
Amount in respect of such REMIC II Regular Interest for such
Distribution Date;
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(xxviii) to distributions of interest to REMIC III in
respect of REMIC II Regular Interest K, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xxix) to distributions of principal to REMIC III in
respect of REMIC II Regular Interest K, until the Uncertificated
Principal Balance thereof is reduced to zero;
(xxx) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
K (with interest), up to an amount equal to the Loss Reimbursement
Amount in respect of such REMIC II Regular Interest for such
Distribution Date;
(xxxi) to distributions of interest to REMIC III in
respect of REMIC II Regular Interest L, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xxxii)to distributions of principal to REMIC III in
respect of REMIC II Regular Interest L, until the Uncertificated
Principal Balance thereof is reduced to zero;
(xxxiii) to reimburse REMIC III for any Realized Losses
and Expense Losses previously deemed allocated to REMIC II Regular
Interest L (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such REMIC II Regular Interest for
such Distribution Date;
(xxxiv)to distributions of interest to REMIC III in
respect of REMIC II Regular Interest M, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xxxv) to distributions of principal to REMIC III in
respect of REMIC II Regular Interest M, until the Uncertificated
Principal Balance thereof is reduced to zero;
(xxxvi)to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
M (with interest), up to an amount equal to the Loss Reimbursement
Amount in respect of such REMIC II Regular Interest for such
Distribution Date;
(xxxvii) to distributions of interest to REMIC III in
respect of REMIC II Regular Interest N, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xxxviii) to distributions of principal to REMIC III in
respect of REMIC II Regular Interest N, until the Uncertificated
Principal Balance thereof is reduced to zero;
(xxxix) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
N (with interest), up to an amount equal to the Loss Reimbursement
Amount in respect of such REMIC II Regular Interest for such
Distribution Date;
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(xl) to distributions of interest to REMIC III in respect
of REMIC II Regular Interest O, up to an amount equal to all
Uncertificated Distributable Interest on such REMIC II Regular Interest
for such Distribution Date;
(xli) to distributions of principal to REMIC III in
respect of REMIC II Regular Interest O, until the Uncertificated
Principal Balance thereof is reduced to zero;
(xlii) to reimburse REMIC III for any Realized Losses and
Expense Losses previously deemed allocated to REMIC II Regular Interest
O (with interest), up to an amount equal to the Loss Reimbursement
Amount in respect of such REMIC II Regular Interest for such
Distribution Date; and
(xliii)to pay to the Holders of the Class R-II
Certificates, the balance, if any, of the REMIC II Distribution Amount.
(b) On each Distribution Date, the Trustee shall be deemed to
apply all Prepayment Premiums then on deposit in the Distribution Account and
received during or prior to the related Collection Period, to pay additional
interest to REMIC III in respect of the REMIC II Regular Interests.
(c) All amounts (other than additional interest in the form of
Prepayment Premiums) deemed paid to REMIC III in respect of the REMIC II Regular
Interests pursuant to this Section 6.3 on any Distribution Date is herein
referred to as the "REMIC III DISTRIBUTION AMOUNT" for such date.
SECTION 6.4. REMIC III.
(a) On each Distribution Date, following the deemed payments to
REMIC III in respect of the REMIC II Regular Interests on such date pursuant to
Section 6.3, the Trustee shall withdraw from the Distribution Account the REMIC
III Distribution Amount for such Distribution Date and shall apply such amount
for the following purposes and in the following order of priority:
(i) to pay interest to the Holders of the respective
Classes of Senior Certificates, in an amount equal to, and pro rata in
accordance with, all Distributable Certificate Interest in respect of
each such Class of Certificates for such Distribution Date;
(ii) to pay principal from the Principal Distribution
Amount for such Distribution Date, first to the Holders of the Class A-1
Certificates and, second to the Holders of the Class A-2 Certificates in
each case, up to an amount equal to the lesser of (1) the
then-outstanding Class Principal Balance of such Class and (2) the
remaining portion, if any, of such Principal Distribution Amount;
(iii) to reimburse the Holders of the respective Classes
of Class A Certificates for any Realized Losses and Expense Losses
previously deemed allocated to such Classes of Certificates (with
interest), up to an amount equal to, and pro rata as among such Classes
in accordance with, the respective Loss Reimbursement Amounts in respect
of such Classes of Certificates for such Distribution Date; and
(iv) to make payments on the Subordinate and Residual
Certificates as provided below;
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provided that, on each Distribution Date after the aggregate of the Class
Principal Balances of the Subordinate Certificates has been reduced to zero, and
in any event on the final Distribution Date in connection with a termination of
the Trust described in Article X hereof, the payments of principal to be made
pursuant to clause (ii) above, will be so made to the Holders of the respective
Classes of Class A Certificates, up to an amount equal to, and pro rata as among
such Classes in accordance with, the respective then outstanding Class Principal
Balance of such Certificates for such Distribution Date and without regard to
the Principal Distribution Amounts for such date;
(b) On each Distribution Date, following the foregoing series of
payments on the Senior Certificates, the Trustee shall apply the remaining
portion, if any, of the REMIC III Distribution Amount for such date for the
following purposes and in the following order of priority:
(i) to pay interest to the Holders of the Class B
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(ii) if the Class Principal Balances of the Class A
Certificates have been reduced to zero, to pay principal to the Holders
of the Class B Certificates, up to an amount equal to the lesser of (A)
the then-outstanding Class Principal Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for
such Distribution Date;
(iii) to reimburse the Holders of the Class B Certificates
for Realized Losses and Expense Losses, if any, previously deemed
allocated to such Class of Certificates (with interest), up to an amount
equal to the Loss Reimbursement Amount in respect of such Class of
Certificates for such Distribution Date;
(iv) to pay interest to the Holders of the Class C
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(v) if the Class Principal Balances of the Class A and
Class B Certificates have been reduced to zero, to pay principal to the
Holders of the Class C Certificates, up to an amount equal to the lesser
of (A) the then-outstanding Class Principal Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for
such Distribution Date;
(vi) to reimburse the Holders of the Class C Certificates
for any Realized Losses and Expenses Losses previously deemed allocated
to such Class of Certificates (with interest), up to an amount equal to
the Loss Reimbursement Amount in respect of such Class of Certificates
for such Distribution Date;
(vii) to pay interest to the Holders of the Class D
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(viii) if the Class Principal Balances of the Class A,
Class B and Class C Certificates have been reduced to zero, to pay
principal to the Holders of the Class D Certificates, up to an amount
equal to the lesser of (A) the then-outstanding Class Principal Balance
of such Class of Certificates and (B) the remaining Principal
Distribution Amount for such Distribution Date;
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(ix) to reimburse the Holders of the Class D Certificates
for any Realized Losses and Expense Losses previously deemed allocated
to such Class of Certificates (with interest), up to an amount equal to
the Loss Reimbursement Amount in respect of such Class of Certificates
for such Distribution Date;
(x) to pay interest to the Holders of the Class E
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(xi) if the Class Principal Balances of the Class A, Class
B, Class C and Class D Certificates have been reduced to zero, to pay
principal to the Holders of the Class E Certificates, up to an amount
equal to the lesser of (A) the then-outstanding Class Principal Balance
of such Class of Certificates and (B) the remaining Principal
Distribution Amount for such Distribution Date;
(xii) to reimburse the Holders of the Class E Certificates
for any Realized Losses and Expense Losses previously deemed allocated
to such Class of Certificates (with interest), up to an amount equal to
the Loss Reimbursement Amount in respect of such Class of Certificates
for such Distribution Date;
(xiii) to pay interest to the Holders of the Class F
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(xiv) if the Class Principal Balances of the Class A,
Class B, Class C, Class D and Class E Certificates have been reduced to
zero, to pay principal to the Holders of the Class F Certificates, up to
an amount equal to the lesser of (A) the then-outstanding Class
Principal Balance of such Class of Certificates and (B) the remaining
Principal Distribution Amount for such Distribution Date;
(xv) to reimburse the Holders of the Class F Certificates
for any Realized Losses and Expense Losses previously deemed allocated
to such Class of Certificates (with interest), up to an amount equal to
the Loss Reimbursement Amount in respect of such Class of Certificates
for such Distribution Date;
(xvi) to pay interest to the Holders of the Class G
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(xvii) if the Class Principal Balances of the Class A,
Class B, Class C, Class D, Class E and Class F Certificates have been
reduced to zero, to pay principal to the Holders of the Class G
Certificates, up to an amount equal to the lesser of (A) the
then-outstanding Class Principal Balance of such Class of Certificates
and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(xviii)to reimburse the Holders of the Class G
Certificates for any Realized Losses and Expense Losses previously
deemed allocated to such Class of Certificates (with interest), up to an
amount equal to the Loss Reimbursement Amount in respect of such Class
of Certificates for such Distribution Date;
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(xix) to pay interest to the Holders of the Class H
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(xx) if the Class Principal Balances of the Class A, Class
B, Class C, Class D, Class E, Class F and Class G Certificates have been
reduced to zero, to pay principal to the Holders of the Class H
Certificates, up to an amount equal to the lesser of (A) the
then-outstanding Class Principal Balance of such Class of Certificates
and (B) the remaining Principal Distribution Amount for such
Distribution Date;
(xxi) to reimburse the Holders of the Class H Certificates
for any Realized Losses and Expense Losses previously deemed allocated
to such Class of Certificates (with interest), up to an amount equal to
the Loss Reimbursement Amount in respect of such Class of Certificates
for such Distribution Date;
(xxii) to pay interest to the Holders of the Class J
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(xxiii)if the Class Principal Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G and Class H
Certificates have been reduced to zero, to pay principal to the Holders
of the Class J Certificates, up to an amount equal to the lesser of (A)
the then-outstanding Class Principal Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for
such Distribution Date;
(xxiv) to reimburse the Holders of the Class J
Certificates for any Realized Losses and Expense Losses previously
deemed allocated to such Class of Certificates (with interest), up to an
amount equal to the Loss Reimbursement Amount in respect of such Class
of Certificates for such Distribution Date;
(xxv) to pay interest to the Holders of the Class K
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(xxvi) if the Class Principal Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H and Class
J Certificates have been reduced to zero, to pay principal to the
Holders of the Class K Certificates, up to an amount equal to the lesser
of (A) the then-outstanding Class Principal Balance of such Class of
Certificates and (B) the remaining Principal Distribution Amount for
such Distribution Date;
(xxvii)to reimburse the Holders of the Class K
Certificates for any Realized Losses and Expense Losses previously
deemed allocated to such Class of Certificates (with interest), up to an
amount equal to the Loss Reimbursement Amount in respect of such Class
of Certificates for such Distribution Date;
(xxviii) to pay interest to the Holders of the Class L
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
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(xxix) if the Class Principal Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J
and Class K Certificates have been reduced to zero, to pay principal to
the Holders of the Class L Certificates, up to an amount equal to the
lesser of (A) the then-outstanding Class Principal Balance of such Class
of Certificates and (B) the remaining Principal Distribution Amount for
such Distribution Date;
(xxx) to reimburse the Holders of the Class L Certificates
for any Realized Losses and Expense Losses previously deemed allocated
to such Class of Certificates (with interest), up to an amount equal to
the Loss Reimbursement Amount in respect of such Class of Certificates
for such Distribution Date; and
(xxxi) to pay interest to the Holders of the Class M
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(xxxii)if the Class Principal Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J,
Class K and Class L Certificates have been reduced to zero, to pay
principal to the Holders of the Class M Certificates, up to an amount
equal to the lesser of (A) the then-outstanding Class Principal Balance
of such Class of Certificates and (B) the remaining Principal
Distribution Amount for such Distribution Date;
(xxxiii) to reimburse the Holders of the Class M
Certificates for any Realized Losses and Expense Losses previously
deemed allocated to such Class of Certificates (with interest), up to an
amount equal to the Loss Reimbursement Amount in respect of such Class
of Certificates for such Distribution Date;
(xxxiv) to pay interest to the Holders of the Class N
Certificates, up to an amount equal to all Distributable Certificate
Interest in respect of such Class of Certificates for such Distribution
Date;
(xxxv) if the Class Principal Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J,
Class K, Class L and Class M Certificates have been reduced to zero, to
pay principal to the Holders of the Class N Certificates, up to an
amount equal to the lesser of (A) the then-outstanding Class Principal
Balance of such Class of Certificates and (B) the remaining Principal
Distribution Amount for such Distribution Date;
(xxxvi)to reimburse the Holders of the Class N
Certificates for any Realized Losses and Expense Losses previously
deemed allocated to such Class of Certificates (with interest), up to an
amount equal to the Loss Reimbursement Amount in respect of such Class
of Certificates for such Distribution Date;
(xxxvii) to pay interest to the Holders of the Class O
Regular Interests represented by the Class O Certificates, up to an
amount equal to all Distributable Certificate Interest in respect of
such Class O Regular Interests represented by such Certificates for such
Distribution Date;
(xxxviii) if the Class Principal Balances of the Class A,
Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class J,
Class K, Class L, Class M and Class N Certificates have been reduced to
zero, to pay principal to the Holders of the Class O Certificates, up to
an amount equal to the lesser of (A) the then-outstanding Class
Principal
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Balance of such Class of Certificates and (B) the remaining Principal
Distribution Amount for such Distribution Date;
(xxxix) to reimburse the Holders of the Class O
Certificates for any Realized Losses and Expense Losses previously
deemed allocated to such Class of Certificates in respect of the Class O
Regular Interests (with interest), up to an amount equal to the Loss
Reimbursement Amount in respect of such Class of Certificates for such
Distribution Date;
(xl) to pay to the Holders of the Class R-III Certificates
the balance, if any, of the REMIC III Distribution Amount for such
Distribution Date.
(c) On each Distribution Date, the Trustee shall withdraw any
amounts then on deposit in the Distribution Account that represent Prepayment
Premiums collected in respect of Mortgage Loans during or prior to the related
Collection Period and shall distribute such amounts, in each case, subject to
available funds, as additional interest, to the Holders of the respective
Classes of Principal Balance Certificates (other than the Class G, H, J, K, L,
M, N and O Certificates) then entitled to distributions of principal from the
Principal Distribution Amount for such Distribution Date an aggregate amount
(allocable among such Classes, if more than one, as described below) equal to
the lesser of (i) such Prepayment Premium and (ii) such Prepayment Premium
multiplied by a fraction, the numerator of which is equal to the excess, if any,
of the Pass-Through Rate applicable to the most senior of such Classes of
Certificates then outstanding (or, in the case of the Class A Certificates, the
one with the earlier payment priority), over the relevant Discount Rate (as
defined below), and the denominator of which is equal to the excess, if any, of
the Mortgage Rate for the prepaid Mortgage Loan, over the relevant Discount
Rate. If there is more than one Class of Principal Balance Certificates entitled
to distributions of principal from the Principal Distribution Amount for such
Distribution Date, the aggregate amount described in the preceding sentence
shall be allocated among such Classes on a pro rata basis in accordance with the
relative amounts of such distributions of principal. Any portion of such
Prepayment Premium that is not so distributed to the Holders of such Principal
Balance Certificates will be distributed to the Holders of the Class X
Certificates.
For purposes of the foregoing, the "DISCOUNT RATE" is the rate
which, when compounded monthly, is equivalent to the Treasury Rate when
compounded semi-annually. The "TREASURY RATE" is the yield calculated by the
linear interpolation of the yields, as reported in Federal Reserve Statistical
Release H.15-Selected Interest Rates under the heading "U.S. government
securities/Treasury constant maturities" for the week ending prior to the date
of the relevant principal prepayment, of U.S. Treasury constant maturities with
a maturity date (one longer and one shorter) most nearly approximating the
maturity date (or the Anticipated Repayment Date, if applicable) of the Mortgage
Loan prepaid. If Release H.15 is no longer published, the Trustee shall select a
comparable publication to determine the Treasury Rate.
(d) All of the foregoing distributions to be made from the
Distribution Account on any Distribution Date with respect to the REMIC III
Certificates shall be deemed made from the payments deemed made to REMIC III in
respect of the REMIC II Regular Interests on such Distribution Date pursuant to
Section 6.3.
SECTION 6.4.1.GRANTOR TRUST
(a) On each Distribution Date, the Trustee shall withdraw from
the Excess Interest Distribution Account the amount on deposit therein, and
shall pay such amount to the Holders of the Class O Certificates in respect of
their beneficial ownership interest in the assets of the grantor trust, pro
85
rata in accordance with their respective Percentage Interests. Such
distributions shall be made in addition to any amounts distributable to such
Holders pursuant to Section 6.4 hereof in respect of their interests in the
REMIC regular interest evidenced by such Class O Certificates, and without
regard to whether the REMIC regular interest component of the Class O
Certificates is then outstanding.
SECTION 6.5. ALLOCATION OF REALIZED LOSSES AND EXPENSE LOSSES.
(a) On each Distribution Date, following the deemed
distributions to be made in respect of the REMIC I Regular Interests pursuant to
Section 6.2, the Uncertificated Principal Balance of each REMIC I Regular
Interest (after taking account of such deemed distributions) shall be reduced to
equal the Stated Principal Balance of the related Mortgage Loan (including
without limitation an REO Mortgage Loan or, if applicable, a Replacement
Mortgage Loan) that will be outstanding immediately following such Distribution
Date. Such reductions shall be deemed to be an allocation of Realized Losses and
Expense Losses.
(b) On each Distribution Date, following the payments deemed to
be made to REMIC III in respect of the REMIC II Regular Interests on such date
pursuant to Section 6.3, the Trustee shall also determine the amount, if any, by
which (i) the then-aggregate Uncertificated Principal Balance of REMIC II
Regular Interests A, B, C, D, E, F, G, H, J, K, L, M, N and O exceeds (ii) the
aggregate Stated Principal Balance of the Mortgage Pool that will be outstanding
immediately following such Distribution Date. If such excess does exist, then
the respective Uncertificated Principal Balances of such REMIC II Regular
Interests shall be reduced sequentially, in reverse alphabetical order of letter
designation, in each case, until the first to occur of such excess being reduced
to zero or the Uncertificated Principal Balance of the particular REMIC II
Regular Interest being reduced to zero. Such reductions in the Uncertificated
Principal Balances of such REMIC II Regular Interests shall be deemed to be
allocations of Realized Losses and Expense Losses.
(c) On each Distribution Date, following the distributions to be
made to the Certificateholders on such date pursuant to Section 6.4, the Trustee
shall determine the amount, if any, by which (i) the then-aggregate Certificate
Principal Balance of the Principal Balance Certificates, exceeds (ii) the
aggregate Stated Principal Balance of the Mortgage Pool that will be outstanding
immediately following such Distribution Date. If such excess does exist, then
the Class Principal Balances of the Class O, Class N, Class M, Class L, Class K,
Class J, Class H, Class G, Class F, Class E, Class D, Class C and Class B
Certificates shall be reduced sequentially, in that order, in each case, until
the first to occur of such excess being reduced to zero or the related Class
Principal Balance being reduced to zero. If, after the foregoing reductions, the
amount described in clause (i) of the second preceding sentence still exceeds
the amount described in clause (ii) of the second preceding sentence, then the
respective Class Principal Balances of the Class A-1 and Class A-2 Certificates
shall be reduced, pro rata in accordance with the relative sizes of the
then-outstanding Class Principal Balances of such Classes of Certificates, until
the first to occur of such excess being reduced to zero or each such Class
Principal Balance being reduced to zero. Such reductions in the Class Principal
Balances of the respective Classes of Principal Certificates shall be deemed to
be allocations of Realized Losses and Expense Losses.
SECTION 6.6. APPRAISAL REDUCTIONS. Not later than the earliest of
the dates set forth in the definition of "Appraisal Event" in respect of any
Mortgage Loan, or within such longer period as the Special Servicer is
diligently and in good faith proceeding to obtain an appraisal, the Special
Servicer shall obtain (A) an Appraisal of the related Mortgaged Property or REO
Property, as applicable, if the Stated Principal Balance of such Required
Appraisal Loan exceeds $1,000,000 or (B) at the option of the Special Servicer,
if the Stated Principal Balance of such Required Appraisal Loan is less than or
equal to
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$1,000,000, either an internal valuation prepared by the Special Servicer or an
Appraisal; provided that, in the case of either clause (A) or (B), if the
Special Servicer had completed or obtained an Appraisal or internal valuation
within the immediately preceding 12 months, the Special Servicer may rely on
such Appraisal or internal valuation and shall have no duty to prepare a new
Appraisal or internal valuation, unless such reliance would not be in accordance
with the Servicing Standard. Such Appraisal or internal valuation shall be
updated at least annually to the extent such Mortgage Loan remains a Required
Appraisal Loan. The cost of any such Appraisal if not an internal valuation
performed by the Special Servicer shall be an expense of the Trust and may be
paid from REO Income, treated as an Additional Trust Expense or advanced by the
Special Servicer (or, at the direction of the Special Servicer, by the Master
Servicer) in which event it shall be treated as a Servicing Advance, subject to
Section 4.4 hereof. The Master Servicer, based on the Appraisal or internal
valuation provided to it by the Special Servicer, shall calculate any Appraisal
Reduction. The Master Servicer shall calculate or recalculate the Appraisal
Reduction for any Mortgage Loan based on updated Appraisals or internal
valuations provided to it from time to time by the Special Servicer. Any
Appraisal or internal valuation obtained by the Special Servicer pursuant to
this Section 6.6 shall be delivered by the Special Servicer to the Master
Servicer, and the Master Servicer shall deliver such Appraisal or internal
valuation to the Trustee within 15 days of receipt by the Master Servicer of
such Appraisal or internal valuation from the Special Servicer and the Trustee
shall deliver such Appraisal or internal valuation to the Holders of the
Privately Offered Certificates within 15 days of receipt by the Trustee of such
Appraisal or internal valuation from the Master Servicer.
SECTION 6.7. COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provision of this Agreement to the contrary, the
Trustee shall comply with all federal withholding requirements with respect to
payments to Certificateholders of interest, original issue discount, or other
amounts that the Trustee reasonably believes are subject to such requirements
under the Code. The consent of Certificateholders shall not be required for any
such withholding. In the event the Trustee withholds any amount from payments
made to any Certificateholder pursuant to federal withholding requirements, the
Trustee shall indicate to such Certificateholder the amount withheld.
ARTICLE VII.
CONCERNING THE TRUSTEE
SECTION 7.1. DUTIES OF TRUSTEE
(a) The Trustee, prior to the occurrence of an Event of Default
and after the curing or waiver of all Events of Default that may have occurred,
will perform only those duties as are specifically set forth in this Agreement
and no implied covenants or obligations shall be read into this Agreement
against the Trustee. Any permissive right of the Trustee provided for in this
Agreement shall not be construed as a duty of the Trustee. Subject to Section
7.1(c)(vi), if an Event of Default occurs and is continuing, then, the Trustee
shall exercise such of the rights and powers vested in it by this Agreement and
use the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such Person's
own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they on
their face conform to the requirements of this Agreement (to the extent such
requirements are set
87
forth herein); provided that the Trustee shall not be responsible for the
accuracy or content of any such resolution, certificate, statement, opinion,
report, document, order or other instrument furnished by the Master Servicer or
any other Person to the Trustee pursuant to this Agreement. If any such
instrument is found on its face not to conform to the requirements of this
Agreement, the Trustee shall take such action as it deems appropriate to have
the instrument corrected, and if the instrument is not corrected to the
Trustee's reasonable satisfaction, the Trustee will provide notice thereof to
the Certificateholders.
(c) No provision of this Agreement shall be construed to relieve
the Trustee or any of its respective directors, officers, employees, agents or
Controlling Persons from liability for their own negligent action, their own
negligent failure to act or their own willful misconduct; provided that:
(i) Neither the Trustee nor any of its directors,
officers, employees, agents or Controlling Persons shall be personally
liable with respect to any action taken, suffered or omitted to be taken
by it (A) in its reasonable business judgment in accordance with this
Agreement or (B) at the direction of Holders of Certificates entitled to
not less than a majority of the Voting Rights;
(ii) No provision of this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it;
(iii) None of the Trustee or any of its respective
directors, officers, employees, agents or Controlling Persons shall be
responsible for any act or omission of the Master Servicer, the Special
Servicer, the Depositor or any Seller, including, without limitation,
actions taken pursuant to this Agreement, except to the extent the
Trustee is acting as Master Servicer or Special Servicer;
(iv) The execution by the Trustee of any forms or plans of
liquidation in connection with the REMIC Pools shall not constitute a
representation by the Trustee as to the adequacy of such form or plan of
liquidation;
(v) The Trustee shall not be under any obligation to
appear in, prosecute or defend any legal action which is not incidental
to its duties as Trustee in accordance with this Agreement. In such
event, all legal expense and costs of such action shall be expenses and
costs of the Trust and the Trustee shall be entitled to be reimbursed
therefor from the Collection Account pursuant to Section 5.2(b); and
(vi) The Trustee shall not be charged with knowledge of
any failure by the Master Servicer or the Special Servicer to comply
with their respective obligations under this Agreement or any act,
failure, or breach of any Person upon the occurrence of which the
Trustee may be required to act, except to the extent the Trustee is
acting as Master Servicer or Special Servicer, or unless a Responsible
Officer of the Trustee obtains actual knowledge of such failure. The
Trustee shall be deemed to have actual knowledge of the failure of the
Master Servicer or Special Servicer to deliver to the Trustee any
report, certificate or other document required to be delivered to the
Trustee but not so delivered when required pursuant to this Agreement.
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SECTION 7.2. CERTAIN MATTERS AFFECTING THE TRUSTEE.
(a) Except as otherwise provided in Section 7.1:
(i) The Trustee may request, and may rely and shall be
protected in acting or refraining from acting upon any resolution,
Officer's Certificate, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and the advice
of such counsel and any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
advice or Opinion of Counsel;
(iii) Neither the Trustee nor any of their respective
directors, officers, employees, agents or Controlling Persons shall be
personally liable for any action taken, suffered or omitted by the
Trustee in its reasonable business judgment and reasonably believed by
it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(iv) The Trustee shall be under no obligation to exercise
any of the powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or relating hereto or make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document (provided the
same appears regular on its face), unless requested in writing to do so
by Holders of Certificates entitled to at least 25% of the Voting
Rights; provided that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by
it in connection with the foregoing is, in the opinion of the Trustee
not reasonably assured to the Trustee by the security afforded to it by
the terms of this Agreement, the Trustee may require reasonable
indemnity against such expense or liability or payment of such estimated
expenses as a condition to proceeding. The Trustee's reasonable expenses
shall be paid by the Certificateholders making such request;
(v) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys, which agents or attorneys shall have any or
all of the rights, powers, duties and obligations of the Trustee
conferred on them by such appointment; provided that the Trustee shall
continue to be responsible for its duties and obligations hereunder and
shall not be liable for the actions or omissions of the Master Servicer,
the Special Servicer or the Depositor;
(vi) The Trustee shall in no event be required to obtain a
deficiency judgment against a Mortgagor;
(vii) The Trustee shall not be required to expend its own
funds or otherwise incur any financial liability in the performance of
any of its duties hereunder (unless otherwise expressly required herein
to do so) if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such liability is
not assured to it;
(viii) The Trustee shall not be liable for any loss on any
investment of funds pursuant to this Agreement; provided, however, that
this provision shall not operate to forgive
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the Trustee for a liability that it may have for any investment loss and
incurred on such investment; and
(ix) unless otherwise specifically required by law, the
Trustee shall not be required to post any surety or bond of any kind in
connection with the execution or performance of its duties hereunder.
(b) Following the Closing Date, the Trustee shall not accept any
contribution of assets to the Trust not specifically contemplated by this
Agreement unless the Trustee shall have received a Nondisqualification Opinion
at the expense of the Person desiring to contribute such assets with respect to
such contribution.
(c) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
the proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
(d) The Trustee shall timely pay, from its own funds, the amount
of any and all federal, state and local taxes imposed on the Trust, its assets,
any REMIC Pool or transactions including, without limitation, (A) "prohibited
transaction" taxes as defined in Section 860F of the Code, if, when and as the
same shall be due and payable, (B) any tax on contributions to a REMIC after the
Closing Date imposed by Section 860G(d) of the Code and (C) any tax on "net
income from foreclosure property" as defined in Section 860G(c) of the Code, but
only if such taxes arise out of a breach by the Trustee of its obligations
hereunder, which breach constitutes negligence or willful misconduct of the
Trustee.
SECTION 7.3. TRUSTEE NOT LIABLE FOR CERTIFICATES OR INTERESTS OR
MORTGAGE LOANS. The Trustee makes no representations as to the validity or
sufficiency of this Agreement , the Certificates (other than the certificate of
authentication on the Certificates) or of any Mortgage Loan, Assignment of
Mortgage or related document. The Trustee shall not be accountable for the use
or application by the Depositor or the Master Servicer or the Special Servicer
of any of the Certificates or any of the proceeds of such Certificates, or for
the use or application by the Depositor or the Master Servicer or the Special
Servicer of funds paid in consideration of the assignment of the Mortgage Loans
to the Trust or deposited into the Distribution Account or any other fund or
account maintained with respect to the Certificates or any account maintained
pursuant to this Agreement or for investment of any such amounts. The Trustee
shall not at any time have any responsibility or liability for or with respect
to the legality, validity or enforceability of the Mortgages or the Mortgage
Loans, or the perfection and priority of the Mortgages or, except as provided in
Section 2.1(c), the maintenance of any such perfection and priority, or for or
with respect to the efficacy of the Trust or its ability to generate the
payments to be distributed to Certificateholders under this Agreement,
including, without limitation, the existence, condition and ownership of any
Mortgaged Property; the existence and enforceability of any hazard insurance
thereon; the validity of the assignment of the Mortgage Loans to the Trust or of
any intervening assignment; the completeness of the Mortgage Loans; the
performance or enforcement of the Mortgage Loans (other than if the Trustee
shall assume the duties of the Master Servicer or the Special Servicer); any
investment of monies by the Master Servicer or the Special Servicer or any loss
resulting therefrom; the failure of the Master Servicer or any Sub-Servicer or
the Special Servicer to act or perform any duties required of it on behalf of
the Trustee hereunder; or any action by the Trustee taken at the instruction of
the Master Servicer or the Special Servicer.
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SECTION 7.4. TRUSTEE MAY OWN CERTIFICATES. The Trustee and any
agent of the Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights it would have if it were
not the Trustee or such agent.
SECTION 7.5. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
hereunder shall at all times be (i) an institution insured by the FDIC, (ii) a
corporation, national bank or national banking association authorized to
exercise corporate trust powers, having a combined capital and surplus of not
less than $100,000,000 and subject to supervision or examination by federal or
state authority, and (iii) an institution whose long-term senior unsecured debt
is at all times rated not less than "AA" by Fitch and S&P or otherwise
acceptable to the Rating Agencies as evidenced by a Rating Agency Confirmation.
If such corporation, national bank or national banking association publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then, for the purposes of
this Section, the combined capital and surplus of such corporation, national
bank or national banking association shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 7.6.
SECTION 7.6. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign and be discharged from
the trusts hereby created by giving written notice thereof to the Depositor, the
Master Servicer and the Rating Agencies; provided that such resignation shall
not be effective until its successor shall have accepted the appointment,
commenced acting as successor and Rating Agency Confirmation from Fitch shall
have been obtained with respect to such appointment. Upon receiving such notice
of resignation, the Depositor will promptly appoint a successor trustee, by
written instrument, one copy of which instrument shall be delivered to the
resigning Trustee, one copy to the successor trustee and one copy to each of the
Master Servicer and the Rating Agencies. If no successor trustee shall have been
so appointed and shall have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
(b) If at any time (i) the Trustee shall cease to be eligible
in accordance with the provisions of Section 7.5 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, (iii) a tax is
imposed or threatened with respect to the Trust or any REMIC Pool by any state
in which the Trustee or the Trust held by the Trustee is located; provided,
however, that, if the Trustee agrees to indemnify the Trust for such taxes, it
shall not be removed pursuant to this clause (iii), or (iv) the continuation of
the Trustee as such would result in a downgrade, qualification (if applicable)
or withdrawal of the rating by any one or more of the Rating Agencies of any
Class of Certificates (provided that a designation of "negative" credit watch
shall not constitute a qualification), then the Depositor may remove such
Trustee and appoint a successor trustee by written instrument, one copy of which
instrument shall be delivered to the Trustee so removed, one copy to the
successor trustee and one copy to each of the Master Servicer and the Rating
Agencies. In the case of removal under clauses (i)-(iv) above, the Trustee shall
bear all such costs of such transfer. Such succession shall take effect after a
successor trustee has been appointed.
(c) Reserved.
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(d) The Holders of Certificates entitled to at least 51% of
the Voting Rights may without cause upon 30 days' written notice to the Trustee
and to the Depositor remove the Trustee by such written instrument, signed by
such Holders or their attorney-in-fact duly authorized, one copy of which
instrument shall be delivered to the Depositor and one copy to the Trustee so
removed; the Depositor shall thereupon use its best efforts to appoint a
successor Trustee in accordance with this Section. The Certificateholders
effecting such transfer shall be responsible for the reasonable out-of-pocket
costs of such removal, including fees and any related expenses, such as those
incurred in transferring the Mortgage Files to the successor Trustee.
(e) Any resignation or removal of the Trustee and appointment
of a successor trustee meeting the eligibility requirements of Section 7.5
pursuant to any of the provisions of this Section shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 7.7
and the commencement of its obligations hereunder. Upon any succession of the
Trustee under this Agreement, the predecessor Trustee shall be entitled to the
payment of compensation and reimbursement agreed to under this Agreement for
services rendered and expenses incurred (including without limitation
unreimbursed Advances made thereby, with any related unpaid Advance Interest
accrued on such Advances) at such times and from such sources as if the
predecessor Trustee had not resigned or been removed. The Trustee shall not be
liable for any action or omission of any successor Trustee.
SECTION 7.7. SUCCESSOR TRUSTEE.
(a) Any successor Trustee appointed as provided in Section 7.6
shall execute, acknowledge and deliver to the Depositor and to its predecessor
Trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with like effect as if originally named as Trustee
herein. The predecessor Trustee shall deliver to the successor Trustee all
Mortgage Files and documents and statements related to the Mortgage Files held
by it hereunder, and shall duly assign, transfer, deliver and pay over to the
successor Trustee the entire Trust, together with all instruments of transfer
and assignment or other documents properly executed necessary to effect such
transfer and such records or copies thereof maintained by the predecessor
Trustee in the administration hereof as may be reasonably requested by the
successor Trustee and shall thereupon be discharged from all duties and
responsibilities under this Agreement. In addition, the Depositor and the
predecessor Trustee shall execute and deliver such other instruments and do such
other things as may reasonably be required to more fully and certainly vest and
confirm in the successor Trustee all such rights, powers, duties and
obligations. Anything herein to the contrary notwithstanding, in no event shall
the combined fees payable to a successor Trustee exceed the Trustee Fee.
(b) No successor Trustee shall accept appointment as provided
in this Section unless at the time of such appointment such successor Trustee
shall be eligible under the provisions of Section 7.5.
(c) Upon acceptance of appointment by a successor Trustee as
provided in this Section, the successor Trustee shall mail notice of the
succession of such Trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register and to the Rating Agencies
(evidence of such mailing to be provided to the Depositor and the Master
Servicer). The expenses of such mailing shall be borne by the successor Trustee.
SECTION 7.8. MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from
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any merger, conversion or consolidation to which such Trustee shall be a party,
or any Persons succeeding to the business of such Trustee, shall be the
successor of such Trustee hereunder, provided that such Person shall be eligible
under the provisions of Section 7.5, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
SECTION 7.9. APPOINTMENT OF CO-TRUSTEE, SEPARATE TRUSTEE OR
CUSTODIAN.
(a) Notwithstanding any other provisions hereof, at any time, the
Trustee, the Depositor or, in the case of the Trust, the Certificateholders
entitled to more than 50% of the Voting Rights shall each have the power from
time to time to appoint one or more Persons to act either as co-trustees jointly
with the Trustee or as separate trustees, or as custodians, for the purpose of
holding title to, foreclosing or otherwise taking action with respect to any
Mortgage Loan outside the state where the Trustee has its principal place of
business where such separate trustee or co-trustee is necessary or advisable (or
the Trustee is advised by the Master Servicer or Special Servicer that such
separate trustee or co-trustee is necessary or advisable) under the laws of any
state in which a property securing a Mortgage Loan is located or for the purpose
of otherwise conforming to any legal requirement, restriction or condition in
any state in which a property securing a Mortgage Loan is located or in any
state in which any portion of the Trust is located. The separate trustees,
co-trustees, or custodians so appointed shall be trustees or custodians for the
benefit of all the Certificateholders, shall have such powers, rights and
remedies as shall be specified in the instrument of appointment and shall be
deemed to have accepted the provisions of this Agreement; provided that no such
appointment shall, or shall be deemed to, constitute the appointee an agent of
the Trustee; provided, further that the Trustee shall not be relieved of
liability for the actions taken or omissions made, without the consent of the
Trustee, of any co-trustee or separate trustee appointed by it and shall not be
liable for the actions of any co-trustee or separate trustee not appointed by
it.
(b) Every separate trustee, co-trustee, and custodian shall, to
the extent permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all powers, duties, obligations and rights conferred
upon the Trustee in respect of the receipt, custody and payment of
moneys shall be exercised solely by the Trustee;
(ii) all other rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon
and exercised or performed by the Trustee and such separate trustee,
co-trustee, or custodian jointly, except to the extent that under any
law of any jurisdiction in which any particular act or acts are to be
performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder) the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations, including the holding of title to the Trust or any portion
thereof in any such jurisdiction, shall be exercised and performed by
such separate trustee, co-trustee, or custodian;
(iii) no trustee or custodian hereunder shall be
personally liable by reason of any act or omission of any other trustee
or custodian hereunder; and
(iv) the Trustee or, in the case of the Trust, the
Certificateholders entitled to more than 50% of the Voting Rights
outstanding may at any time accept the resignation of or remove any
separate trustee, co-trustee or custodian, so appointed by it or them,
if such resignation or removal does not violate the other terms of this
Agreement.
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(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then-separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee, co-trustee or custodian shall refer to this
Agreement and the conditions of this Article VII. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Trustee or separately, as may be provided therein, subject to
all the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee.
(d) Any separate trustee, co-trustee or custodian may, at any
time, constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate
trustee, co-trustee or custodian shall die, become incapable of acting, resign
or be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
(e) No separate trustee, co-trustee or custodian hereunder shall
be required to meet the terms of eligibility as a successor trustee under
Section 7.5 hereof and no notice to Certificateholders of the appointment of any
separate trustee, co-trustee or custodian hereunder shall be required.
(f) The Trustee agrees to instruct the co-trustees, if any, to
the extent necessary to fulfill the Trustee's obligations hereunder.
(g) The Trustee shall pay the reasonable compensation of the
co-trustees, separate trustees or custodians appointed pursuant to this Section
7.9 and shall be reimbursed in accordance with the standards, specified in
Section 7.12 hereof.
(h) Subject to the consent of the Depositor, which consent shall
not be unreasonably withheld, the Trustee may appoint at any time a Custodian to
hold some or all of the Mortgage Files. The appointment of a Custodian shall not
relieve the Trustee from any duties, liabilities or obligations hereunder, and
the Trustee shall remain responsible for all acts and omissions of such
Custodian. Upon the appointment of a Custodian, the Trustee and the Custodian
shall enter into a custodial agreement.
SECTION 7.10. AUTHENTICATING AGENTS.
(a) The Trustee may appoint one or more Authenticating Agents
which shall be authorized to act on behalf of the Trustee in executing and
authenticating Certificates. Wherever reference is made in this Agreement to the
execution and authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
execution and authentication on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be acceptable to the
Depositor and must be a corporation organized and doing business under the laws
of the United States of America or of any state and having a principal office
and place of business in the Borough of Manhattan, the City and State of New
York or in the State of Minnesota, having a combined capital and surplus of at
least $50,000,000, authorized under such laws to do a trust business and subject
to supervision or examination by federal or state authorities. The Trustee
initially shall be Authenticating Agent hereunder. No such appointment shall
relieve the Trustee of liability or responsibility for the duties to be carried
out by the Authenticating Agent.
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(b) Any Person into which any Authenticating Agent may be merged
or converted or with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which any Authenticating Agent shall
be a party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at
least 30 days' advance written notice of resignation to the Trustee and the
Depositor. The Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Depositor. Upon receiving a notice of resignation
or upon such a termination, or in case at any time any Authenticating Agent
shall cease to be eligible in accordance with the provisions of Section 7.10(a),
the Trustee may appoint a successor Authenticating Agent, shall give written
notice of such appointment to the Depositor and shall mail notice of such
appointment to all Holders of Certificates. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested with all the
rights, powers, duties and responsibilities of its predecessor hereunder, with
like effect as if originally named as Authenticating Agent. No such
Authenticating Agent shall be appointed unless eligible under the provisions of
Section 7.10(a). No Authenticating Agent shall have responsibility or liability
for any action taken by it as such at the direction of the Trustee.
SECTION 7.11. INDEMNIFICATION.
(a) The Trustee and each of its directors, officers, employees,
agents and Controlling Persons shall be entitled to indemnification from the
Trust for any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments and any other costs, liabilities, fees and expenses
incurred in connection with any legal action not expressly required hereby to be
borne by the Trustee and incurred without negligence or willful misconduct on
their part, arising out of, or in connection with this Agreement, the
Certificates and the acceptance or administration of the trusts created
hereunder (including, without limitation, any unanticipated loss, liability or
expense incurred in connection with any action or inaction of the Master
Servicer, the Special Servicer or the Depositor hereunder, except to the extent
that the Trustee is acting as Master Servicer or Special Servicer), including
the reasonable costs and expenses of defending themselves against any claim in
connection with the exercise or performance of any of their powers or duties
hereunder and the Trustee and each of its directors, officers, employees, agents
and Controlling Persons shall be entitled to indemnification from the Trust for
any unanticipated loss, liability or expense incurred in connection with the
provision by the Trustee of any report required to be provided by the Trustee
pursuant to this Agreement; provided that:
(i) with respect to any such claim, the Trustee shall have
given the Depositor and the Holders of the Certificates written notice
thereof promptly after the Trustee shall have knowledge thereof;
provided, however, that failure to give such notice to the Depositor and
the Holders of Certificates shall not affect the Trustee's rights to
indemnification herein unless the Master Servicer's defense of such
claim is materially prejudiced thereby;
(ii) while maintaining control over its own defense, the
Trustee shall cooperate and consult fully with the Master Servicer in
preparing such defense; and
(iii) notwithstanding anything to the contrary in this
Section 7.11, the Trust shall not be liable for settlement of any such
claim by the Trustee entered into without the prior consent of the
Master Servicer, which consent shall not be unreasonably withheld.
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(b) The Trustee agrees to indemnify the Special Servicer and the
Master Servicer, and any director, officer, manager, member, employee or agent
thereof, and hold them harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments and any other costs,
liabilities, fees and expenses that either of them may sustain arising from or
as a result of the willful misfeasance, bad faith or negligence in the
performance of any of the Trustee's duties hereunder or by reason of negligent
disregard of the Trustee's obligations and duties hereunder, including a breach
of such obligations a substantial motive of which is to obtain an economic
advantage from being released from such obligations (unless such claim, loss,
penalty, fine, forfeiture, legal fees and related costs results from the willful
misfeasance, bad faith or negligence of such indemnified party), and if in any
such situation the Trustee is replaced, the parties hereto agree that the amount
of such claims, losses, penalties, fines, forfeitures, legal fees and related
costs, judgments and other costs, liabilities, fees and expenses shall at least
equal the incremental costs, if any, of retaining a successor Trustee. Each of
the Special Servicer and the Master Servicer shall immediately notify the
Trustee if a claim is made by a third party with respect to this Agreement, the
Certificates or any asset of the Trust Fund entitling the Special Servicer or
the Master Servicer to indemnification hereunder, whereupon the Trustee shall
assume the defense of any such claim (with counsel reasonably satisfactory to
the Special Servicer and the Master Servicer and pay all expenses in connection
therewith, including counsel fees, and promptly pay, discharge and satisfy any
judgment or decree that may be entered against it or them in respect of such
claim. Any failure to so notify the Trustee shall not affect any rights the
Special Servicer or the Master Servicer may have to indemnification under this
Agreement or otherwise, unless the Trustee's defense of such claim is materially
prejudiced thereby and the Trustee delivers a certification explaining the
prejudice.
The provisions of this Section 7.11 shall survive any termination of this
Agreement, the resignation or removal of the Trustee and the resignation or
removal of the Master Servicer.
SECTION 7.12. FEES AND EXPENSES OF TRUSTEE. Monthly, the Trustee
shall be entitled to receive the Trustee Fee (which shall not be limited by any
provision of law with respect to the compensation of a trustee of an express
trust), for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee. On or before the Master Servicer Remittance Date in
each month (commencing in May 1999), the Master Servicer shall, pursuant to
Section 5.2(a), remit to the Trustee for deposit in the Distribution Account
that portion of funds then on deposit in the Collection Account that are
allocable to cover the Trustee Fees, and the Trustee shall be entitled to
withdraw such portion from the Distribution Account to pay itself its unpaid
Trustee Fees. The Trustee shall also be entitled to recover from the Trust all
reasonable unanticipated expenses and disbursements incurred or made by the
Trustee in accordance with any of the provisions of this Agreement (including
the reasonable compensation and the reasonable expenses and disbursements of its
outside counsel and other Persons not regularly in its employ), not including
expenses incurred in the ordinary course of performing its duties as Trustee
hereunder, and except any such expense, disbursement or advance as may arise
from its negligence or bad faith or which is the responsibility of the Holders
of the Certificates hereunder. The provisions of this Section 7.12 shall survive
any termination of this Agreement and the resignation or removal of the Trustee.
SECTION 7.13. COLLECTION OF MONEYS. Except as otherwise expressly
provided in this Agreement, the Trustee may demand payment or delivery of, and
shall receive and collect, all money and other property payable to or receivable
by the Trustee pursuant to this Agreement. The Trustee shall hold all such money
and property received by it as part of the Trust and shall distribute it as
provided in this Agreement. If the Trustee shall not have timely received
amounts to be remitted with respect to the Mortgage Loans from the Master
Servicer, the Trustee shall request the Master Servicer to make such
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distribution as promptly as practicable or legally permitted. If the Trustee
shall subsequently receive any such amount, it may withdraw such request.
SECTION 7.14. NOTIFICATION TO HOLDERS. Upon termination of the
Master Servicer or appointment of a successor to the Master Servicer, the
Trustee shall promptly mail notice thereof by first class mail to the Rating
Agencies and the Certificateholders at their respective addresses appearing on
the Certificate Register.
SECTION 7.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE.
(a) The Trustee hereby represents and warrants as of the Closing
Date that:
(i) The Trustee is a national banking association, duly
organized, validly existing and in good standing under the laws
governing its creation and existence and has full corporate power and
authority to own its property, to carry on its business as presently
conducted, and to enter into and perform its obligations under this
Agreement;
(ii) The execution and delivery by the Trustee of this
Agreement have been duly authorized by all necessary corporate action on
the part of the Trustee; neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated in this
Agreement, nor compliance with the provisions of this Agreement, will
conflict with or result in a breach of, or constitute a default under,
(A) any of the provisions of any law, governmental rule, regulation,
judgment, decrees or order binding on the Trustee or its properties that
would materially and adversely affect the Trustee's ability to perform
its obligations under this Agreement, (B) the organizational documents
of the Trustee, or (C) the terms of any material agreement or instrument
to which the Trustee is a party or by which it is bound; the Trustee is
not in default with respect to any order or decree of any court or any
order, regulation or demand of any federal, state, municipal or other
governmental agency, which default would materially and adversely affect
its performance under this Agreement;
(iii) The execution, delivery and performance by the
Trustee of this Agreement and the consummation of the transactions
contemplated by this Agreement do not require the consent, approval,
authorization or order of, the giving of notice to or the registration
with any state, federal or other governmental authority or agency,
except such as has been or will be obtained, given, effected or taken in
order for the Trustee to perform its obligations under this Agreement;
(iv) This Agreement has been duly executed and delivered
by the Trustee and, assuming due authorization, execution and delivery
by the other parties hereto, constitutes a valid and binding obligation
of the Trustee, enforceable against the Trustee in accordance with its
terms, subject, as to enforcement of remedies, (A) to applicable
bankruptcy, reorganization, insolvency, moratorium and other similar
laws affecting creditors' rights generally as from time to time in
effect, (B) to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
(C) to public policy considerations underlying the securities laws to
the extent that such considerations limit the enforceability of the
provisions of this Agreement that purport to provide for indemnification
for securities law violations; and
(v) No litigation is pending or, to the best of the
Trustee's knowledge, threatened, against the Trustee that, either in one
instance or in the aggregate, would draw into question the validity of
this Agreement, or the outcome of which could reasonably be expected to
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materially and adversely affect the execution, delivery and performance
by, or the enforceability against, the Trustee of this Agreement or the
ability of the Trustee to perform under the terms of this Agreement.
(vi) The Trustee covenants that by December 31, 1999, any
custom-made software or hardware designed or purchased or licensed by it
and used by it in the course of the operation or management of, or the
compiling, reporting or generation of, data required by this Agreement
will be capable of identifying correctly or performing calculations or
other processing accurately with respect to dates after December 31,
1999.
SECTION 7.16. RESERVED.
SECTION 7.17. RESERVED.
SECTION 7.18. IMPACT OF YEAR 2000 COMPLIANCE.
(a) Any type of difficulties or problems that may be encountered
by the Trustee related in any way to the manipulation of dates in 1999, 2000 or
later, or otherwise related to such party not being Year 2000 ready, shall not
in any way relieve such party of its obligations or liabilities under this
Agreement.
ARTICLE VIII.
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
SECTION 8.1. SERVICING STANDARD; GENERAL POWERS AND DUTIES.
(a) Each of the Master Servicer and the Special Servicer shall
service and administer the Mortgage Loans and other assets of the Trust that it
is obligated to service and administer pursuant to this Agreement on behalf of
the Trust and in the best interests of and for the sole benefit of the
Certificateholders (as determined by the Master Servicer or the Special
Servicer, as the case may be, in its good faith and reasonable judgment), in
accordance with applicable law, the terms of this Agreement and the terms of the
respective Mortgage Loans and, to the extent consistent with the foregoing,
further as follows: (i) with the same care, skill, prudence and diligence as is
normal and usual in its general mortgage servicing and property management
activities on behalf of third parties (giving due consideration to customary
industry standards) or on behalf of itself, whichever is higher, with respect to
mortgage loans and REO properties that are comparable to those for which it is
responsible hereunder; (ii) with a view to the timely collection of all
scheduled payments of principal and interest under the Mortgage Loans or, if a
Mortgage Loan comes into and continues in default and if, in the good faith and
reasonable judgment of the Special Servicer, no satisfactory arrangements can be
made for the collection of the delinquent payments, the maximization of the
recovery on such Mortgage Loan to the Certificateholders (as a collective whole)
on a net present value basis (the relevant discounting of anticipated
collections that will be distributable to Certificateholders to be performed at
the relevant Net Mortgage Rate); and (iii) without regard to (A) any
relationship that the Master Servicer or the Special Servicer, as the case may
be, or any Affiliate thereof may have with the related Mortgagor, the Depositor,
either Seller, or other servicer of the Mortgage Loans, (B) the ownership of any
Certificate by the Master Servicer or the Special Servicer, as the case may be,
or by any Affiliate thereof, (C) the Master Servicer's
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obligation to make Advances, (D) the Special Servicer's obligation to make (or
to direct the Master Servicer to make) Servicing Advances, (E) the right of the
Master Servicer (or any Affiliate thereof) or the Special Servicer (or any
Affiliate thereof), as the case may be, to receive reimbursement of costs, or
the sufficiency of any compensation payable to it, hereunder or with respect to
any particular transaction, (F) the ownership, servicing or management for
others of any other mortgage loans or mortgaged property; and (G) any obligation
of the Master Servicer or the Special Servicer, as the case may be (as a seller
or an Affiliate of a seller of the Mortgage Loans), to pay any indemnity with
respect to, or repurchase, any Mortgage Loan (the conditions set forth in the
immediately foregoing clauses (i), (ii) and (iii), the "SERVICING STANDARD").
Without limiting the generality of the foregoing, each of the Master Servicer
and the Special Servicer, in its own name, in connection with its servicing and
administrative duties hereunder is hereby authorized and empowered by the
Trustee to exercise all efforts consistent with the foregoing standard and to
execute and deliver, on behalf of the Certificateholders and the Trustee or any
of them, any and all financing statements, continuation statements and other
documents or instruments necessary to maintain the lien created by any Mortgage
or other security document in the related Mortgage File on the related Mortgaged
Property and related collateral; subject to Section 8.18, any and all
modifications, waivers, amendments or consents to or with respect to any
documents contained in the related Mortgage File; and any and all instruments of
satisfaction or cancellation, or of full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties. Subject to Section 8.18, each of the Master Servicer and the Special
Servicer is also authorized to approve a request by a Mortgagor under a Mortgage
Loan that it is obligated to service and administer pursuant to this Agreement,
for an easement, consent to alteration or demolition, and for other similar
matters, provided that the Master Servicer or the Special Servicer, as the case
may be, determines, exercising its good faith business judgment in the same
manner as it would if it were the owner of the related Mortgage Loan, that such
approval will not affect the security for, or the timely and full collectability
of, the related Mortgage Loan. Subject to Section 8.8, the Trustee shall
furnish, or cause to be furnished, to the Master Servicer and the Special
Servicer any powers of attorney and other documents necessary or appropriate to
enable the Master Servicer or the Special Servicer, as the case may be, to carry
out its servicing and administrative duties hereunder; provided, however, that
the Trustee shall not be held liable for any negligence with respect to, or
misuse of, any such power of attorney by the Master Servicer or the Special
Servicer, as the case may be.
(b) Except as otherwise expressly set forth herein with respect
to specific duties, the Master Servicer shall be responsible for the servicing
and administration of all the Mortgage Loans other than Specially Serviced
Mortgage Loans and REO Mortgage Loans, and the Special Servicer shall be
responsible for the servicing and administration of Specially Serviced Mortgage
Loans, REO Mortgage Loans and REO Properties. Subject to Section 8.1(a), the
Master Servicer and the Special Servicer shall each have full power and
authority, acting alone or, subject to Section 8.4, through Sub-Servicers, to do
or cause to be done any and all things in connection with such servicing and
administration that it may deem necessary or desirable.
(c) Upon determining that a Servicing Transfer Event has occurred
with respect to any Mortgage Loan and if the Master Servicer is not also the
Special Servicer, the Master Servicer shall promptly give notice thereof, and
deliver the related Servicing File, to the Special Servicer and shall use
reasonable efforts to provide the Special Servicer with all information,
documents (or copies thereof) and records (including records stored
electronically on computer tapes, magnetic discs and the like) relating to the
Mortgage Loan and reasonably requested by the Special Servicer to enable it to
assume its functions hereunder with respect thereto without acting through a
Sub-Servicer. The Master Servicer shall use reasonable efforts to comply with
the preceding sentence within five Business Days of the occurrence of each
related Servicing Transfer Event. The Special Servicer may, as to any delinquent
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Mortgage Loan, prior to the occurrence of a Servicing Transfer Event with
respect thereto, upon reasonable request, obtain the foregoing documents and
information.
Upon determining that a Specially Serviced Mortgage Loan has
become a Corrected Mortgage Loan and if the Master Servicer is not also the
Special Servicer, the Special Servicer shall promptly give notice thereof, and
return the related Servicing File, to the Master Servicer and upon giving such
notice, and returning such Servicing File, to the Master Servicer, the Special
Servicer's obligation to service such Mortgage Loan, and the Special Servicer's
right to receive the Special Servicing Fee with respect to such Mortgage Loan,
shall terminate, and the obligations of the Master Servicer to service and
administer such Mortgage Loan in accordance with this Agreement shall resume.
Notwithstanding other provisions in this Agreement to the
contrary, the Master Servicer shall remain responsible for the billing and
collection, accounting, data collection, reporting and other basic Master
Servicer administrative functions with respect to Specially Serviced Mortgage
Loans, provided that the Special Servicer shall establish procedures for the
Master Servicer as to the application of receipts and tendered payments and
shall have the exclusive responsibility for and authority over all contacts with
and notices to Mortgagors and similar matters relating to each Specially
Serviced Mortgage Loan and the related Mortgaged Property.
(d) The Master Servicer and Special Servicer will each be
required to service and administer each of the respective groups of
Cross-Collateralized Mortgage Loans as a single Mortgage Loan as and when it
deems necessary and appropriate, consistent with the Servicing Standard. If any
Cross-Collateralized Mortgage Loan becomes a Specially Serviced Mortgage Loan,
then each other Mortgage Loan with which it is cross-collateralized shall also
become a Specially Serviced Mortgage Loan. Similarly, no Cross-Collateralized
Mortgage Loan may subsequently become a Corrected Mortgage Loan, unless and
until all Servicing Transfer Events in respect of each other Mortgage Loan with
which it is cross-collateralized, are remediated or otherwise addressed as
contemplated above.
(e) Notwithstanding anything in this Agreement to the contrary,
in the event that the Master Servicer and the Special Servicer are the same
Person, all notices, certificates, information and consents required to be given
by the Master Servicer to the Special Servicer or vice versa shall be deemed to
be given without the necessity of any action on such Person's part.
(f) The relationship of each of the Master Servicer and the
Special Servicer to the Trustee and, unless the same Person acts in both
capacities, to each other under this Agreement is intended by the parties to be
that of an independent contractor and not of a joint venturer, partner or agent.
Unless the same person acts in both capacities, the Master Servicer shall have
no responsibility for the performance of the Special Servicer of its duties
under this Agreement, and the Special Servicer shall have no responsibility for
the performance of the Master Servicer under this Agreement.
SECTION 8.2. COLLECTION OF MORTGAGE LOAN PAYMENTS.
(a) The Master Servicer (or the Special Servicer with respect to
the Specially Serviced Mortgage Loans) shall, in accordance with the Servicing
Standard, make reasonable efforts to collect all payments called for under the
terms and provisions of the Mortgage Loans, and shall follow procedures which
are consistent with the Servicing Standard; provided, however, that nothing
herein contained shall be construed as an express or implied guarantee by the
Master Servicer or the Special Servicer of the collectability of the Mortgage
Loans. Consistent with the foregoing, the Master Servicer may in its discretion
waive any Penalty Charge in connection with any delinquent payment on a Mortgage
Loan (other than a Specially Serviced Mortgage Loan) and the Special Servicer
may in its
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discretion waive any Penalty Charge in connection with any delinquent payment on
a Specially Serviced Mortgage Loan.
(b) With respect to each Mortgage Loan, if any Lock-Box Agreement
or similar agreement is required by the terms of the related Mortgage, the
Master Servicer shall establish and maintain one or more accounts ("LOCK-BOX
ACCOUNTS") to be held outside the Trust and maintained by the Master Servicer in
accordance with the terms of the related Mortgage. Subject to the terms of the
related Mortgage, any Lock-Box Agreement or similar agreement, Lock-Box Accounts
shall be Eligible Accounts. The Master Servicer shall apply the funds deposited
in such accounts in accordance with the terms of the related Mortgage, any
Lock-Box Agreement and/or any similar agreement and in accordance with the
Servicing Standard.
(c) So long as the related Mortgage Note has not been
accelerated, the Master Servicer and the Special Servicer shall not take any
enforcement action other than requests for payment with respect to payment of
Excess Interest or principal in excess of the principal component of the Monthly
Payment prior to the final maturity date. The Master Servicer will also be
permitted to forgive the payment of Excess Interest under the circumstances set
forth in Section 8.18.
(d) The Master Servicer shall on each Distribution Date make
payment to the holder of the Retained Interest in an amount equal to the
interest increase described in the last sentence of Section 2.1(a). In the event
that the amount collected by the Master Servicer or Special Servicer, as
applicable, in respect of the Santa ▇▇▇▇▇ ▇▇▇▇ Mortgage Loan for any Collection
Period is less than the interest portion of the Monthly Payment payable in
respect thereof, the amount represented by the Retained Interest shall be
subordinated to the portion of such Mortgage Loan held by the Trust Fund.
SECTION 8.3. COLLECTION OF TAXES, ASSESSMENTS AND SIMILAR ITEMS;
SERVICING ACCOUNTS AND RESERVE ACCOUNTS.
(a) The Master Servicer shall establish and maintain one or more
accounts (the "SERVICING ACCOUNTS") into which all Escrow Payments shall be
deposited and retained. Subject to the terms of the related Mortgage Note and
Mortgage, Servicing Accounts shall be Eligible Accounts. Withdrawals of amounts
so collected in respect of any Mortgage Loan (and interest earned thereon) from
a Servicing Account may be made only to: (i) effect payment of real estate
taxes, assessments, insurance premiums, ground rents (if applicable) and
comparable items in respect of the related Mortgaged Property; (ii) reimburse
the Master Servicer, the Special Servicer or the Trustee, as applicable, for any
unreimbursed Servicing Advances and unreimbursed Advance Interest made thereby
to cover any of the items described in the immediately preceding clause (i);
(iii) refund to the related Mortgagor any sums as may be determined to be
overages; (iv) pay interest, if required and as described below, to the related
Mortgagor on balances in the Servicing Account (or, if and to the extent not
payable to the related Mortgagor, to pay such interest to the Master Servicer);
or (v) clear and terminate the Servicing Account at the termination of this
Agreement in accordance with Section 10.1. As part of its servicing duties, the
Master Servicer shall pay or cause to be paid to the Mortgagors interest on
funds in Servicing Accounts maintained thereby, to the extent required by law or
the terms of the related Mortgage Loan, and otherwise may retain such amounts.
(b) The Master Servicer shall (i) maintain accurate records with
respect to each related Mortgaged Property reflecting the status of real estate
taxes, assessments and other similar items that are or may become a lien thereon
and the status of insurance premiums and any ground rents payable in respect
thereof and (ii) use reasonable efforts to obtain, from time to time, all bills
for the payment of such items (including renewal premiums); and the Master
Servicer shall effect payment thereof (in the
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case of Specially Serviced Mortgage Loans, at the direction of the Special
Servicer) prior to the applicable penalty or termination date, employing for
such purpose Escrow Payments as allowed under the terms of the related Mortgage
Loan. To the extent that a Mortgage Loan does not require a Mortgagor to escrow
for the payment of real estate taxes, assessments, insurance premiums, ground
rents (if applicable) and similar items, the Master Servicer (or the Special
Servicer with respect to the Specially Serviced Mortgaged Loans) shall use
efforts consistent with the Servicing Standard to cause the related Mortgagor to
comply with the requirements of the related Mortgage for payments in respect of
such items at the time they first become due.
(c) In accordance with the Servicing Standard, the Master
Servicer (at the direction of the Special Servicer in the case of Specially
Serviced Mortgage Loans) shall, subject to Section 4.4, advance with respect to
each related Mortgaged Property all such funds as are necessary for the purpose
of effecting the payment of (i) real estate taxes, assessments and other similar
items that are or may become a lien thereon, (ii) ground rents (if applicable),
and (iii) premiums on Insurance Policies, in each instance if and to the extent
that Escrow Payments, if any, collected from the related Mortgagor are
insufficient to pay such item when due and the related Mortgagor has failed to
pay such item on a timely basis. All such advances shall be reimbursable in the
first instance from related collections from the Mortgagors, and further as
provided in Section 5.2. No costs incurred by the Master Servicer or the Special
Servicer in effecting the payment of real estate taxes, assessments, ground
rents (if applicable) and other similar items on or in respect of the Mortgaged
Properties shall, for purposes hereof, including, without limitation,
calculating monthly distributions to Certificateholders, be added to the unpaid
principal balances of the related Mortgage Loans, notwithstanding that the terms
of such Mortgage Loans so permit.
(d) The Master Servicer shall establish and maintain, as
applicable, one or more accounts (the "RESERVE ACCOUNTS"), into which all
Reserve Funds, if any, shall be deposited and retained. Withdrawals of amounts
so deposited may be made to pay for, or to reimburse the related Mortgagor in
connection with, the related repairs, environmental remediation, replacements,
capital improvements and/or similar items at the related Mortgaged Property if
such repairs, environmental remediation, replacements, capital improvements
and/or similar items have been completed, and such withdrawals are made, in
accordance with the Servicing Standard and the terms of the related Mortgage
Note, Mortgage and any agreement with the related Mortgagor governing such
Reserve Funds. Subject to the terms of the related Mortgage Note and Mortgage,
all Reserve Accounts shall be Eligible Accounts. Within 6 months of the Closing
Date, the Master Servicer shall deliver a report to the Special Servicer and the
Depositor setting forth the status of each of the Reserve Accounts established
for a specified purpose and fully funded on the Closing Date and the actions
taken in respect of the purposes for which such Reserve Accounts were
established and any recommendations in respect thereof.
SECTION 8.4. SUB-SERVICING AGREEMENTS.
(a) The Master Servicer and the Special Servicer may each enter
into Sub-Servicing Agreements for the servicing and administration of all or a
part of the Mortgage Loans for which it is responsible hereunder, provided that,
in each case, the Sub-Servicing Agreement: (i) is not inconsistent with this
Agreement and shall provide that the Sub-Servicer shall maintain errors and
omissions insurance and fidelity bond coverage as required of the Master
Servicer or the Special Servicer under Section 8.5 hereof, (ii) provides that if
the Master Servicer or the Special Servicer, as the case may be, shall for any
reason no longer be the Master Servicer or Special Servicer, as applicable,
hereunder (including, without limitation, by reason of an Event of Default and
its termination hereunder), the Trustee or its designee may thereupon assume all
of the rights and, except to the extent they arose prior
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to the date of assumption, obligations of the Master Servicer or the Special
Servicer, as the case may be, under such agreement or, alternatively, may
terminate such agreement without payment of any termination fee or penalty out
of the Trust; (iii) in the case of a Sub-Servicing Agreement entered into by the
Master Servicer, expressly or effectively provides that (if the Master Servicer
and the Special Servicer are not the same Person) such agreement shall terminate
with respect to any Mortgage Loan serviced thereunder at the time such Mortgage
Loan becomes a Specially Serviced Mortgage Loan (provided that such agreement
may provide that such Mortgage Loan may again be serviced thereunder if it
becomes a Corrected Mortgage Loan); (iv) in the case of a Sub-Servicing
Agreement entered into by the Special Servicer, relates only to Specially
Serviced Mortgage Loans or REO Properties and expressly or effectively provides
that (if the Master Servicer and the Special Servicer are not the same Person)
such agreement shall terminate with respect to any such Mortgage Loan that
becomes a Corrected Mortgage Loan; (v) provides that the Trustee for the benefit
of the Certificateholders shall be a third party beneficiary under such
Sub-Servicing Agreement, but that (except to the extent the successor to the
Master Servicer or Special Servicer, as applicable (including the Trustee or its
designee) assumes the obligations of the Master Servicer or the Special
Servicer, as the case may be, thereunder as contemplated by the immediately
preceding clause (ii)) none of the Trust Fund, the Trustee, any successor Master
Servicer or Special Servicer (unless and to the extent that the successor Master
Servicer or the Special Servicer is a party to such Sub-Servicing Agreement), as
the case may be, or any Certificateholder shall have any duties under such
Sub-Servicing Agreement or any liabilities arising therefrom; (vi) permits any
purchaser of a Mortgage Loan pursuant to this Agreement to terminate such
Sub-Servicing Agreement with respect to such purchased Mortgage Loan at its
option and without penalty and (vii) does not permit the Sub-Servicer any direct
rights of indemnification that may be satisfied out of assets of the Trust Fund.
References in this Agreement to actions taken or to be taken by the Master
Servicer or the Special Servicer, as the case may be, include actions taken or
to be taken by a Sub-Servicer on behalf of the Master Servicer or the Special
Servicer, as the case may be; and, in connection therewith, all amounts advanced
by any Sub-Servicer to satisfy the obligations of the Master Servicer or the
Special Servicer, as the case may be, hereunder to make Servicing Advances and
P&I Advances shall be deemed to have been advanced by the Master Servicer or the
Special Servicer, as the case may be, out of its own funds. For purposes of this
Agreement, the Master Servicer and the Special Servicer each shall be deemed to
have received any payment when the Sub-Servicer receives such payment. Annually,
in connection with the delivery of the Officer's Certificate contemplated in
Section 8.12, the Master Servicer and the Special Servicer each shall identify
to the other, the Trustee and the Depositor any Sub-Servicers then retained
thereby.
(b) Each Sub-Servicer shall be authorized to transact business in
the state or states in which the Mortgaged Properties securing the Mortgage
Loans it is to service are situated, if and to the extent required by applicable
law.
(c) As part of its servicing activities hereunder, the Master
Servicer and the Special Servicer, for the benefit of the Trustee and the
Certificateholders, shall (at no expense to the Trustee, the Certificateholders
or the Trust Fund) monitor the performance and enforce the obligations of each
Sub-Servicer retained by it under the related Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing Agreements in accordance with their respective
terms and the pursuit of other appropriate remedies, shall be in such form and
carried out to such an extent and at such time as the Master Servicer or the
Special Servicer, as the case may be, would require were it the owner of the
Mortgage Loans. Subject to the terms of the applicable Sub-Servicing Agreement,
the Master Servicer and the Special Servicer each shall have the right to remove
a Sub-Servicer retained by it at any time it considers such removal to be in the
best interests of Certificateholders.
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(d) In the event the Trustee or its designee assumes the rights
and obligations of the Master Servicer or the Special Servicer under any
Sub-Servicing Agreement, the Master Servicer or the Special Servicer, as the
case may be, at its expense shall, upon request of the Trustee, deliver to the
assuming party all documents and records relating to such Sub-Servicing
Agreement and the Mortgage Loans then being serviced thereunder and an
accounting of amounts collected and held on behalf of it thereunder, and
otherwise use reasonable efforts to effect the orderly and efficient transfer of
the Sub-Servicing Agreement to the assuming party.
(e) Notwithstanding any Sub-Servicing Agreement, the Master
Servicer and the Special Servicer each shall remain obligated and liable to the
Trustee and the Certificateholders for the servicing and administration of the
Mortgage Loans in accordance with the provisions of this Agreement to the same
extent and under the same terms and conditions as if it alone were servicing and
administering the Mortgage Loans for which it is responsible. In addition, the
Special Servicer shall enter into a Sub-Servicing Agreement with a Sub-Servicer
only after having determined in good faith that such Sub-Servicer has experience
in conducting servicing activities similar to those contemplated in this
Agreement, and the Special Servicer shall monitor the performance of such
Sub-Servicer to ensure that it performs such servicing activities in a manner
consistent with the standards set forth in this Agreement. The Special Servicer
shall notify the Rating Agencies of any Sub-Servicing Agreement entered into
pursuant to the provisions of this Section 8.4. The Master Servicer or the
Special Servicer, as applicable, shall indemnify the Trust Fund against any
loss, damage or liability arising by reason of the willful misfeasance, bad
faith or negligence in the performance of duties by any Sub-Servicer appointed
by it or by reason of negligent disregard by such Sub-Servicer of obligations
and duties under this Agreement and such Sub-Servicing Agreement.
(f) Notwithstanding anything to the contrary contained herein,
neither the Master Servicer nor the Special Servicer shall have the right to
delegate to any Sub-Servicer any right granted to the Master Servicer or the
Special Servicer, as applicable, hereunder to modify or foreclose upon any
Mortgage Loan.
(g) The fees of a Sub-Servicer shall be the obligation of the
Master Servicer or the Special Servicer, as applicable, that entered into the
related Sub-Servicing Agreement, and the Trust Fund shall not bear any such fees
or any termination fee payable to any Sub-Servicer as a result of the
Sub-Servicer's termination.
SECTION 8.5. MAINTENANCE OF INSURANCE POLICIES; ERRORS AND
OMISSIONS AND FIDELITY COVERAGE.
(a) 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. If a Mortgagor fails to maintain
such insurance, the Master Servicer or the Special Servicer in the case of
Specially Serviced Mortgage Loans, shall (to the extent available at
commercially reasonable rates) 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))
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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 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 Mortgagor to
maintain a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration in an amount representing
coverage of not less than the least of (i) the unpaid principal balance of the
related Mortgage Loan, (ii) the full insurable value of such Mortgaged Property,
(iii) 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, and (iv) 100% of the
replacement cost of the improvements on such Mortgaged Property. If (i) 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) the terms of
the Mortgage Loan permit the mortgagee to require the Mortgagor to obtain 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 in the case of Specially Serviced Mortgage Loans, shall obtain
such insurance (to the extent available at commercially reasonable rates), and
the cost of such insurance shall be a Servicing Advance recoverable by the
Master Servicer, or the Special Servicer in the case of Specially Serviced
Mortgage Loans, pursuant to Section 5.2. The Special Servicer shall cause to be
maintained for each REO Property no less insurance coverage than was previously
required of the Mortgagor under the related Mortgage.
All such insurance policies shall contain a "standard" mortgagee
clause or shall identify the Trustee as the named insured, as applicable, with
any 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.
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 Mortgagor, 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, subject to withdrawal pursuant to Section
5.2. Any cost incurred by the Master Servicer or the Special Servicer in
maintaining any such insurance shall not, for purposes hereof, including,
without limitation, calculating monthly distributions to Certificateholders, be
added to the outstanding principal balance of the related Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so permit.
(b) (i) If the Master Servicer or the Special Servicer, as
applicable, causes any Mortgaged Property or REO Property to be covered by a
blanket insurance policy, which provides protection equivalent to the individual
policies otherwise required, the Master Servicer or Special Servicer will
conclusively be deemed to have satisfied its respective obligations to cause
hazard insurance to be maintained on such Mortgaged Properties or REO
Properties. Such policy may contain a deductible clause, in which case the
Master Servicer or the Special Servicer, as applicable, will 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) a loss occurs that would have been covered by such a policy had it been
maintained, immediately deposit into the Collection Account
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(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 blanket 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.
(ii) If the Master Servicer or the Special Servicer, as
applicable, causes any Mortgaged Property or REO Property to be covered by a
master force placed insurance policy, which 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 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 at least equal to the coverage that would be required by FNMA
or FHLMC, whichever is greater, with respect to the Master Servicer or Special
Servicer, as the case may be, if the Master Servicer or 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. 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
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
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Rating Agencies or (B) who are (as evidenced by the receipt of Rating Agency
Confirmation) otherwise acceptable to each Rating Agency.
SECTION 8.6. ENFORCEMENT OF DUE-ON-SALE CLAUSES; ASSUMPTION
AGREEMENTS; SUBORDINATE FINANCING.
(a) If any Mortgage Loan contains a provision in the nature of a
"due-on-sale" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the
mortgagee's option) become due and payable upon the sale or other
transfer of an interest in the related Mortgaged Property; or
(ii) provides that such Mortgage Loan may not be assumed
without the consent of the mortgagee in connection with any such sale or
other transfer,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Special Servicer, on behalf of the Trustee as the mortgagee of record, shall
exercise (or, subject to Section 8.18(a), waive its right to exercise) any right
it may have with respect to such Mortgage Loan (x) to accelerate the payments
thereon, or (y) to withhold its consent to any such sale or other transfer, in a
manner consistent with the Servicing Standard; provided, however, that if the
Mortgaged Property to be sold or transferred relates to a Mortgage Loan (I) that
constitutes 5% or more of the Stated Principal Balance of all the Mortgage Loans
(taking into account for the purposes of such calculation, (a) in the case of
any such Mortgage Loan that is a Cross-Collateralized Mortgage Loan, any
Mortgage Loan with which it is cross-collateralized and (b) in the case of any
such Mortgage Loan with respect to which the related Mortgagor or its affiliate
is a Mortgagor with respect to one or more other Mortgage Loans, such other
Mortgage Loan or Mortgage Loans), then any such sale or transfer shall require
Rating Agency Confirmation from S&P, and (II) that is one of the ten largest
Mortgage Loans in the Trust Fund (based on its then unpaid principal balance,
and calculated as set forth in clauses (a) and (b) above), then any such sale or
transfer shall require Rating Agency Confirmation from Fitch. In the event that
the Special Servicer intends or is required, in accordance with the preceding
sentence, the Mortgage Loan documents or applicable law, to permit the transfer
of any Mortgaged Property, the Special Servicer, if consistent with the
Servicing Standard, may enter into a substitution of liability agreement,
pursuant to which the original Mortgagor and any original guarantors are
released from liability, and the transferee and any new guarantors are
substituted therefor and become liable under the Mortgage Note and any related
guaranties. In connection with any such transfer and substitution, the Special
Servicer may require from the related Mortgagor a reasonable and customary fee
for the additional services performed by it, together with reimbursement for any
related costs and expenses incurred by it (but only to the extent that charging
such fee will not be a significant modification of the Mortgage Loan for
purposes of the REMIC Provisions or result in an Adverse REMIC Event in respect
of any REMIC Pool). The Special Servicer shall promptly notify the Trustee and
the Master Servicer of any such agreement and forward the original thereof to
the Trustee for inclusion in the related Mortgage File (with a copy to the
Master Servicer and the Rating Agencies). In connection with the Rating Agency
Confirmation, the Special Servicer shall prepare and deliver to the Rating
Agencies a memorandum outlining its analysis and recommendation in accordance
with the Servicing Standard, together with copies of all relevant documentation.
The Special Servicer shall also prepare and provide the Rating Agencies with
such memorandum and documentation for all transfer, assumption and encumbrance
consents granted for Mortgage Loans that constitute less than 2% of the Stated
Principal Balance of all of the Mortgage Loans (taking into account clauses (a)
and (b)
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above), but for which the Special Servicer's decision will be sufficient and a
Rating Agency Confirmation will not be required.
(b) If any Mortgage Loan contains a provision in the nature of
a "due-on-encumbrance" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at the
mortgagee's option) become due and payable upon the creation of any
additional lien or other encumbrance on the related Mortgaged Property;
or
(ii) requires the consent of the mortgagee to the creation
of any such additional lien or other encumbrance on the related
Mortgaged Property,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Special Servicer, on behalf of the Trustee as the mortgagee of record, shall
exercise (or, subject to Section 8.18(a)(ii), waive its right to exercise) any
right it may have with respect to such Mortgage Loan (x) to accelerate the
payments thereon, or (y) to withhold its consent to the creation of any such
additional lien or other encumbrance, in a manner consistent with the Servicing
Standard; provided, however, that any such waiver shall require Rating Agency
Confirmation.
(c) Nothing in this Section 8.6 shall constitute a waiver of the
Trustee's right, as the mortgagee of record, to receive notice of any assumption
of a Mortgage Loan, any sale or other transfer of the related Mortgaged Property
or the creation of any additional lien or other encumbrance with respect to such
Mortgaged Property.
(d) Except as otherwise permitted by Section 8.18, neither the
Master Servicer nor the Special Servicer shall agree to modify, waive or amend
any term of any Mortgage Loan in connection with the taking of, or the failure
to take, any action pursuant to this Section 8.6.
(e) In the event that a Mortgagor elects to obtain a release of
the related Mortgaged Property from the lien of the related Mortgage by pledging
defeasance collateral in accordance with the terms of the Mortgage Note, then
the Master Servicer shall, in accordance with the terms of such Mortgage Note,
obtain reasonable assurance that the Certificates will not be subject to a
downgrade, withdrawal or qualification, if applicable, by the Rating Agencies as
a result of such defeasance and that any related expenses will be paid for by
the Mortgagor. In addition, to the extent permitted by the Mortgage Loan
documents or applicable law, the Master Servicer shall require an Opinion of
Counsel (which shall be at the expense of the Mortgagor) to the effect that such
defeasance will not cause an Adverse REMIC Event.
(f) The Master Servicer shall not be required to establish and
maintain on behalf of the Mortgagor a single purpose bankruptcy-remote entity in
connection with the defeasance of a Mortgage Loan. The out-of-pocket expenses
incurred by the Master Servicer with respect to a defeasance if not required to
be paid by the Mortgagor shall constitute a Servicing Advance.
SECTION 8.7. REALIZATION UPON DEFAULTED MORTGAGE LOANS.
(a) The Master Servicer shall notify the Special Servicer of the
occurrence of a Servicing Transfer Event in respect of any Mortgage Loan and,
subject to Section 8.18, the Special Servicer shall monitor such Mortgage Loan,
evaluate whether the causes of any default thereunder can be corrected over a
reasonable period without significant impairment of the value of the related
Mortgaged
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Property, initiate corrective action in cooperation with the Mortgagor if, in
the Special Servicer's reasonable and good faith judgment, cure is likely, and
take such other actions as are consistent with the Servicing Standard. If, in
the Special Servicer's reasonable and good faith judgment, such corrective
action has been unsuccessful, no satisfactory arrangement can be made for
collection of delinquent payments and no other alternative consistent with the
Servicing Standard can be negotiated, and the defaulted Mortgage Loan has not
been released from the Trust Fund pursuant to any provision hereof, then the
Special Servicer shall, subject to subsections (b) through (d) of this Section
8.7, exercise reasonable efforts, consistent with the Servicing Standard, to
foreclose upon or otherwise comparably convert (which may include an REO
Acquisition) the ownership of property securing such Mortgage Loan. The
foregoing is subject to the provision that, in any case in which a Mortgaged
Property shall have suffered damage from an Uninsured Cause, the Master Servicer
and the Special Servicer shall each have the right but not the obligation to
expend its own funds as a Servicing Advance toward the restoration of such
property if it shall determine in its reasonable discretion (i) that such
restoration will increase, on a net present value basis, the net proceeds of
liquidation of such Mortgaged Property to Certificateholders after reimbursement
to itself for such Advances (together with Advance Interest), and (ii) that such
Advances (together with Advance Interest) will be recoverable by the Master
Servicer or Special Servicer, as the case may be, out of the proceeds of
liquidation of such Mortgaged Property, as contemplated in Section 5.2. The
Special Servicer (or, at the direction of the Special Servicer, the Master
Servicer) shall be responsible for all other costs and expenses incurred by it
in any such proceedings, subject to its being entitled to reimbursement therefor
as a Servicing Advance as provided in Section 4.2 or Section 5.2, and further
subject to its being entitled to pay out of the related Liquidation Proceeds any
Liquidation Expenses incurred in respect of any Mortgage Loan, which Liquidation
Expenses were outstanding at the time such proceeds are received. When
applicable state law permits the Special Servicer to select between judicial and
non-judicial foreclosure in respect of any Mortgaged Property, the Special
Servicer shall make such selection in a manner consistent with the Servicing
Standard. Nothing contained in this Section 8.7 shall be construed so as to
require the Special Servicer, on behalf of the Trust Fund, to make a bid on any
Mortgaged Property at a foreclosure sale or similar proceeding that is in excess
of the fair market value of such property, as determined by the Special Servicer
in its sole judgment taking into account, among other things, the physical
condition of the Mortgaged Property, the state of the local economy, the Trust's
obligation to dispose of any REO Property within the period specified in Section
8.19, and the results of any Appraisal obtained pursuant to this Agreement, all
such bids to be made in a manner consistent with the Servicing Standard. If and
when the Master Servicer or the Special Servicer deems it necessary and prudent
for purposes of establishing the fair market value of any Mortgaged Property
securing a defaulted Mortgage Loan, whether for purposes of bidding at
foreclosure or otherwise, the Special Servicer is authorized to have an
Appraisal performed with respect to such property (the cost of which Appraisal
shall be covered by, and be reimbursable as, a Servicing Advance).
(b) The Special Servicer shall not acquire any personal property
pursuant to this Section 8.7 (with the exception of cash or cash equivalents
pledged as collateral for a Mortgage Loan) unless either:
(i) such personal property is incident to real property
(within the meaning of Section 856(e)(1) of the Code) so acquired by the
Special Servicer; or
(ii) the Special Servicer shall have obtained an Opinion
of Counsel (the cost of which may be withdrawn from the Collection
Account pursuant to Section 5.2) to the effect that the holding of such
personal property by the Trust Fund will not cause the imposition of a
tax on the Trust Fund or any REMIC Pool under the REMIC Provisions or
cause any of REMIC
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I, REMIC II or REMIC III to fail to qualify as a REMIC at any time that
any Certificate is outstanding.
(c) Notwithstanding the foregoing provisions of this Section 8.7,
neither the Master Servicer nor the Special Servicer shall, on behalf of the
Trustee, complete foreclosure proceedings, obtain title to a Mortgaged Property
in lieu of foreclosure or otherwise, have a receiver of rents appointed with
respect to any Mortgaged Property, or take any other action with respect to any
Mortgaged Property, if, as a result of any such action, the Trustee, on behalf
of the Certificateholders, would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of CERCLA or any comparable law, unless
(as evidenced by an Officer's Certificate to such effect delivered to the
Trustee) the Special Servicer has previously received an Environmental
Assessment in respect of such Mortgaged Property prepared (within the prior
three-month period) by a Person who regularly conducts Environmental Assessments
and the Special Servicer, based solely (as to environmental matters and related
costs) on the information set forth in such Environmental Assessment, determines
that:
(i) the Mortgaged Property is in compliance with
applicable Environmental Laws or, if not, that acquiring such Mortgaged
Property and taking such actions as are necessary to bring the Mortgaged
Property in compliance therewith is reasonably likely to produce a
greater recovery to Certificateholders on a net present value basis than
not acquiring such Mortgaged Property and not taking such actions; and
(ii) there are no circumstances or conditions present at
the Mortgaged Property relating to the use, management or disposal of
Hazardous Materials for which investigations, testing, monitoring,
containment, clean-up or remediation could be required under any
applicable environmental laws and regulations or, if such circumstances
or conditions are present for which any such action could be required,
that acquiring such Mortgaged Property and taking such actions with
respect to such Mortgaged Property is reasonably likely to produce a
greater recovery to Certificateholders on a net present value basis than
not acquiring such Mortgaged Property and not taking such actions.
The cost of any such Environmental Assessment, as well as the cost of any
remedial, corrective or other further action contemplated by clause (i) and/or
clause (ii) of the preceding paragraph, may be withdrawn from the Collection
Account by the Master Servicer as an expense of the Trust pursuant to Section
5.2; and if any such Environmental Assessment so warrants, the Special Servicer
shall, at the expense of the Trust payable out of the Collection Account
pursuant to Section 5.2, perform such additional environmental testing as is
consistent with the Servicing Standard to determine whether the conditions
described in clauses (i) and (ii) of the preceding paragraph have been
satisfied.
(d) If the environmental testing contemplated by subsection (c)
above establishes that either of the conditions set forth in clauses (i) and
(ii) of the first sentence thereof has not been satisfied with respect to any
Mortgaged Property securing a defaulted Mortgage Loan, then the Special Servicer
shall take such action as it deems to be in the best economic interest of the
Trust Fund (other than proceeding to acquire title to the Mortgaged Property)
and is hereby authorized at such time as it deems appropriate to release all or
a portion of such Mortgaged Property from the lien of the related Mortgage.
(e) The Special Servicer shall provide monthly to the Master
Servicer, the Depositor and each Rating Agency, and the Master Servicer shall,
in turn, promptly deliver copies thereof to the Trustee, written reports
regarding any actions taken by the Special Servicer with respect to any
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Mortgaged Property securing a defaulted Mortgage Loan as to which the
environmental testing contemplated in subsection (c) above has revealed that
either of the conditions set forth in clauses (i) and (ii) of the first sentence
thereof has not been satisfied, in each case until the earliest to occur of
satisfaction of both such conditions, removal of the related Mortgage Loan from
the Trust Fund and release of the lien of the related Mortgage on such Mortgaged
Property.
(f) The Special Servicer shall report to the Internal Revenue
Service and the related Mortgagor, in the manner required by applicable law, the
information required to be reported regarding any Mortgaged Property which is
abandoned or foreclosed, and the information required to be reported regarding
the discharge of any debt. The Special Servicer shall deliver a copy of any such
report to the Trustee and the Master Servicer.
(g) The Special Servicer shall have the right to determine, in
accordance with the Servicing Standard, the advisability of the maintenance of
an action to obtain a deficiency judgment if the laws of the state in which the
Mortgaged Property is located and the terms of the Mortgage Loan permit such an
action.
(h) The Special Servicer shall maintain accurate records,
prepared by a Servicing Officer, of each Final Recovery Determination in respect
of a defaulted Mortgage Loan or REO Property and the basis thereof. Each Final
Recovery Determination shall be evidenced by an Officer's Certificate delivered
to the Trustee and the Master Servicer no later than 10 Business Days following
such Final Recovery Determination.
SECTION 8.8. TRUSTEE TO COOPERATE; RELEASE OF MORTGAGE FILES.
(a) Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer or the Special Servicer of a notification that payment in
full shall be escrowed in a manner customary for such purposes, the Master
Servicer or the Special Servicer, as the case may be, will immediately notify
the Trustee and request delivery of the related Mortgage File. Any such notice
and request shall be in the form of a Request for Release signed by a Servicing
Officer and shall include a statement to the effect that all amounts received or
to be received in connection with such payment that are required to be deposited
in the Collection Account pursuant to Section 5.1 have been or will be so
deposited. Within five Business Days (or within such shorter period as release
can reasonably be accomplished if the Master Servicer or the Special Servicer
notifies the Trustee of an exigency) of receipt of such notice and request, the
Trustee shall release, or cause any related Custodian to release, the related
Mortgage File to the Master Servicer or the Special Servicer, whichever
requested it. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account.
(b) From time to time as is appropriate for servicing or
foreclosure of any Mortgage Loan, the Master Servicer or the Special Servicer
may deliver to the Trustee a Request for Release signed by a Servicing Officer
thereof. Upon receipt of the foregoing, the Trustee shall deliver or cause the
related Custodian to deliver, the Mortgage File or any document therein to the
Master Servicer or the Special Servicer, as the case may be. Upon return of such
Mortgage File or such document to the Trustee or the related Custodian, or the
delivery to the Trustee of a certificate of a Servicing Officer stating that
such Mortgage Loan was liquidated and that all amounts received or to be
received in connection with such liquidation that are required to be deposited
into the Collection Account pursuant to Section 5.1 have been or will be so
deposited, or that such Mortgage Loan has become an REO Mortgage Loan, the
Request for Release shall be released by the Trustee to the Master Servicer or
the Special Servicer, as applicable.
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(c) Within five Business Days (or within such shorter period as
delivery can reasonably be accomplished if the Special Servicer notifies the
Trustee of an exigency) of receipt thereof, the Trustee shall execute and
deliver to the Special Servicer any court pleadings, requests for trustee's sale
or other documents necessary to the foreclosure or trustee's sale in respect of
a Mortgaged Property or to any legal action brought to obtain judgment against
any Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency
judgment, or to enforce any other remedies or rights provided by the Mortgage
Note or Mortgage or otherwise available at law or in equity. The Special
Servicer shall be responsible for the preparation of all such documents and
pleadings. When submitted to the Trustee for signature, such documents or
pleadings shall be accompanied by a certificate of a Servicing Officer
requesting that such pleadings or documents be executed by the Trustee and
certifying as to the reason such documents or pleadings are required and that
the execution and delivery thereof by the Trustee will not invalidate or
otherwise affect the lien of the related Mortgage, except for the termination of
such a lien upon completion of the foreclosure or trustee's sale.
SECTION 8.9. DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF MASTER
SERVICER OR SPECIAL SERVICER TO BE HELD FOR TRUSTEE FOR THE BENEFIT OF
CERTIFICATEHOLDERS.
Notwithstanding any other provisions of this Agreement, the
Master Servicer and the Special Servicer shall each transmit to the Trustee, to
the extent required by this Agreement, all documents and instruments coming into
the possession of the Master Servicer or the Special Servicer, as the case may
be, from time to time and shall account fully to the Trustee for any funds
received or otherwise collected thereby, including Liquidation Proceeds,
Condemnation Proceeds or Insurance Proceeds in respect of any Mortgage Loan or
REO Property. All Mortgage Loan documents and funds collected or held by, or
under the control of, the Master Servicer or the Special Servicer in respect of
any Mortgage Loans and/or REO Properties, whether from the collection of
principal and interest payments or from Liquidation Proceeds, Condemnation
Proceeds or Insurance Proceeds or otherwise, including any funds on deposit in
the Collection Account, shall be held by the Master Servicer or the Special
Servicer, as the case may be, for and on behalf of the Trustee and the
Certificateholders and shall be and remain the sole and exclusive property of
the Trustee, subject to the applicable provisions of this Agreement. The Master
Servicer and the Special Servicer each agrees that it shall not create, incur or
subject any Mortgage Loan documents or any funds that are deposited in the
Collection Account or any Lock-Box Account, Reserve Account or Servicing
Account, or any funds that otherwise are or may become due or payable to the
Trustee, to any claim, lien, security interest, judgment, levy, writ of
attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of setoff against any Mortgage Loan documents or any funds
collected on, or in connection with, a Mortgage Loan or REO Property, except,
however, that the Master Servicer and the Special Servicer each shall be
entitled to receive from any such funds any amounts that are properly due and
payable to the Master Servicer or the Special Servicer, as the case may be,
under this Agreement.
SECTION 8.10. SERVICING COMPENSATION.
(a) As compensation for its activities hereunder, the Master
Servicer shall be entitled to receive the Master Servicing Fee with respect to
each Mortgage Loan, including without limitation each Specially Serviced
Mortgage Loan and each REO Mortgage Loan. As to each Mortgage Loan, including
without limitation each Specially Serviced Mortgage Loan and each REO Mortgage
Loan, the Master Servicing Fee shall accrue on the related Stated Principal
Balance of such Mortgage Loan outstanding from time to time at the applicable
Master Servicing Fee Rate and shall be computed based on the Stated Principal
Balance as of the preceding Due Date of such Mortgage Loan, and using the same
day count convention as the related Mortgage Loan. The Master Servicing Fee with
respect to
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any Mortgage Loan or REO Mortgage Loan shall cease to accrue if a Liquidation
Event occurs in respect thereof. The Master Servicing Fee shall be payable
monthly, on a loan-by-loan basis, from payments of interest on each Mortgage
Loan, REO Income allocable as interest on each REO Mortgage Loan and the
interest portion of P&I Advances on each Mortgage Loan, including without
limitation each REO Mortgage Loan. The Master Servicer shall be entitled to
recover unpaid Master Servicing Fees in respect of any Mortgage Loan, including
without limitation each REO Mortgage Loan, out of that portion of related
Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds, Repurchase
Proceeds or payments of Substitution Shortfall Amounts allocable as recoveries
of interest, to the extent permitted by Section 5.2. The Master Servicer's right
to receive the Master Servicing Fee may not be transferred in whole or in part
except in connection with the transfer of all of the Master Servicer's
responsibilities and obligations under this Agreement.
The Master Servicer shall be entitled to additional master
servicing compensation ("ADDITIONAL MASTER SERVICING COMPENSATION") in the form
of:
(i) 50% of any modification fees and assumption fees and
100% of any ancillary fees not otherwise addressed herein (other than in
respect of Specially Serviced Mortgage Loans) and Penalty Charges
collected on Mortgage Loans other than Specially Serviced Mortgage Loans
and REO Mortgage Loans, but only to the extent actually paid by the
related Mortgagor and to the extent that all amounts then due and
payable with respect to the related Mortgage Loan have been paid and,
with respect to Default Interest only, are not needed to pay Advance
Interest with respect to any other Mortgage Loan;
(ii) any Prepayment Interest Excesses collected on the
Mortgage Loans, including without limitation Specially Serviced Mortgage
Loans and REO Mortgage Loans, but only to the extent that the aggregate
of all such Prepayment Interest Excesses collected during each
Collection Period exceeds the Prepayment Interest Shortfalls incurred
during such Collection Period;
(iii) any interest and other income earned on the
investment of funds in the Collection Account and Interest Reserve
Account, but only to the extent not applied to offset losses on other
investments of funds in the Collection Account or Interest Reserve
Account, as applicable, and
(iv) any interest and other income earned on the
investment of funds in the Servicing Accounts, Reserve Accounts and
Lock-Box Accounts maintained by the Master Servicer, but only to the
extent not required to be paid to Mortgagors under applicable law or the
terms of the respective Mortgage Loan documents.
(b) As compensation for its activities hereunder, the Special
Servicer shall be entitled to receive the Special Servicing Fee with respect to
each Specially Serviced Mortgage Loan and each REO Mortgage Loan. As to each
Specially Serviced Mortgage Loan and each REO Mortgage Loan, the Special
Servicing Fee shall accrue on the related Stated Principal Balance of such
Mortgage Loan outstanding from time to time at the Special Servicing Fee Rate
and shall be computed based on the Stated Principal Balance as of the preceding
Due Date of such Specially Serviced Mortgage Loan or REO Mortgage Loan, and
using the same day count convention as the related Mortgage Loan. The Special
Servicing Fee with respect to each Specially Serviced Mortgage Loan and each REO
Mortgage Loan shall cease to accrue if a Liquidation Event occurs in respect
thereof. As to each Specially Serviced Mortgage Loan and each REO Mortgage Loan,
earned but unpaid Special Servicing Fees shall be payable monthly out of the
same sources and at the same time (but separate from) Master Servicing
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Fees payable to the Master Servicer in respect of such Specially Serviced
Mortgage Loan or REO Mortgage Loan.
As further compensation for its activities hereunder, the Special
Servicer shall be entitled to receive the Workout Fee with respect to each
Corrected Mortgage Loan. As to each Corrected Mortgage Loan, the Workout Fee
shall be payable from, and shall be calculated by application of the Workout Fee
Rate to, each collection of interest and principal received on such Mortgage
Loan for so long as it remains a Corrected Mortgage Loan. The Workout Fee with
respect to any Corrected Mortgage Loan will cease to be payable if a Servicing
Transfer Event occurs with respect thereto or if the related Mortgaged Property
becomes an REO Property, provided that a new Workout Fee will become payable if
and when such Mortgage Loan again becomes a Corrected Mortgage Loan. If the
Special Servicer is terminated other than for cause or resigns in accordance
with Section 8.24, it shall retain the right to receive any and all Workout Fees
payable in respect of Mortgage Loans that became Corrected Mortgage Loans during
the period that it acted as Special Servicer and were still such at the time of
such termination or resignation (and the successor Special Servicer shall not be
entitled to any portion of such Workout Fees), in each case until the Workout
Fee for any such loan ceases to be payable in accordance with the preceding
sentence.
As further compensation for its activities hereunder, the Special
Servicer shall also be entitled to receive a Liquidation Fee with respect to
each Specially Serviced Mortgage Loan or REO Property as to which it receives
any full or discounted payoff or any Liquidation Proceeds (other than in
connection with the purchase of any such Specially Serviced Mortgage Loan or REO
Property by any Person entitled to effect an optional termination of the Trust
pursuant to Section 10.01). The Liquidation Fee with respect to any such
Specially Serviced Mortgage Loan will not be payable if such Mortgage Loan
becomes a Corrected Mortgage Loan. Notwithstanding anything herein to the
contrary, no Liquidation Fee will be payable from, or based upon the receipt of,
Liquidation Proceeds collected as a result of any purchase of a Specially
Serviced Mortgage Loan or REO Property described in the parenthetical to the
first sentence of this paragraph.
The Special Servicer shall be entitled to additional special
servicing compensation ("ADDITIONAL SPECIAL SERVICING COMPENSATION") in the form
of 100% of any modification fees, assumption fees, Late Fees and ancillary fees
not otherwise addressed herein relating to Specially Serviced Mortgage Loans
and, to the extent not otherwise applied to pay Advance Interest as provided
herein, Default Interest, collected on Specially Serviced Mortgage Loans and REO
Mortgage Loans and 50% of any modification fees and assumption fees collected on
Mortgage Loans other than Specially Serviced Mortgage Loans and REO Mortgage
Loans. The Special Servicer shall also be entitled to investment income on
amounts held in the REO Account pursuant to Section 8.19.
(c) The Master Servicer and the Special Servicer shall each be
required to pay out of its own funds all overhead and general and administrative
expenses incurred by it in connection with its servicing activities hereunder
(including, without limitation, payment of any amount due and owing to any
Sub-Servicers retained by it and the premiums for any blanket policy obtained by
it insuring against hazard losses pursuant to Section 8.5(b)), if and to the
extent such expenses are not payable directly out of the Collection Account, and
neither the Master Servicer nor the Special Servicer, as the case may be, shall
be entitled to reimbursement except as expressly provided in this Agreement. In
the event that Rating Agency Confirmation is required in connection with any
exercise of rights by the Master Servicer or the Special Servicer, as
applicable, under any Mortgage Loan, the Master Servicer or Special Servicer, as
the case may be, shall use its reasonable efforts consistent with the Servicing
Standard to cause the
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related Borrower to pay any fee required by the applicable Rating Agency for
such confirmation, and if the Borrower does not pay such fee, then it shall be
paid by the Master Servicer as a Servicing Advance.
SECTION 8.11. MASTER SERVICER REPORTS; ACCOUNT STATEMENTS.
(a) The Master Servicer shall deliver to the Trustee, no later
than 2:00 p.m. Eastern time on the Report Date, the Master Servicer Remittance
Report with respect to the related Distribution Date. The Special Servicer shall
provide all information relating to Specially Serviced Mortgage Loans and REO
Properties to permit the Master Servicer to satisfy its duties in this Section
8.11 on or before the date that is one Business Day after the Determination
Date.
(b) The Master Servicer shall deliver to the Trustee within 30
days following each Master Servicer Remittance Date a statement setting forth
the status of the Collection Account as of the close of business on such Master
Servicer Remittance Date showing, for the period covered by such statement, the
aggregate of deposits of each type provided in Section 5.1 in, and the aggregate
of withdrawals of each type provided in Section 5.2 from, the Collection
Account.
SECTION 8.12. ANNUAL STATEMENT AS TO COMPLIANCE. The Master
Servicer and the Special Servicer shall each deliver to the Depositor, the
Operating Adviser (or if no Operating Adviser has been elected, the Majority
Certificateholder of the Controlling Class), the Rating Agencies and the Trustee
(and, in the case of the Special Servicer, to the Master Servicer) on or before
April 30 of each year, an Officer's Certificate stating, as to the signer
thereof, that (a) a review of the activities of the Master Servicer or the
Special Servicer, as the case may be, during the preceding calendar year or
portion thereof and of the performance of the Master Servicer or the Special
Servicer, as the case may be, under this Agreement has been made under such
officer's supervision and (b) to the best of such officer's knowledge, based on
such review, the Master Servicer or the Special Servicer, as the case may be,
has fulfilled all its obligations under this Agreement in all material respects
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. The Master Servicer and the Special Servicer shall
each forward to the Rating Agencies a copy of each such statement delivered by
it to the Depositor and the Trustee.
SECTION 8.13. ANNUAL INDEPENDENT PUBLIC ACCOUNTANTS' SERVICING
REPORT. On or before April 30 of each year beginning April 30, 2000, the Master
Servicer at its expense shall cause a firm of Accountants to furnish a statement
to the Depositor, the Operating Adviser (or if no Operating Adviser has been
elected, the Majority Certificateholder of the Controlling Class), the Rating
Agencies and the Trustee to the effect that (i) it has obtained a letter of
representation regarding certain matters from the management of the Master
Servicer, which includes an assertion that the Master Servicer has complied with
certain minimum mortgage loan servicing standards (to the extent applicable to
commercial and multifamily mortgage loans), identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America, with respect to the servicing of commercial and
multifamily mortgage loans during the most recently completed calendar year and
(ii) on the basis of an examination conducted by such firm in accordance with
standards established by the American Institute of Certified Public Accountants,
such representation is fairly stated in all material respects, subject to such
exceptions and other qualifications that may be appropriate. In rendering its
report such firm may rely, as to matters relating to the direct servicing of
commercial and multifamily mortgage loans by Sub-Servicers, upon comparable
reports of firms of independent certified public accountants rendered on the
basis of examinations conducted in accordance with the same standards (rendered
within one year of such report) with respect to those Sub-Servicers.
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The Special Servicer will deliver to the Depositor, the Operating
Adviser (or if no Operating Adviser has been elected, the Majority
Certificateholder of the Controlling Class), the Trustee, the Rating Agencies
and the Master Servicer an annual accountants' report.
The Master Servicer and the Special Servicer, to the extent
applicable, shall each, with 90 days' prior written notice, use reasonable
efforts to cause the applicable Accountants to cooperate with the Depositor in
conforming any reports delivered pursuant to this Section 8.13 to requirements
imposed by the Securities and Exchange Commission on the Depositor in connection
with the Securities and Exchange Commission's issuance of a no-action letter
relating to the Depositor's reporting requirements in respect of the Trust Fund
pursuant to the Exchange Act.
The Master Servicer and the Special Servicer shall each forward
to the Rating Agencies a copy of each statement delivered by it to the Depositor
and the Trustee pursuant to this Section 8.13.
SECTION 8.14. CERTAIN REPORTS REGARDING THE MORTGAGE LOANS AND
THE MORTGAGED PROPERTIES.
(a) On or before 2:00 p.m. New York time, on the Report Date
in each month, the Master Servicer shall deliver to the Trustee a report in CSSA
format containing information regarding the Mortgage Loans as of the end of the
related Collection Period, which report will contain substantially the
categories of information regarding the Mortgage Loans set forth on Exhibit I
hereto. The Master Servicer also maintains a site on the World Wide Web at
▇▇▇.▇▇▇▇▇▇▇.▇▇▇ at which property level information will be available.
(b) Reserved.
(c) No later than 2:00 p.m. New York time on the Master
Servicer Remittance Date, the Master Servicer shall deliver or cause to be
delivered to the Trustee and the Rating Agencies the following reports with
respect to the Mortgage Loans (and, if applicable, the related REO Properties),
providing the required information as of the Determination Date: (i) a
Comparative Financial Status Report, (ii) a Delinquent Loan Status Report; (iii)
an Historical Loss Estimate Report; (iv) an Historical Loan Modification Report;
(v) an REO Status Report; and (vi) CSSA Reports. Such reports shall be presented
in writing and on a computer readable medium reasonably acceptable to the
Trustee. The information that pertains to Specially Serviced Mortgage Loans and
REO Properties reflected in such reports shall be based solely upon the reports
delivered by the Special Servicer to the Master Servicer pursuant to Section
8.29. In the absence of manifest error, the Master Servicer shall be entitled to
conclusively rely upon, without investigation or inquiry, the information and
reports delivered to it by the Special Servicer and any Borrower, and the
Trustee shall be entitled to conclusively rely upon the Master Servicer's
reports and the Special Servicer's reports without any duty or obligation to
recompute, verify or recalculate any of the amounts and other information stated
therein. Any of such reports may include any disclaimers the Master Servicer
deems appropriate.
(d) The Master Servicer shall deliver or cause to be delivered
to the Trustee and the Rating Agencies upon request the following materials, in
each case to the extent that such materials or the information on which they are
based have been received by the Master Servicer:
(i) At least annually by June 30, with respect to each
Mortgage Loan and REO Mortgage Loan, an Operating Statement Analysis for
the related Mortgaged Property or REO Property as of the end of the
preceding calendar year, together with copies of the operating
statements and rent rolls (but only to the extent the related Mortgagor
is required by the
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Mortgage to deliver, or otherwise agrees to provide such information
and, with respect to operating statements and rent rolls for Specially
Serviced Mortgage Loans and REO Properties, only to the extent delivered
by the Special Servicer) for the related Mortgaged Property or REO
Property as of the end of the preceding fiscal year. The Master Servicer
shall use its reasonable efforts to obtain such annual operating
statements and rent rolls with respect to each of the Mortgage Loans
other than Specially Serviced Mortgage Loans or REO Mortgage Loans,
which efforts shall include (if such reports are required by the terms
of the Mortgage Loans) a letter sent to the related Mortgagor each
quarter (followed up with telephone calls) requesting such annual
operating statements and rent rolls until they are received to the
extent such action is consistent with applicable law and the terms of
the Mortgage Loans. The Master Servicer and the Special Servicer shall
be entitled to rely conclusively on all information provided by the
Borrower and shall have no liability arising directly or indirectly from
the inaccuracy or incompleteness of any information provided by the
Borrower and shall have no duty to verify the information provided by
the Borrower.
(ii) Within thirty days after receipt by the Master
Servicer (or twenty days after receipt from the Special Servicer in the
case of a Specially Serviced Mortgage Loan or REO Property) of any
annual operating statements with respect to any Mortgaged Property or
REO Property, an NOI Adjustment Worksheet for such Mortgaged Property
(with the annual operating statements attached thereto as an exhibit).
The Master Servicer shall maintain one Operating Statement
Analysis report for each Mortgaged Property and REO Property (to the extent
prepared by and received from the Special Servicer in the case of any REO
Property or any Mortgaged Property constituting security for a Specially
Serviced Mortgage Loan). The Operating Statement Analysis report for each
Mortgaged Property (other than any such Mortgaged Property which is REO Property
or constitutes security for a Specially Serviced Mortgage Loan) is to be updated
by the Master Servicer and such updated report delivered to the Trustee on the
Master Servicer Remittance Date which is no earlier than thirty days after
receipt by the Master Servicer of updated operating statements for such
Mortgaged Property. On an annual basis, the Master Servicer will use the
"normalized" column from the NOI Adjustment Worksheet to update the Operating
Statement Analysis report and will use any operating statements received with
respect to any Mortgaged Property (other than any such Mortgaged Property which
is REO Property or constitutes security for a Specially Serviced Mortgage Loan)
to update the Operating Statement Analysis report for such Mortgaged Property,
such updates to be completed and copies thereof sent to the Trustee within
thirty days after receipt of the necessary information.
(e) No later than 1:00 p.m. New York time on the Master
Servicer Remittance Date, beginning in May 1999, the Master Servicer shall
prepare and deliver to the Trustee and the Special Servicer, a Watch List of all
Mortgage Loans that the Master Servicer has determined are in jeopardy of
becoming Specially Serviced Mortgage Loans. For this purpose, Mortgage Loans
that are in jeopardy of becoming Specially Serviced Mortgage Loans shall
include, without limitation: (i) Mortgage Loans having a current trailing
twelve-month Debt Service Coverage Ratio that is 80% or less of the trailing
twelve-month Debt Service Coverage Ratio as of the Cut-off Date or having a
current trailing twelve-month Debt Service Coverage Ratio that is less than
1.00x, (ii) Mortgage Loans as to which any required inspection of the related
Mortgaged Property conducted by the Master Servicer indicates a problem that the
Master Servicer determines can reasonably be expected to materially adversely
affect the cash flow generated by such Mortgaged Property, (iii) Mortgage Loans
which have come to the Master Servicer's attention in the performance of its
duties under this Agreement (without any expansion of such duties by reason
hereof) that (A) any tenant occupying 25% or more of the space in the related
Mortgaged Property
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has vacated (without being replaced by a comparable tenant and lease) or been
the subject of bankruptcy or similar proceedings or (B) relate to a borrower or
an affiliate that is the subject of a bankruptcy or similar proceeding, (iv)
Mortgage Loans that are at least one full Collection Period delinquent in
payment, and (v) Mortgage Loans that are within 60 days of maturity. Any such
Watch List may include any disclaimers the Master Servicer deems appropriate.
The Special Servicer shall report to the Master Servicer any of
the foregoing events promptly upon the Special Servicer having knowledge of such
event. In addition, in connection with their servicing of the Mortgage Loans,
the Master Servicer and the Special Servicer shall provide to each other and to
the Trustee written notice of any event that comes to their knowledge with
respect to a Mortgage Loan or REO Property that the Master Servicer or the
Special Servicer, respectively, determines, in accordance with Servicing
Standards, would have a material adverse effect on such Mortgage Loan or REO
Property, which notice shall include an explanation as to the reason for such
material adverse effect.
(f) One Business Day after the Determination Date, the Special
Servicer shall deliver, or cause to be delivered, to the Master Servicer and,
upon the request of any of the Trustee, the Depositor or either Rating Agency,
to such requesting party, the following reports with respect to the Specially
Serviced Mortgage Loans (and, if applicable, the related REO Properties),
providing the required information as of the Due Date: (i) a Delinquent Loan
Status Report; (ii) an Historical Loss Estimate Report; (iii) an Historical Loan
Modification Report; (iv) an REO Status Report; (v) Comparative Financial Status
Reports with respect to all Specially Serviced Mortgage Loans; and (vi) CSSA
Reports. Such reports shall be presented in writing and on a computer readable
magnetic medium. Such information may be provided as part of another CSSA report
in lieu of these separate reports.
(g) The Special Servicer shall deliver or cause to be delivered
to the Master Servicer and, upon the request of any of the Trustee, the
Depositor or any Rating Agency, to such requesting party, the following
materials, in each case to the extent that such materials or the information on
which they are based have been received by the Special Servicer:
(i) Annually, on or before June 10 of each year,
commencing with June 10, 1999, with respect to each Specially Serviced
Mortgage Loan and REO Mortgage Loan, an Operating Statement Analysis for
the related Mortgaged Property or REO Property as of the end of the
preceding calendar year, together with copies of the operating
statements and rent rolls for the related Mortgaged Property or REO
Property as of the end of the preceding calendar year. The Special
Servicer shall use its best reasonable efforts in accordance with the
Servicing Standard to obtain such annual operating statements and rent
rolls with respect to each Mortgaged Property constituting security for
a Specially Serviced Mortgage Loan and each REO Property, which efforts
shall include a letter sent to the related Mortgagor or other
appropriate party each quarter (followed up with telephone calls)
requesting such annual operating statements and rent rolls until they
are received.
(ii) Within 10 days of receipt by the Special Servicer of
any annual operating statements with respect to any Mortgaged Property
relating to a Specially Serviced Mortgage Loan, or at least six months
of operating information with respect to any REO Property, an NOI
Adjustment Worksheet for such Mortgaged Property or REO Property (with
the annual operating statements attached thereto as an exhibit).
The Special Servicer shall maintain one Operating Statement
Analysis report for each Mortgaged Property securing a Specially Serviced
Mortgage Loan and REO Property. The Operating
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Statement Analysis report for each Mortgaged Property which constitutes security
for a Specially Serviced Mortgage Loan or is an REO Property is to be updated by
the Special Servicer and such updated report delivered to the Master Servicer
within ten days after receipt by the Special Servicer of updated operating
statements for each such Mortgaged Property. The Special Servicer will use the
"normalized" column from the NOI Adjustment Worksheet to update the Operating
Statement Analysis report and will use any operating statements received with
respect to any Mortgaged Property which constitutes security for a Specially
Serviced Mortgage Loan or is an REO Property to update the Operating Statement
Analysis report for such Mortgaged Property, such updates to be completed and
copies thereof sent to the Master Servicer within ten days after receipt of the
necessary information.
(h) The Trustee shall be entitled to rely conclusively on and
shall not be responsible for the content or accuracy of any information provided
to it by the Master Servicer or the Special Servicer pursuant to this Agreement.
(i) The Trustee shall provide or make available copies of the
reports received by it pursuant to Section 8.14(a) to the Depositor, FINOVA, the
Holders and each Rating Agency, subject to the provisions of Section 5.4(g).
(j) All reports prepared by the Master Servicer and Special
Servicer pursuant to this Section 8.14 shall be prepared, to the extent
applicable, in the format recommended by CSSA.
SECTION 8.15. CERTAIN AVAILABLE INFORMATION AND RELATED RIGHTS OF
THE MASTER SERVICER AND THE SPECIAL SERVICER.
(a) Subject to the restrictions described below (and except to
the extent not permitted by law or under any of the Mortgage Loan documents),
the Master Servicer and the Special Servicer shall each also afford the Rating
Agencies, the Depositor, the Trustee, the Special Servicer, the Underwriters,
and the Operating Adviser, and the Majority Certificateholder of the Controlling
Class upon reasonable notice and during normal business hours, reasonable access
to any and all additional relevant, non-proprietary and
non-attorney-client-privileged records and documentation in its possession or
under its control regarding the Mortgage Loans, REO Properties and all accounts,
insurance policies and other relevant matters relating to this Agreement, and
access to Servicing Officers of the Master Servicer or Special Servicing
Officers of the Special Servicer, as the case may be, responsible for its
obligations hereunder. Copies (or computer diskettes or other digital or
electronic copies of such information if reasonably available in lieu of paper
copies) of any and all of the foregoing items shall be made available by the
Master Servicer or the Special Servicer, as the case may be, upon request;
provided, however, that the Master Servicer and the Special Servicer shall each
be permitted to require payment by the requesting party (other than the
Depositor, the Trustee, the Underwriters or either Rating Agency) of a sum
sufficient to cover the reasonable expenses actually incurred by the Master
Servicer or the Special Servicer, as the case may be, of providing access or
copies (including electronic or digital copies) of any such information
requested in accordance with the preceding sentence.
(b) Nothing herein shall be deemed to require the Master
Servicer or Special Servicer to confirm, represent or warrant the accuracy of
(or to be liable or responsible for) any other Person's information or report,
included in any communication from the other (unless the Master Servicer and the
Special Servicer are the same Person) or from a Mortgagor. Neither the Master
Servicer nor the Special Servicer shall have any liability to the Depositor, the
Trustee, any Certificateholder, any Certificate Owner, the Underwriters, either
Rating Agency or any other Person to whom it delivers information pursuant to
this Section 8.15 or any other provision of this Agreement for federal, state or
other applicable securities law violations relating to the disclosure of such
information. In the event any
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Person brings any claims relating to or arising from the foregoing against the
Master Servicer, the Special Servicer or the Trustee, the Trust (from amounts
held in the Collection Account from time to time) shall hold harmless and
indemnify the Master Servicer, the Special Servicer or the Trustee, as the case
may be, from any loss or expense (including attorneys' fees) relating to or
arising from such claims.
(c) The Master Servicer and the Special Servicer shall each
produce the reports required of it under this Agreement; provided, however, that
neither the Master Servicer nor the Special Servicer shall be required to
produce any ad hoc non-standard written reports with respect to the Mortgage
Loans. In the event the Master Servicer or the Special Servicer elects to
provide such reports, it may require the Person requesting such report to pay a
reasonable fee to cover the costs of the preparation thereof. Requests for any
such report shall be made, and any such report shall be disseminated, through
the Trustee.
(d) In connection with providing access to or copies of the
items described in the subsections (a), (b) and/or (c) of this Section 8.15 or
in Section 8.16, the Master Servicer, the Special Servicer and the Trustee may
each require: (a) in the case of Certificate Owners, a written confirmation
executed by the requesting Person, in form reasonably satisfactory to the Master
Servicer, the Special Servicer or the Trustee, as the case may be, generally to
the effect that such Person is a beneficial holder of Certificates, is
requesting the information solely for use in evaluating such Person's investment
in the Certificates and will otherwise keep such information confidential; and
(b) in the case of Prospective Investors, a written confirmation executed by the
requesting Person, in form reasonably satisfactory to the Master Servicer, the
Special Servicer or the Trustee, as the case may be, generally to the effect
that such Person is a prospective purchaser of a Certificate or an interest
therein, is requesting the information solely for use in evaluating a possible
investment in Certificates and will otherwise keep such information
confidential.
(e) The Master Servicer and the Special Servicer shall each
provide or cause to be provided to the OTS, the FDIC and any other federal or
state banking or insurance regulatory authority that may exercise authority over
any Certificateholder or Certificate Owner, access to any and all records and
other documentation regarding the Mortgage Loans and the Trust Fund within its
control that may be required by this Agreement or by applicable law. Such access
shall be afforded without charge but only upon reasonable prior written request
and during normal business hours at the offices of the Master Servicer or the
Special Servicer, as the case may be, designated by it.
(f) The Master Servicer and the Special Servicer shall each
cooperate in providing the Rating Agencies with such other pertinent information
relating to the Mortgage Loans as is or should be in their respective possession
as the Rating Agencies may reasonably request. Any Holder of a Privately Offered
Certificate may, upon request to the Trustee (which may be in the form of a
standing request for as long as such Holder remains a Holder of any such
Certificates), obtain a copy of any report or other information (to the extent
the Trustee has such report or other information in its possession) delivered to
the Rating Agencies under this Agreement.
SECTION 8.16. RULE 144A INFORMATION. For so long as any of the
Certificates are "restricted securities" within the meaning of Rule 144A under
the Securities Act, each of the Master Servicer and the Special Servicer agrees
to provide to the Trustee, which in turn shall provide to any Holder,
Certificate Owner or Prospective Investor of such Certificates, upon the request
of such Holder, Certificate Owner or Prospective Investor, subject to the other
provisions of this Section 8.16 and the provisions of subsections (b), (c) and
(d) of Section 8.15, any information prepared by or otherwise in the possession
or under the control of the Master Servicer or the Special Servicer, as the case
may be, that
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has not already been delivered to the Trustee and that is required to be
provided to such Holder, Certificate Owner or Prospective Investor to satisfy
the condition set forth in Rule 144A(d)(4) under the Securities Act, including,
without limitation, copies of the reports and information described in
subsection (a) of Section 8.15.
Any recipient of information provided pursuant to this Section
8.16 shall agree that such information shall not be disclosed or used for any
purpose other than the evaluation of an investment in the Certificates. Unless
the Master Servicer or the Special Servicer chooses to deliver the information
directly, the Trustee shall be responsible for the physical delivery of the
information requested pursuant to this Section 8.16. As a condition to the
Master Servicer or the Special Servicer making any report or information
available upon request to any Person other than one of the other parties hereto,
the Master Servicer or the Special Servicer, as the case may be, may require
that the recipient of such information acknowledge that the Master Servicer or
the Special Servicer, as the case may be, may contemporaneously provide such
information to the Depositor, the Trustee, the Underwriters and/or the
Certificateholders and Certificate Owners. The Master Servicer and the Special
Servicer will each be permitted to require payment of a sum by the requesting
party (other than the Rating Agencies, the Depositor, the Trustee or the
Underwriters) sufficient to cover the reasonable costs and expenses of making
such information available.
SECTION 8.17. INSPECTIONS; COLLECTION OF FINANCIAL STATEMENTS.
(a) The Master Servicer shall perform (or cause to be performed)
a physical inspection of each Mortgaged Property (other than Mortgaged
Properties constituting REO Properties or collateral for Specially Serviced
Mortgaged Loans) at such times and in such manner as are consistent with the
Servicing Standard, but in any event at least once every two years (or, if the
related Mortgage Loan has a current balance of more than $2,000,000, at least
once every year) provided that the Master Servicer will have no obligation to
inspect a Mortgaged Property inspected by the Special Servicer during such
period. The Master Servicer shall promptly prepare (or cause to be prepared) a
written report of each such inspection detailing the condition of the Mortgaged
Property and specifying the existence of (i) any vacancy in the Mortgaged
Property evident from such inspection that the Master Servicer deems material,
(ii) any sale, transfer or abandonment of the Mortgaged Property evident from
such inspection, (iii) any adverse change in the condition or value of the
Mortgaged Property evident from such inspection that the Master Servicer deems
material, or (iv) any waste committed on the Mortgaged Property evident from
such inspection. The Master Servicer shall upon request deliver to the Trustee,
the Special Servicer and the Depositor a copy of each such written report of the
related inspection, and the Trustee shall deliver to the Holders of the
Privately Offered Certificates a copy of each such written report within 15 days
of receipt of such report from the Master Servicer
(b)....If any Mortgage Loan becomes a Specially Serviced Mortgage
Loan, then as soon as practicable (and in any event within 90 days thereafter)
the Special Servicer shall perform (or cause to be performed) a physical
inspection of each Mortgaged Property constituting collateral for such Mortgage
Loan (unless such Mortgaged Property had been inspected within the prior three
months), and the Special Servicer shall thereafter inspect such Mortgaged
Property at such times and in such manner as are consistent with the Servicing
Standard (but in any event at least once per calendar year). The cost of such
inspections shall be a Servicing Advance. The Special Servicer shall promptly
prepare (or cause to be prepared) a written report of each such inspection
detailing the condition of the Mortgaged Property and specifying the existence
of (i) any vacancy in the Mortgaged Property evident from such inspection that
the Special Servicer deems material, (ii) any sale, transfer or abandonment of
the Mortgaged Property evident from such inspection, (iii) any adverse change in
the condition or value of the
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Mortgaged Property evident from such inspection that the Special Servicer deems
material, or (iv) any waste committed on the Mortgaged Property evident from
such inspection. The Special Servicer shall deliver to the Master Servicer, the
Trustee, the Holders of the Privately Offered Certificates and the Depositor a
copy of each such written report within 15 days of the related inspection.
(c) The Master Servicer (or, in the case of Specially Serviced
Mortgage Loans, the Special Servicer) shall make reasonable efforts to collect
promptly from each Mortgagor quarterly and annual operating statements and rent
rolls of the related Mortgaged Property, and financial statements of such
Mortgagor, if delivery of such items is required pursuant to the terms of the
related Mortgage. In addition, the Special Servicer shall use reasonable efforts
to obtain quarterly and annual operating statements and rent rolls with respect
to each REO Property. The Master Servicer and Special Servicer shall, upon
request, each deliver copies of the collected items to the other such party and
the Trustee, and the Trustee shall deliver copies of such items to the Depositor
and Holders of the Privately Offered Certificates upon request.
SECTION 8.18. MODIFICATIONS, WAIVERS, AMENDMENTS, EXTENSIONS AND
CONSENTS.
(a) Subject to the limitations of Section 12.4 hereof, the
Special Servicer and Master Servicer, as applicable, shall have the following
powers:
(i) The Special Servicer in accordance with the Servicing
Standard, may agree to any modification, waiver, amendment or consent of
or relating to any non-Money Term or may extend the maturity date of any
Balloon Mortgage Loan that is not a Specially Serviced Mortgage Loan to
a date that is not more than 60 days following the original Maturity
Date and not later than two years prior to the Rated Final Distribution
Date (or if secured by a ground lease, not later than the date that is
10 years prior to the end of such ground lease), if in the Special
Servicer's sole judgment exercised in good faith and in accordance with
the Servicing Standard (and evidenced by an Officer's Certificate), a
default in the payment of the Balloon Payment is reasonably foreseeable
and such extension is reasonably likely to produce a greater recovery on
a net present value basis than liquidation of such Mortgage Loan. The
Special Servicer shall process all such extensions and shall be entitled
to (as additional servicing compensation) 100% of any extension fees
collected from a Mortgagor with respect to any such extension.
The Master Servicer may modify or amend the terms of any
Mortgage Loan without the consent of the Special Servicer in order to
(i) cure any ambiguity therein or (ii) correct or supplement any
provisions therein which may be inconsistent with any other provisions
therein or correct any error, provided that such modification or
amendment would not cause an Adverse REMIC Event to occur. In addition,
the Master Servicer in accordance with the Servicing Standard, may agree
to any modification, waiver, amendment or consent of or relating to any
non-Money Term of a Mortgage Loan that is not a Specially Serviced
Mortgage Loan other than (x) any modification or waiver contemplated by
Section 8.6, and (y) any amendment that would result in an Adverse REMIC
Event or a "significant modification" within the meaning of Treasury
Regulation 1.860G-2(b). Other than as set forth in the preceding
sentence, the Master Servicer shall not agree to any modification or
amendment of a Mortgage Loan or any waiver or consent (other than
immaterial waivers and consents made in the ordinary course of
business).
(ii) The Special Servicer may require, in its discretion,
as a condition to granting any request by a Mortgagor for any consent,
modification, waiver or amendment, that
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such Mortgagor pay to the Special Servicer a reasonable and customary
modification fee to the extent permitted by law. The Special Servicer
may charge the Mortgagor for any costs and expenses (including
attorneys' fees) incurred by the Special Servicer in connection with any
request for a modification, waiver or amendment. The failure or
inability of the Mortgagor to pay any such costs and expenses shall not
impair the right of the Special Servicer to cause such costs and
expenses, and interest thereon at the Advance Rate, to be paid or
reimbursed by the Trust as a Servicing Advance (to the extent not paid
by the Mortgagor).
(iii) Each of the Special Servicer and the Master
Servicer, as applicable, shall notify the Trustee of any modification,
waiver or amendment of any term of any Mortgage Loan permitted by it
under this Section and the date thereof, and shall deliver to the
Trustee for deposit in the related Mortgage File, an original
counterpart of the agreement relating to such modification, waiver or
amendment, promptly following the execution thereof except to the extent
such documents have been submitted to the applicable recording office,
in which event the Special Servicer or the Master Servicer, as
applicable, shall promptly deliver copies of such documents to the
Trustee. Upon request, the Trustee shall deliver copies of such
documents to the Holders of the Privately Offered Certificates within 15
days of receipt by the Trustee thereof.
(b) Subject to the limitation of Section 12.4 hereof, the Special
Servicer, in accordance with the Servicing Standard, shall have the following
additional powers:
(i) The Special Servicer may enter into a modification,
waiver or amendment (including, without limitation, the substitution or
release of collateral or the pledge of additional collateral) of the
terms of a Specially Serviced Mortgage Loan, including any modification,
waiver or amendment to (a) reduce the amounts owing under any Specially
Serviced Mortgage Loan by forgiving principal, accrued interest or any
Prepayment Premium, (b) reduce the amount of the Monthly Payment on any
Specially Serviced Mortgage Loan, including by way of a reduction in the
related Mortgage Rate, (c) forebear in the enforcement of any right
granted under any Mortgage Note or Mortgage relating to a Specially
Serviced Mortgage Loan, (d) extend the Maturity Date of any Specially
Serviced Mortgage Loan and/or (e) accept a principal prepayment on any
Specially Serviced Mortgage Loan during any period during which
voluntary Principal Prepayments are prohibited, provided that (1) the
related Mortgagor is in default with respect to the Specially Serviced
Mortgage Loan or, in the judgment of the Special Servicer, such default
is reasonably foreseeable, (2) in the reasonable judgment of the Special
Servicer such modification would increase the recovery on the Mortgage
Loan to Certificateholders on a net present value basis (the relevant
discounting of amounts that will be distributable to Certificateholders
to be performed at the related Mortgage Rate) and (3) such modification,
waiver or amendment would not cause an Adverse REMIC Event to occur.
In no event shall the Special Servicer (i) extend the Maturity
Date of a Specially Serviced Mortgage Loan beyond a date that is two years prior
to the Rated Final Distribution Date; (ii) extend the Maturity Date of any
Specially Serviced Mortgage Loan at an interest rate below the then-prevailing
interest rate for comparable loans at the time of such modification as
determined by the Special Servicer (such limitation of extensions made at below
market rates shall not limit the ability of the Special Servicer to extend the
Maturity Date of any Specially Serviced Mortgage Loan at an interest rate at or
in excess of the prevailing rate for comparable loans at the time of such
modification); (iii) if the Specially Serviced Mortgage Loan is secured by a
ground lease, extend the Maturity Date of such Specially Serviced Mortgage Loan
beyond a date which is less than 10 years prior to the expiration of the term of
such ground lease; (iv) reduce the Mortgage Rate of a Specially Serviced
Mortgage Loan to a rate
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below the then-prevailing interest rate for comparable loans at the time of
such modification, as determined by the Special Servicer; or (v) defer interest
due on any Specially Serviced Mortgage Loan in excess of 10% of the Stated
Principal Balance of such Specially Serviced Mortgage Loan or defer the
collection of interest on any Specially Serviced Mortgage Loan without accruing
interest on such deferred interest at a rate at least equal to the Mortgage Rate
of such Specially Serviced Mortgage Loan.
Notwithstanding the foregoing, if a Mortgage Loan is a Balloon
Loan that has failed to make the Balloon Payment at its scheduled maturity, and
such Balloon Loan is not a Specially Serviced Mortgage Loan (other than by
reason of failure to make the Balloon Payment) and has not been delinquent in
the preceding 12 months (other than with respect to the Balloon Payment), then
in addition to the other alternatives specified above, the Special Servicer may
make up to three one-year extensions at the existing Mortgage Rate for such
Mortgage Loan; provided that in no event shall any such extension extend beyond
the date that is two years prior to the Rated Final Distribution Date (or if
secured by a ground lease, not later than the date that is 10 years prior to the
expiration of such ground lease).
The determination of the Special Servicer contemplated by clause
(2) of the proviso to the first paragraph of this Section 8.18(b)(i) and clause
(ii) of the second paragraph of this Section 8.18(b)(i) shall be evidenced by an
Officer's Certificate to such effect delivered to the Trustee and the Master
Servicer and describing in reasonable detail the basis for the Special
Servicer's determination. The Special Servicer shall append to such Officer's
Certificate any information, including but not limited to income and expense
statements, rent rolls, property inspection reports and appraisals, that support
such determination.
(ii) In the event the Special Servicer intends to permit a
Mortgagor to substitute collateral for all or any portion of a Mortgaged
Property pursuant to Section 8.18(b)(i) or pledge additional collateral
for the Mortgage Loan pursuant to Section 8.18(b)(i), if the security
interest of the Trust in such collateral would be perfected by
possession, or if such collateral requires special care or protection,
then prior to agreeing to such substitution or addition of collateral,
the Special Servicer shall make arrangements for such possession, care
or protection, and prior to agreeing to such substitution or addition of
collateral (or such arrangement for possession, care or protection)
shall obtain the prior written consent of the Trustee with respect
thereto (which consent shall not be unreasonably withheld, delayed or
conditioned); provided, however, that any such substitution or addition
of collateral shall require Rating Agency Confirmation; and provided
further, that the Trustee shall not be required (but has the option) to
consent to any substitution or addition of collateral or to hold any
such collateral which will require the Trustee to undertake any
additional duties or obligations or incur any additional expense. In the
event that the Master Servicer or the Special Servicer intends to permit
a Mortgagor to release any portion of a Mortgaged Property from the lien
of the related Mortgage, then prior to agreeing to such release, but
subject to its compliance with the terms of the Mortgage Loan documents,
the Master Servicer or the Special Servicer shall require Rating Agency
Confirmation and otherwise comply with the provisions of Section 12.1(i)
hereto.
(iii) The Special Servicer will promptly deliver to the
Master Servicer, the Operating Adviser (or if no Operating Adviser has
been elected, the Majority Certificateholder of the Controlling Class),
the Rating Agencies and the Trustee a notice, specifying any such
modifications, waivers or amendments, such notice identifying the
affected Specially Serviced Mortgage Loan. Such notice shall be
delivered to the Trustee and shall set forth the reasons for such
waiver, modification, or amendment (including, but not limited to,
information such as related income and expense statements, rent rolls,
occupancy status, property inspections, and an
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internal or external appraisal performed in accordance with MAI
standards and methodologies (and, if done externally, the cost of such
appraisal shall be recoverable as a Servicing Advance subject to the
provisions of Section 4.2 hereof)). The Special Servicer shall also
deliver to the Trustee (or the Custodian), for deposit in the related
Mortgage File, an original counterpart of the agreement relating to such
modification, waiver or amendment promptly following the execution
thereof.
(iv) No fee described in this Section shall be collected
by the Special Servicer from the Mortgagor (or on behalf of the
Mortgagor) in conjunction with any consent or any modification, waiver
or amendment of the Mortgage Loan if the collection of such fee would
cause such consent, modification, waiver or amendment to be a
"significant modification" of the Mortgage Note within the meaning of
Treasury Regulation ss. 1.860G-2(b). Subject to the foregoing, the
Special Servicer shall use its reasonable efforts, to collect any
modification fees and other expenses connected with a permitted
modification of a Mortgage Loan from the Mortgagor. The inability of the
Mortgagor to pay any costs and expenses of a proposed modification shall
not impair the right of the Special Servicer, the Master Servicer or the
Trustee to be reimbursed by the Trust for such expenses (including any
cost and expense associated with the Opinion of Counsel referred to in
this Section).
(v) The Special Servicer shall cooperate with the Master
Servicer (as provided in Section 8.6) in connection with assignments and
assumptions of Mortgage Loans that are not Specially Serviced Mortgage
Loans.
(vi) Notwithstanding anything herein to the contrary, the
Special Servicer shall not be permitted to take or refrain from taking
any action pursuant to instructions from the Operating Adviser that
would cause it to violate any term or provision of this Agreement,
including the REMIC Provisions and the Servicing Standard.
(c) The Master Servicer or Special Servicer shall be permitted,
in its discretion, to waive all or any accrued Excess Interest if, prior to the
related maturity date, the related borrower has requested the right to prepay
the Mortgage Loan in full together with all payments required by the Mortgage
Loan in connection with such prepayment except for all or a portion of accrued
Excess Interest, provided that the Master Servicer or Special Servicer, as
applicable, determines that (i) in the absence of the waiver of such Excess
Interest, there is a reasonable likelihood that the Mortgage Loan will not be
paid in full on the related Maturity Date and (ii) waiver of the right to such
accrued Excess Interest is reasonably likely to produce a greater payment in the
aggregate to Certificateholders on a net present value basis than a refusal to
waive the right to such Excess Interest. Any such waiver shall not be effective
until such prepayment is tendered.
SECTION 8.19. TITLE TO REO PROPERTY.
(a) If title to any REO Property is acquired, the deed or
certificate of sale shall be issued in the name of the Trustee or its nominee on
behalf of the Certificateholders. The Special Servicer, on behalf of the Trust
Fund, shall in accordance with Section 8.31 attempt to sell any REO Property for
cash by the close of the third taxable year of the REMIC following the taxable
year in which the Trust Fund acquires ownership of such REO Property for
purposes of Section 860G(a)(8) of the Code (such date, the "REO SALE DEADLINE"),
unless the Special Servicer either (i) applies for, more than 60 days prior to
the REO Sale Deadline, and is subsequently granted an extension of time (an "REO
EXTENSION") by the Internal Revenue Service to sell such REO Property, or (ii)
obtains for the Trustee an Opinion of Counsel, addressed to the Trustee and the
Special Servicer, to the effect that the holding by
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the Trust Fund of such REO Property subsequent to the REO Sale Deadline will not
result in the imposition of taxes on "prohibited transactions" of REMIC I, REMIC
II or REMIC III as defined in Section 860F of the Code or cause REMIC I, REMIC
II or REMIC III to fail to qualify as a REMIC at any time that any Certificates
are outstanding. If the Special Servicer is granted the REO Extension
contemplated by clause (i) of the immediately preceding sentence or obtains the
Opinion of Counsel contemplated by clause (ii) of the immediately preceding
sentence, the Special Servicer shall attempt to sell such REO Property within
such period beyond the REO Sale Deadline as is permitted by such REO Extension
or is contemplated by such Opinion of Counsel, as the case may be. Any expense
incurred by the Special Servicer in connection with its being granted the REO
Extension contemplated by clause (i) of the second preceding sentence or its
obtaining the Opinion of Counsel contemplated by clause (ii) of the second
preceding sentence, shall be an expense of the Trust Fund payable out of the
Collection Account pursuant to Section 5.2.
(b) The Special Servicer shall segregate and hold all revenues
received by it with respect to any REO Property separate and apart from its own
funds and general assets and shall establish and maintain with respect to any
REO Property a segregated custodial account (each, an "REO Account"), each of
which shall be an Eligible Account and shall be entitled "Norwest Bank
Minnesota, National Association, as Trustee for the Holders of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series 1999-FNV1,
REO Account." The Special Servicer shall be entitled to withdraw for its account
any interest or investment income earned on funds deposited in an REO Account.
The Special Servicer shall deposit or cause to be deposited in the REO Account
within one Business Day after receipt all REO Income, and shall withdraw
therefrom funds necessary for the proper operation, management and maintenance
of such REO Property, including:
(i) all insurance premiums due and payable in respect of
such REO Property;
(ii) all real estate taxes and assessments in respect of
such REO Property that may result in the imposition of a lien thereon;
(iii) any ground rents in respect of such REO Property;
and
(iv) all costs and expenses necessary to maintain,
protect, manage, operate, repair, sell or restore such REO Property.
To the extent that amounts on deposit in the related REO Account
are insufficient for the purposes set forth in clauses (i) - (iv) above with
respect to such REO Property, the Master Servicer (at the direction of the
Special Servicer) shall advance from its own funds as a Servicing Advance such
amount as is necessary for such purposes unless such advances would, if made,
constitute Nonrecoverable Advances; provided, however, that the Master Servicer
(at the direction of the Special Servicer) shall make any such Servicing Advance
if it is a necessary fee or expense incurred in connection with the defense or
prosecution of legal proceedings and such advance shall be deemed to constitute
a Nonrecoverable Servicing Advance.
The Special Servicer shall withdraw from each REO Account and
remit to the Master Servicer for deposit into the Collection Account on a
monthly basis prior to or on the related Due Date the REO Income received or
collected from each REO Property (net of expenses), except that in determining
the amount of such REO Income, the Special Servicer may retain in each REO
Account reasonable reserves for repairs, replacements and necessary capital
improvements and other related expenses.
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Funds in the REO Account may be invested and, if invested, shall
be invested by, and at the risk of, the Special Servicer in Eligible Investments
selected by the Special Servicer which shall mature, unless payable on demand,
not later than the Business Day immediately preceding the day such funds are
required to be withdrawn, and any such Eligible Investment shall not be sold or
disposed of prior to its maturity unless payable on demand. All such Eligible
Investments shall be made in the name of "Banc One Mortgage Capital Markets,
LLC, in trust for Norwest Bank Minnesota, National Association, as Trustee for
the Holders of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 1999-FNV1." None of the Depositor, the
Mortgagors, the Master Servicer or the Trustee shall be liable for any loss
incurred on such Eligible Investments.
An amount equal to all income and gain realized from any such
investment (to the extent not needed to offset losses from other investments)
shall be paid to the Special Servicer as Additional Special Servicing
Compensation and shall be subject to its withdrawal at any time from time to
time. The amount of any losses incurred in respect of any such investments shall
be for the account of the Special Servicer which shall deposit the amount of
such loss (to the extent not offset by income from other investments) in the REO
Account out of its own funds no later than the next succeeding Master Servicer
Remittance Date.
Except as expressly provided otherwise in this Agreement, if any
default occurs in the making of a payment due under any Eligible Investment, or
if a default occurs in any other performance required under any Eligible
Investment, the Trustee or the Special Servicer may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings; provided, however, that if the
Special Servicer shall have deposited in the REO Account an amount equal to all
amounts due under any such Eligible Investment (net of anticipated income or
earnings thereon that would have been payable to the Special Servicer as
additional servicing compensation), the Special Servicer shall have the sole
right to enforce such payment or performance.
SECTION 8.20. MANAGEMENT OF REO PROPERTY.
(a) Prior to the acquisition of title to any Mortgaged Property
securing a defaulted Mortgage Loan, the Special Servicer shall review the
operation of such Mortgaged Property and determine the nature of the income that
would be derived from such property if it were acquired by the Trust. If the
Special Servicer determines from such review, in its good faith and reasonable
judgment, that:
(i) none of the income from Directly Operating such
Mortgaged Property would be subject to tax as "net income from
foreclosure property" within the meaning of the REMIC Provisions or
would be subject to the tax imposed on "prohibited transactions" under
Section 860F of the Code (either such tax referred to herein as an "REO
TAX"), then such Mortgaged Property may be Directly Operated by the
Special Servicer as REO Property;
(ii) Directly Operating such Mortgaged Property as REO
Property could result in income from such Mortgaged Property that would
be subject to an REO Tax, but that a lease of such Mortgaged Property to
another party to operate such Mortgaged Property, or the performance of
some services by an Independent Contractor with respect to such
Mortgaged Property, or another method of operating such Mortgaged
Property would not result in income subject to an REO Tax, then the
Special Servicer may (provided that, in the good faith and reasonable
judgment of the Special Servicer, it is commercially feasible) acquire
such Mortgaged Property as REO Property and so lease or operate such REO
Property; or
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(iii) Directly Operating such Mortgaged Property as REO
Property could result in income subject to an REO Tax and, in the good
faith and reasonable judgment of the Special Servicer, that no
commercially feasible means exists to operate such Mortgaged Property as
REO Property without the Trust incurring or possibly incurring an REO
Tax on income from such Mortgaged Property, then the Special Servicer
shall deliver to the Trustee, in writing, a proposed plan (the "PROPOSED
PLAN") to manage such Mortgaged Property as REO Property. Such plan
shall include potential sources of income, and to the extent
commercially feasible, estimates of the amount of income from each such
source. Within a reasonable period of time after receipt of such plan,
the Trustee shall consult with the Special Servicer and shall advise the
Special Servicer of the Trust's federal income tax reporting position
with respect to the various sources of income that the Trust would
derive under the Proposed Plan. In addition, the Trustee shall (to the
maximum extent possible) advise the Special Servicer of the estimated
amount of taxes that the Trust would be required to pay with respect to
each such source of income. After receiving the information described in
the two preceding sentences from the Trustee, the Special Servicer shall
either (A) implement the Proposed Plan (after acquiring the respective
Mortgaged Property as REO Property) or (B) manage and operate such REO
Property in a manner that would not result in the imposition of an REO
Tax on the income derived from such REO Property.
The Special Servicer's decision as to how each REO Property shall
be managed and operated shall in any event be based on the good faith and
reasonable judgment of the Special Servicer, consistent with the Servicing
Standard, as to which means would (to the extent commercially feasible) maximize
the net after-tax REO Income received by the Trust with respect to such REO
Property without materially and adversely affecting the Special Servicer's
ability to sell such REO Property in accordance with this Agreement. Both the
Special Servicer and the Trustee may consult with counsel knowledgeable in such
matters at the expense of the Trust Fund in connection with determinations
required under this Section 8.20(a). Neither the Special Servicer nor the
Trustee shall be liable to the Certificateholders, the Trust, the other parties
hereto or each other for errors in judgment made in good faith in the reasonable
exercise of their discretion while performing their respective responsibilities
under this Section 8.20(a) or, to the extent it relates to federal income tax
consequences for the Trust, Section 8.20(b) below. Nothing in this Section
8.20(a) is intended to prevent the sale of a Defaulted Mortgage Loan or REO
Property pursuant to the terms and subject to the conditions of Section 8.31.
(b) If title to any REO Property is acquired, the Special
Servicer or an Independent Contractor chosen by the Special Servicer shall
manage, conserve, protect and operate such REO Property for the benefit of the
Certificateholders solely for the purpose of its prompt disposition and sale in
a manner that does not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code or
result in the receipt by the Trust of any "income from non-permitted assets"
within the meaning of Section 860F(a)(2)(B) of the Code or result in an Adverse
REMIC Event. Except as otherwise expressly provided herein, the Special Servicer
shall not enter into any lease, contract or other agreement that causes REMIC I
to receive, and (unless required to do so under any lease, contact or agreement
to which the Special Servicer or the Trust may become a party or a successor to
a party due to a foreclosure, deed-in-lieu of foreclosure or other similar
exercise of a creditor's rights or remedies with respect to a Mortgage Loan)
shall not cause or allow REMIC I to receive, any "net income from foreclosure
property" that is subject to taxation under the REMIC Provisions. Subject to the
foregoing, however, the Special Servicer shall have full power and authority to
do any and all things in connection therewith as are in the best interests of
and for the benefit of the Certificateholders in accordance with the Servicing
Standard (as determined by the Special Servicer in its good faith and reasonable
judgment).
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(c) The Special Servicer may contract with any Independent
Contractor for the operation and management of any REO Property, provided that:
(i) The terms and conditions of any such contract may not
be inconsistent herewith and shall reflect an agreement reached at arm's
length;
(ii) the fees of such Independent Contractor (which shall
be an expense of the Trust, payable out of related REO Income) shall be
reasonable and customary in light of the nature and locality of the REO
Property;
(iii) any such contract shall require, or shall be
administered to require, that the Independent Contractor (A) pay all
costs and expenses incurred in connection with the operation and
management of such REO Property, including, without limitation, those
listed in subsection (b) of this Section 8.20 and (B) remit all related
REO Income collected (net of its fees and such costs and expenses) to
the Special Servicer upon receipt;
(iv) none of the provisions of this Section 8.20(c)
relating to any such contract or to actions taken through any such
Independent Contractor shall be deemed to relieve the Special Servicer
of any of its duties and obligations hereunder with respect to the
operation and management of any such REO Property; and
(v) the Special Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all duties and
obligations in connection with the operation and management of such REO
Property.
The Special Servicer shall be entitled to enter into any agreement with any
Independent Contractor performing services for it related to its duties and
obligations hereunder for indemnification of the Special Servicer by such
Independent Contractor, and nothing in this Agreement shall be deemed to limit
or modify such indemnification.
SECTION 8.21. ADDITIONAL OBLIGATIONS OF THE MASTER SERVICER.
(a) The Master Servicer and the Special Servicer shall each
deliver to the other and to the Trustee (for inclusion in the Mortgage File)
copies of all Appraisals, environmental reports and engineering reports (or, in
each case, updates thereof) obtained with respect to any Mortgaged Property or
REO Property.
(b) The Master Servicer shall deliver to the Trustee for deposit
in the Distribution Account on each P&I Advance Date, without any right of
reimbursement therefor, an amount equal to the lesser of (i) the excess, if any,
of all Prepayment Interest Shortfalls over all Prepayment Interest Excesses, in
each case resulting from Principal Prepayments received in respect of the
Mortgage Pool during the most recently ended Collection Period, and (ii) that
portion of the aggregate Master Servicing Fees received by the Master Servicer
during such Collection Period calculated in respect of all Mortgage Loans at a
rate of 0.02% per annum.
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SECTION 8.22. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
MASTER SERVICER AND THE SPECIAL SERVICER.
(a) (i) The Master Servicer, in its capacity as Master Servicer
hereunder, hereby represents and warrants to the Trustee, for its own
benefit and the benefit of the Certificateholders, and to the Depositor,
as of the Closing Date, that:
(A) the Master Servicer is duly organized, validly
existing and in good standing as a limited partnership under the
laws of the State of Delaware, and is in compliance with the laws
of each State in which any Mortgaged Property is located to the
extent necessary to perform its obligations under this Agreement,
except where the failure to so qualify or comply would not
materially adversely affect the Master Servicer's ability to
perform its obligations hereunder in accordance with the terms of
this Agreement;
(B) the Master Servicer has the full power and
authority to execute, deliver, perform, and to enter into and
consummate all transactions and obligations contemplated by this
Agreement. The Master Servicer has duly and validly authorized
the execution, delivery and performance of this Agreement and
this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties hereto, evidences the valid
and binding obligation of the Master Servicer enforceable against
the Master Servicer in accordance with its terms subject, as to
enforcement of remedies, (A) to applicable bankruptcy,
reorganization, insolvency, moratorium, receivership and other
similar laws affecting creditors' rights generally as from time
to time in effect, (B) to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (C) public policy
considerations underlying the securities laws to the extent that
such considerations limit the enforceability of the provisions of
the Agreement that purport to provide for indemnification for
securities law violations;
(C) the execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby, and the
fulfillment of or compliance with the terms and conditions of
this Agreement on the part of the Master Servicer will not (A)
result in a breach of any term or provision of its organizational
documents or (B) conflict with, result in a breach, violation or
acceleration of, or result in a default under, the terms of any
other material agreement or instrument to which it is a party or
by which it may be bound, or any law, governmental rule,
regulation, or judgment, decree or order applicable to it of any
court, regulatory body, administrative agency or governmental
body having jurisdiction over it, which would materially and
adversely affect its ability to perform its obligations under
this Agreement;
(D) there is no litigation pending or, to the
Master Servicer's knowledge, threatened against it, the outcome
of which would, if adversely determined, reasonably be expected
to materially and adversely affect the execution, delivery and
performance by, or the enforceability against, the Master
Servicer of this Agreement or its ability to service the Mortgage
Loans or to perform any of its other obligations hereunder in
accordance with the terms hereof;
(E) no consent, approval, authorization,
qualification, registration, filing, notice or order of any court
or governmental agency or body is required for the
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execution, delivery and performance by the Master Servicer of, or
compliance by the Master Servicer with, this Agreement, or the
consummation of the transactions contemplated hereby, other than
any such consents, approvals, authorizations, qualifications,
registrations, filings, notices or orders as have been obtained
or made or where the lack of such consent, approval,
authorization, qualification, registration, filing, notice or
order would not have a material adverse effect on the performance
of the Master Servicer under this Agreement;
(F) the performance of the services by the Master
Servicer contemplated by this Agreement are in the ordinary
course of business of the Master Servicer; and
(G) the Master Servicer hereby covenants, to its
best knowledge, which may be based upon information obtained from
vendors who have responded to Master Servicer's supplier
inquiries and/or from information obtained by Master Servicer
from sources which Master Servicer reasonably believes are
reliable, that by August 31, 1999, any custom-made software or
hardware designed or purchased or licensed by Master Servicer,
which Master Servicer has identified as being mission-critical to
its business for purposes of its operations and for purposes of
compiling, reporting, or generating data required by this
Agreement, will be capable of accurately performing calculations
or other processing with respect to dates after August 31, 1999
as a result of the changing of the date from 1999 to 2000,
including leap year calculations, when used for the purpose for
which it was intended, assuming that all other products,
including other software or hardware, when used in combination
with such software or hardware designed or purchased or licensed
by the Master Servicer properly exchange date data.
(ii) It is understood that the representations and
warranties set forth in this Section 8.22(a) shall survive the execution
and delivery of this Agreement.
(iii) Upon discovery by any of the parties hereto of a
breach of any of the foregoing representations and warranties that
materially and adversely affects the interests of the Certificateholders
or any party hereto, the party discovering such breach shall give prompt
written notice to each of the other parties hereto.
(iv) Any successor Master Servicer shall be deemed to have
made, as of the date of its succession, each of the representations set
forth in Section 8.22(a)(i), subject to such appropriate modifications
to the representation and warranty set forth in Section 8.22(a)(i)(A) to
accurately reflect such successor's jurisdiction of organization and
whether it is a corporation, partnership, bank, association or other
type of organization.
(b) (i) The Special Servicer, in its capacity as Special
Servicer hereunder, hereby represents and warrants to the Trustee, for
its own benefit and the benefit of the Certificateholders, and to the
Depositor, as of the Closing Date, that:
(A) the Special Servicer is duly organized, validly
existing and in good standing as a limited liability company
under the laws of the State of Delaware, and is in compliance
with the laws of each State in which any Mortgaged Property is
located to the extent necessary to perform its obligations under
this Agreement, except where the failure to so qualify or comply
would not materially adversely affect the Special
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Servicer's ability to perform its obligations hereunder in
accordance with the terms of this Agreement;
(B) the Special Servicer has the full power and
authority to execute, deliver, perform, and to enter into and
consummate all transactions and obligations contemplated by this
Agreement. The Special Servicer has duly and validly authorized
the execution, delivery and performance of this Agreement and
this Agreement, assuming the due authorization, execution and
delivery thereof by the other parties hereto, evidences the valid
and binding obligation of the Special Servicer enforceable
against the Special Servicer in accordance with its terms
subject, as to enforcement of remedies, (A) to applicable
bankruptcy, reorganization, insolvency, moratorium, receivership
and other similar laws affecting creditors' rights generally as
from time to time in effect, (B) to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (C) public policy
considerations underlying the securities laws to the extent that
such considerations limit the enforceability of the provisions of
the Agreement that purport to provide for indemnification for
securities law violations;
(C) the execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby, and the
fulfillment of or compliance with the terms and conditions of
this Agreement on the part of the Special Servicer will not (A)
result in a breach of any term or provision of its charter or
by-laws or (B) conflict with, result in a breach, violation or
acceleration of, or result in a default under, the terms of any
other material agreement or instrument to which it is a party or
by which it may be bound, or any law, governmental rule,
regulation, or judgment, decree or order applicable to it of any
court, regulatory body, administrative agency or governmental
body having jurisdiction over it, which would materially and
adversely affect its ability to perform its obligations under
this Agreement;
(D) there is no litigation pending or, to the
Special Servicer's knowledge, threatened against it, the outcome
of which would, if adversely determined, reasonably be expected
to materially and adversely affect the execution, delivery and
performance by, or the enforceability against, the Special
Servicer of this Agreement or its ability to service the Mortgage
Loans or to perform any of its other obligations hereunder in
accordance with the terms hereof;
(E) no consent, approval, authorization,
qualification, registration, filing, notice or order of any court
or governmental agency or body is required for the execution,
delivery and performance by the Special Servicer of, or
compliance by the Special Servicer with, this Agreement, or the
consummation of the transactions contemplated hereby, other than
any such consents, approvals, authorizations, qualifications,
registrations, filings, notices or orders as have been obtained
or made or where the lack of such consent, approval,
authorization, qualification, registration, filing, notice or
order would not have a material adverse effect on the performance
of the Special Servicer under this Agreement; and
(F) the performance of the services by the Special
Servicer contemplated by this Agreement are in the ordinary
course of business of the Special Servicer.
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(G) The Special Servicer hereby covenants, to its
best knowledge, which may be based upon information obtained from
vendors who have responded to Special Servicer's supplier
inquiries and/or from information obtained by Special Servicer
from sources which Special Servicer reasonably believes are
reliable, that by August 31, 1999, any custom-made software or
hardware designed or purchased or licensed by Special Servicer,
which Special Servicer has identified as being mission-critical
to its business for purposes of its operations and for purposes
of compiling, reporting, or generating data required by this
Agreement, will be capable of accurately performing calculations
or other processing with respect to dates after August 31, 1999
as a result of the changing of the date from 1999 to 2000,
including leap year calculations, when used for the purpose for
which it was intended, assuming that all other products,
including other software or hardware, when used in combination
with such software or hardware designed or purchased or licensed
by the Special Servicer properly exchange date data.
(ii) It is understood that the representations and
warranties set forth in this Section 8.22(b) shall survive the execution
and delivery of this Agreement.
(iii) Upon discovery by any of the parties hereto of a
breach of any of the foregoing representations and warranties that
materially and adversely affects the interests of the Certificateholders
or any party hereto, the party discovering such breach shall give prompt
written notice to each of the other parties hereto.
(iv) Any successor Special Servicer shall be deemed to
have made, as of the date of its succession, each of the representations
set forth in Section 8.22(b)(i), subject to such appropriate
modifications to the representation and warranty set forth in Section
8.22(b)(i)(A) to accurately reflect such successor's jurisdiction of
organization and whether it is a corporation, partnership, bank,
association or other type of organization.
SECTION 8.23. MERGER OR CONSOLIDATION. Any Person into which the
Master Servicer or the Special Servicer may be merged or consolidated or to
which the Master Servicer or the Special Servicer has transferred all or
substantially all of its servicing assets, or any Person resulting from any
merger, conversion, other change in form or consolidation to which the Master
Servicer or the Special Servicer shall be a party, or any Person succeeding to
the business of the Master Servicer or the Special Servicer, shall be the
successor of the Master Servicer or the Special Servicer, as the case may be,
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto; provided, that Rating Agency Confirmation
shall have been obtained with respect to such merger, consolidation, or
succession.
SECTION 8.24. RESIGNATION OF MASTER SERVICER OR SPECIAL SERVICER.
(a) Except as otherwise provided in Section 8.24(b) hereof,
neither the Master Servicer nor the Special Servicer shall resign from the
obligations and duties hereby imposed on it, unless there is a determination
that its duties hereunder are no longer permissible under applicable law or are
in material conflict by reason of applicable law with any other activities
carried on by it (the other activities so causing such conflict being of a type
and nature carried on by it at the date of this Agreement). Any such
determination permitting the resignation of the Master Servicer or the Special
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Trustee. No such resignation shall become effective until a successor
servicer designated by the Trustee, with the consent of the Depositor, shall
have assumed the Master Servicer's or Special Servicer's, as the case may be,
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responsibilities and obligations under this Agreement and Rating Agency
Confirmation shall have been obtained. Notice of such resignation shall be given
promptly by the Master Servicer or the Special Servicer, as the case may be, to
the Trustee.
(b) The Master Servicer and the Special Servicer may each resign
from the obligations and duties imposed on it, upon 30 days notice to the
Trustee, provided that (i) a successor servicer (x) is available, (y) has assets
of at least $15,000,000 and (z) is willing to assume the obligations,
responsibilities, and covenants to be performed hereunder by the resigning party
on substantially the same terms and conditions, and for not more than equivalent
compensation, to that herein provided; (ii) the resigning party bears all costs
associated with its resignation and the transfer of servicing; and (iii) Rating
Agency Confirmation is obtained with respect to such servicing transfer, as
evidenced by a letter delivered to the Trustee by each Rating Agency.
SECTION 8.25. ASSIGNMENT OR DELEGATION OF DUTIES BY MASTER
SERVICER OR THE SPECIAL SERVICER. The Master Servicer and the Special Servicer
shall each have the right without the prior written consent of the Trustee to
assign and delegate all of its duties hereunder; provided, however, that (i) the
Master Servicer or the Special Servicer, as the case may be, gives the Depositor
and the Trustee notice of such assignment and delegation; (ii) such purchaser or
transferee accepting such assignment and delegation executes and delivers to the
Depositor and the Trustee an agreement accepting such assignment, which contains
an assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Master Servicer or the Special Servicer, as
the case may be, with like effect as if originally named as a party to this
Agreement; (iii) a Rating Agency Confirmation shall have been obtained with
respect to such assignment and delegation; and (iv) the assignment and
delegation is reasonably satisfactory to the Trustee and the Depositor, it being
understood that the delegations existing as of the Closing Date shall be deemed
satisfactory to the Trustee and the Depositor. In the case of any such
assignment and delegation in accordance with the requirements of this Section,
the Master Servicer or the Special Servicer, as the case may be, shall be
released from its obligations under this Agreement, except that the Master
Servicer or the Special Servicer, as the case may be, shall remain liable for
all liabilities and obligations incurred by it as the Master Servicer or the
Special Servicer, as the case may be, hereunder prior to the satisfaction of the
conditions to such assignment set forth in the preceding sentence.
Notwithstanding the above, each of the Master Servicer and the Special Servicer
may appoint Sub-Servicers in accordance with Section 8.4 hereof, provided that
the Master Servicer or the Special Servicer remains fully liable for their
actions, agents or independent contractors appointed or retained to perform
select duties thereof.
SECTION 8.26. LIMITATION ON LIABILITY OF MASTER SERVICER, SPECIAL
SERVICER AND OTHERS.
(a) None of the Master Servicer, the Special Servicer or any of
their respective directors, officers, employees or agents shall be under any
liability to the holders of the Certificates, the Trust or any other party for
any action taken or for refraining from the taking of any action in good faith
or for errors in reasonable judgment; provided that this provision shall not
protect the Master Servicer, the Special Servicer or any such Person against any
breach of a representation, warranty or covenant contained herein or any
liability that would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence in its performance of duties under this Agreement or by
reason of negligent disregard of obligations and duties hereunder. The Master
Servicer, the Special Servicer and any director, officer, employee or agent of
the Master Servicer or the Special Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any Person
respecting any matters arising hereunder. Neither the Master Servicer nor the
Special Servicer shall be under any obligation to appear
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in, prosecute or defend any legal action that is not incidental to its duties
under this Agreement; provided that the Master Servicer and the Special Servicer
each may in its sole discretion undertake any such action that it may reasonably
deem necessary or desirable in order to protect the interests of the
Certificateholders and the Trustee in the Mortgage Loans for which it is
responsible hereunder or otherwise under this Agreement. In such event, all
legal expenses and costs of such action shall be expenses and costs of the
Trust, and the Master Servicer or the Special Servicer, as applicable, shall be
entitled to be reimbursed therefor as Servicing Advances as provided by Section
5.2.
(b) In addition, neither the Master Servicer nor the Special
Servicer shall have any liability with respect to, and each shall be entitled to
conclusively rely as to the truth of the statements made and the correctness of
the opinions expressed therein on, any certificates or opinions furnished to the
Master Servicer or the Special Servicer, as the case may be, and conforming to
the requirements of this Agreement. Subject to the Servicing Standard, the
Master and the Special Servicer each shall have the right to rely on information
provided to it by the other (unless the Master Servicer and the Special Servicer
are the same party) and by the Mortgagors, and will have no duty to investigate
or verify the accuracy thereof.
(c) Neither the Master Servicer nor the Special Servicer shall be
obligated to incur any liabilities, costs, charges, fees or other expenses that
relate to or arise from any breach of any representation, warranty or covenant
made by the Depositor or Trustee in this Agreement.
SECTION 8.27. INDEMNIFICATION; THIRD-PARTY CLAIMS.
(a) The Master Servicer, the Special Servicer and each of their
respective directors, officers, members, managers, employees and agents shall be
indemnified by the Trust and held harmless against any and all claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments and any
other costs, liabilities, fees and expenses incurred in connection with any
legal action relating to this Agreement, the Certificates or any asset of the
Trust Fund, other than any loss, liability or expense: (i) specifically required
to be borne by such Person pursuant to the terms hereof; (ii) that constitutes a
Servicing Advance (and is otherwise specifically reimbursable hereunder); (iii)
that was incurred in connection with claims against such party resulting from
(A) any breach of a representation, warranty or covenant made herein by such
party, (B) willful misfeasance, bad faith or negligence in the performance of
obligations or duties hereunder by such party, or from negligent disregard of
such obligations or duties, or (C) any violation by such party of any state or
federal securities law; or (iv) imposed by any taxing authority if such loss,
liability or expense is not specifically reimbursable pursuant to the terms of
this Agreement. Each of the Master Servicer and the Special Servicer shall
promptly notify the Trustee if a claim is made by a third party with respect to
this Agreement, the Certificates or any asset of the Trust Fund entitling the
Master Servicer or the Special Servicer, as the case may be, to indemnification
hereunder, whereupon the Trustee, on behalf of the Trust, shall assume the
defense of any such claim (with counsel reasonably satisfactory to the Master
Servicer or the Special Servicer, as applicable) and pay out of the Collection
Account all expenses in connection therewith, including counsel fees, and
promptly pay, discharge and satisfy out of the Collection Account any judgment
or decree that may be entered against it or them in respect of such claim. Any
failure to so notify the Trustee shall not affect any rights the Master Servicer
or the Special Servicer may have to indemnification under this Agreement or
otherwise, unless the Trust's defense of such claim is prejudiced thereby and
the Trustee delivers a certification explaining the prejudice. The Trustee or
the Master Servicer shall promptly make from the Collection Account any payments
certified by the Master Servicer or the Special Servicer to the Trustee as
required to be made to the Master Servicer or the Special Servicer, as the case
may be, pursuant to this
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Section 8.27(a). The indemnification provided herein shall survive the
resignation or termination of the Master Servicer or the Special Servicer.
(b) The Master Servicer agrees to indemnify the Trust, the
Trustee, the Special Servicer (if different than the Master Servicer), the
Depositor, and any director, officer, manager, member, employee or agent
thereof, and hold them harmless against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments and any other costs,
liabilities, fees and expenses that any of them may sustain arising from or as a
result of the willful misfeasance, bad faith or negligence in the performance of
any of the Master Servicer's duties hereunder or by reason of negligent
disregard of the Master Servicer's obligations and duties hereunder (unless such
claim, loss, penalty, fine, forfeiture, legal fee and related cost or judgment
results from the willful misfeasance, bad faith or negligence of such
indemnified party), and if in any such situation the Master Servicer is
replaced, the parties hereto agree that the amount of such claims, losses,
penalties, fines, forfeitures, legal fees and related costs, judgments and other
costs, liabilities, fees and expenses shall at least equal the incremental
costs, if any, of retaining a successor Master Servicer. Each of the Trustee,
the Depositor and the Special Servicer (if different than the Master Servicer)
shall immediately notify the Master Servicer if a claim is made by a third party
with respect to this Agreement, the Certificates or any asset of the Trust Fund
entitling the Trust, the Trustee, the Depositor, or the Special Servicer, as the
case may be, to indemnification hereunder, whereupon the Master Servicer shall
assume the defense of any such claim (with counsel reasonably satisfactory to
the Trustee, the Depositor or the Special Servicer, as applicable) and pay all
expenses in connection therewith, including counsel fees, and promptly pay,
discharge and satisfy any judgment or decree that may be entered against it or
them in respect of such claim. Any failure to so notify the Master Servicer
shall not affect any rights the Trust, the Trustee, the Depositor or Special
Servicer may have to indemnification under this Agreement or otherwise, unless
the Master Servicer's defense of such claim is materially prejudiced thereby and
the Master Servicer delivers a certification explaining the prejudice. The
indemnification provided herein shall survive the termination of this Agreement
and the resignation or termination of the Master Servicer, the Special Servicer
and the Trustee.
(c) The Special Servicer agrees to indemnify the Trust, the
Trustee, the Master Servicer (if different than the Special Servicer), the
Depositor, and any director, officer, employee or agent thereof, and hold them
harmless against any and all claims, losses, penalties, fines, forfeitures,
legal fees and related costs, judgments and any other costs, liabilities, fees
and expenses that any of them may sustain arising from or as a result of the
willful misfeasance, bad faith or negligence in the performance of any of the
Special Servicer's duties hereunder or by reason of negligent disregard of the
Special Servicer's obligations and duties hereunder by the Special Servicer
(unless such claim, loss, penalty, fine, forfeiture, legal fee and related cost
or judgment results from the willful misfeasance, bad faith or negligence of
such indemnified party). Each of the Trustee, the Master Servicer (if different
than the Special Servicer) and the Depositor shall immediately notify the
Special Servicer if a claim is made by a third party with respect to this
Agreement, the Certificates or any asset of the Trust Fund entitling the Trust
or the Trustee, the Master Servicer or the Depositor, as the case may be, to
indemnification hereunder, whereupon the Special Servicer shall assume the
defense of any such claim (with counsel reasonably satisfactory to the Trustee,
the Master Servicer or the Depositor, as applicable) and pay all expenses in
connection therewith, including counsel fees, and promptly pay, discharge and
satisfy any judgment or decree that may be entered against it or them in respect
of such claim. Any failure to so notify the Special Servicer shall not affect
any rights the Trust, the Trustee, the Master Servicer or the Depositor may have
to indemnification under this Agreement or otherwise, unless the Special
Servicer's defense of such claim is materially prejudiced thereby. The
indemnification provided herein shall
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survive the termination of this Agreement and the resignation or termination of
the Special Servicer, the Master Servicer and the Trustee.
SECTION 8.28. TAX REPORTING. From and after the Closing Date, the
Special Servicer shall comply with the Mortgagor tax reporting requirements
imposed by Sections 6050H, 6050J and 6050P of the Code and any similar tax
reporting obligations under State law with respect to any Specially Serviced
Mortgage Loan. The Special Servicer shall provide to the Master Servicer copies
of any such reports. The Master Servicer shall forward such reports to the
Trustee.
SECTION 8.29. CERTAIN SPECIAL SERVICER REPORTS.
(a) The Special Servicer, in the case of any Specially Serviced
Mortgage Loans will deliver, at such times as are set forth in Section 8.14(f),
the reports set forth in Section 8.14(f), and will include a report, which shall
contain a narrative description for each Specially Serviced Mortgage Loan of the
current status of such Mortgage Loan. The Special Servicer will also deliver any
additional reports as may be reasonably agreed upon by the Operating Adviser and
the Special Servicer for a reasonable fee payable by the Operating Adviser.
(b) The Special Servicer shall maintain accurate records,
prepared by a Servicing Officer, of each Final Recovery Determination with
respect to any Mortgage Loan or REO Property and the basis thereof. Each Final
Recovery Determination shall be evidenced by an Officer's Certificate delivered
to the Trustee, the Master Servicer and the Operating Adviser (or if no
Operating Adviser has been elected, the Majority Certificateholder of the
Controlling Class) no later than the tenth Business Day following such Final
Recovery Determination.
(c) In addition, no later than 30 days after a Servicing Transfer
Event for a Mortgage Loan, the Special Servicer shall deliver to the Master
Servicer, each Rating Agency and the Operating Adviser (or if no Operating
Adviser has been elected, the Majority Certificateholder of the Controlling
Class) a report (the "ASSET STATUS REPORT") with respect to such Mortgage Loan
and the related Mortgaged Property. Such Asset Status Report shall set forth the
following information to the extent reasonably determinable:
(i) summary of the status of such Specially Serviced
Mortgage Loan and any negotiations with the related Mortgagor;
(ii) the most current rent roll and income or operating
statement available for the related Mortgaged Property;
(iii) upon receipt of an Appraisal, the Appraised Value of
the Mortgaged Property together with the assumptions used in the
calculation thereof; and
(iv) such other information as the Special Servicer deems
relevant in light of the Servicing Standard.
(d) If the Operating Advisor disapproves of an Asset Status
Report, the Operating Advisor shall, within ten (10) Business Days of receiving
such Asset Status Report, provide notice in writing to the Special Servicer of
such disapproval, and the Special Servicer shall, subject to Section 8.29(e),
revise such Asset Status Report and deliver to the Operating Advisor, the Rating
Agencies and the Master Servicer a new Asset Status Report as soon as
practicable, but in no event later than thirty (30) days after such disapproval.
If the Operating Advisor does not disapprove of an Asset Status Report
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within such ten (10) Business Day period, the Special Servicer shall implement
the recommended action as outlined in such Asset Status Report (provided that
the Special Servicer shall not take any action that is contrary to applicable
law or the terms of the applicable loan documents). The Special Servicer shall,
subject to Section 8.29(e), revise such Asset Status Report as provided above in
this paragraph until the earliest of (a) the failure of the Operating Advisor to
disapprove such revised Asset Status Report in writing within ten (10) Business
Days of its receipt thereof; (b) a determination by the Special Servicer as set
forth below or (c) the passage of ninety (90) days from the date of preparation
of the first Asset Status Report. The Special Servicer may, from time to time,
subject to Section 8.29(e), modify any Asset Status Report it has previously
delivered and implement the new action in such revised report so long as such
revised report has been prepared, reviewed and not rejected as provided above.
Notwithstanding the prior paragraph, the Special Servicer may:
(i) take any action set forth in an Asset Status Report before the expiration of
the ten (10) Business Day period during which the Operating Advisor may reject
such report if (A) the Special Servicer has reasonably determined that failure
to take such action would materially and adversely affect the interests of the
Certificateholders and (B) it has made a reasonable effort to contact the
Operating Advisor; and (ii) determine whether any affirmative disapproval of an
Asset Status Report is not in the best interest of all the Certificateholders
pursuant to the Servicing Standard. Upon making any such determination referred
to in clause (ii) of the prior sentence, the Special Servicer shall notify the
Trustee of such determination and deliver to the Trustee a proposed notice to
Certificateholders which is to include a copy of the relevant Asset Status
Report. The Trustee shall thereupon send such notice to all Certificateholders;
and, if the Holders of Certificates representing a majority of the Voting Rights
fail, within ten (10) Business Days of the Trustee's sending such notice, to
reject such Asset Status Report, the Special Servicer shall implement the same.
If the Asset Status Report is rejected within such ten (10) Business Day period
by the Holders of Certificates representing a majority of the Voting Rights, the
Special Servicer shall, subject to Section 8.29(e), revise such Asset Status
Report as described above. The Trustee shall be entitled to reimbursement from
the Trust Fund for the reasonable out-of-pocket expenses of providing such
notices.
The Special Servicer may not take any action inconsistent with an
Asset Status Report that has been adopted as described above, unless such action
would be required in order to act in accordance with the Servicing Standard.
(e) Notwithstanding anything herein to the contrary, any action
recommended by the Special Servicer in an Asset Status Report (or any revision
thereof) shall be consistent with the Servicing Standard, and the Operating
Advisor may not direct the Special Servicer to act in any manner (and the
Special Servicer shall disregard any such direction) that would:
(i) require or cause the Special Servicer to violate the
terms of a Specially Serviced Mortgage Loan, applicable law or any provision of
this Agreement, including the Special Servicer's obligation to act in accordance
with the Servicing Standard; or
(ii) result in an Adverse REMIC Event with respect to any
REMIC Pool or otherwise have a material adverse effect on the grantor trust
created hereunder; or
(iii) expose the Master Servicer, the Special Servicer,
the Depositor, any Seller, the Trust Fund, the Trustee or their Affiliates,
officers, directors, employees or agents to any claim, suit or liability; or
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(iv) materially expand the scope of the Special Servicer's, the
Master Servicer's or the Trustee's responsibilities under this Agreement.
In addition, the Special Servicer shall not have any obligation
to consult with or notify any Operating Advisor prior to acting, and the
provisions of this Agreement requiring such shall be of no effect, during the
period prior to the initial selection of a Operating Advisor and, if any
Operating Advisor resigns or is removed, during the period following such
resignation or removal until a replacement is selected.
(f) The Special Servicer will provide a summary of whether it
intends to foreclose or work out the Mortgage Loan.
SECTION 8.30. QUALIFICATION TO SERVICE. The Master Servicer and
the Special Servicer shall each keep in full force and effect such
qualifications to do business and any necessary licenses as are necessary to
perform its duties under this Agreement.
SECTION 8.31. SALE OF DEFAULTED MORTGAGE LOANS AND REO PROPERTIES.
(a) The Special Servicer may offer to sell for cash to any Person
any REO Property or Defaulted Mortgage Loan. In the case of REO Property, the
Special Servicer shall offer to sell such REO Property no later than the time
determined by the Special Servicer to be sufficient to result in the sale of
such REO Property on or prior to the date specified in Section 8.19(a), and in
any event prior to the Rated Final Distribution Date. The Special Servicer shall
give the Operating Adviser and the Trustee not less than five days' prior
written notice of its intention to sell any such Defaulted Mortgage Loan or REO
Property, and in respect of such sale, the Special Servicer shall offer such
Defaulted Mortgage Loan or REO Property for sale in a fair auction or other
manner as is consistent with the Servicing Standard and shall accept the highest
cash bid received in such auction or other procedure from any Person other than
an Interested Person for any Defaulted Mortgage Loan or REO Property in an
amount, except as otherwise provided in this Section, at least equal to the
Purchase Price therefor.
In the absence of a bid in an amount at least equal to the
Purchase Price (after deducting allocable expenses), the Special Servicer shall
accept the highest cash bid received from any Person other than any Interested
Person or the Trustee in its individual capacity, unless the Special Servicer
has received other bids, the Interested Party's bid is the highest bid, and the
Special Servicer (in consultation with the Trustee) determines that acceptance
of such bid is in the best interest of the Certificateholders.
The Special Servicer shall not be obligated by either of the
foregoing paragraphs or otherwise to accept the highest cash bid if the Special
Servicer determines, in accordance with the Servicing Standard, that rejection
of such bid would be in the best interests of the Certificateholders. In
addition, the Special Servicer may accept a lower bid (including a bid lower
than the Purchase Price) if it determines, in accordance with the Servicing
Standard, that acceptance of such bid would be in the best interests of the
Certificateholders (for example, if the prospective buyer making the lower bid
is more likely to perform its obligations, or the terms offered by the
prospective buyer making the lower bid are more favorable). The Special Servicer
shall determine no later than six months prior to the end of the REO Sale
Deadline with respect to any REO Property whether a sale of such REO Property
pursuant to any bids being made with respect thereto is in the best economic
interests of the Certificateholders as a whole. If the Special Servicer so
determines in accordance with the Servicing Standard that such a sale would not
be in the best interests of the Certificateholders, the Special Servicer shall
seek an extension of such period in the manner described in Section 8.19.
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(b) Subject to the REMIC Provisions, the Special Servicer shall
act on behalf of the Trust in negotiating and taking any other action necessary
or appropriate in connection with the sale of any Defaulted Mortgage Loan or REO
Property, including the collection of all amounts payable in connection
therewith. Any sale of a Defaulted Mortgage Loan or REO Property shall be
without recourse to, or representation or warranty by, the Trustee, the
Depositor, the Special Servicer, the Master Servicer, or the Trust. None of the
Special Servicer, the Master Servicer, the Depositor or the Trustee shall have
any liability to the Trust or any Certificateholder with respect to the price at
which a Defaulted Mortgage Loan is sold if the sale is consummated in accordance
with the terms of this Agreement.
(c) The proceeds of any sale after deduction of the expenses of
such sale incurred in connection therewith shall be deposited within one
Business Day in the Collection Account.
(d) Notwithstanding anything herein to the contrary, the Special
Servicer shall not be required to take or refrain from taking any action
pursuant to instructions from (or which require the approval of) the Operating
Adviser that would cause it to violate any term or provision of this Agreement,
the REMIC Provisions or the Servicing Standard.
SECTION 8.32. OPERATING ADVISER; ELECTIONS.
(a) In accordance with Section 8.32(c), the Holders of
Certificates representing more than 50% of the Class Principal Balance of the
Controlling Class shall be entitled to elect an operating adviser (the
"OPERATING ADVISER") with the powers set forth in Section 8.33. An election of
an Operating Adviser may also be held upon the resignation or removal of any
Person acting as Operating Adviser. The initial election of an Operating Adviser
may be held at any time on or after the Closing Date.
(b) At the request of the Holders of Certificates representing at
least 50% of the Class Principal Balance of the Controlling Class, the Trustee
shall call a meeting of the Holders of the Controlling Class for purpose of
electing an Operating Adviser. Notice of the meeting shall be mailed or
delivered by the Trustee to each Holder of Certificates of the Controlling Class
not less than 10 nor more than 60 days prior to the meeting. The notice shall
state the place and the time of the meeting, which may be held by telephone.
Holders of Certificates representing a majority of the Class Principal Balance
of the Controlling Class, present in person or represented by proxy, shall
constitute a quorum for the nomination of an Operating Adviser. At the meeting,
each Holder shall be entitled to nominate one Person to act as Operating
Adviser. The Trustee shall cause the election of the Operating Adviser to be
held as soon thereafter as is reasonably practicable.
(c) Each Holder of Certificates of the Controlling Class shall be
entitled to vote in each election of the Operating Adviser. The voting in each
election of the Operating Adviser shall be in writing mailed, telecopied,
delivered or sent by courier and actually received by the Trustee on or prior to
the date of such election. Immediately upon receipt by the Trustee of votes
(which have not been rescinded) from the Holders of Certificates representing
more than 50% of the Class Principal Balance of the Controlling Class which are
cast for a single Person, such Person shall be, upon such Person's acceptance,
the Operating Adviser. The Trustee shall act as judge of each election and,
absent manifest error, the determination of the results of any election by the
Trustee shall be conclusive. Notwithstanding any other provisions of this
Section 8.32, the Trustee may make such reasonable regulations as it may deem
advisable for any election.
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(d) The Operating Adviser may be removed at any time by the
written vote, copies of which must be delivered to the Trustee, of the Holders
of the Certificates representing more than 50% of the Class Principal Balance of
the Controlling Class.
(e) For purposes of electing or removing an Operating Adviser,
Certificates of the Controlling Class held by the Depositor, the Master Servicer
or the Special Servicer or by any Affiliate of any of them shall be taken into
account with the same force and effect as if any other Person held such
Certificates.
(f) The Operating Advisor will have no liability to the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that the Operating Advisor will not be protected against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or negligence in the performance of duties or by reason of reckless
disregard of obligations or duties. Each Certificateholder acknowledges and
agrees, by its acceptance of its Certificates, that the Operating Advisor may
have special relationships and interests that conflict with those of Holders of
one or more Classes of Certificates, that the Operating Advisor may act solely
in the interests of the Holders of the Controlling Class, that the Operating
Advisor does not have any duties to the Holders of any Class of Certificates
other than the Controlling Class, that the Operating Advisor may take actions
that favor interests of the Holders of the Controlling Class over the interests
of the Holders of one or more other Classes of Certificates, that the Operating
Advisor shall not be deemed to have been negligent or reckless, or to have acted
in bad faith or engaged in willful misfeasance, by reason of its having acted
solely in the interests of the Holders of the Controlling Class, and that the
Operating Advisor shall have no liability whatsoever for having so acted, and no
Certificateholder may take any action whatsoever against the Operating Advisor
or any director, officer, employee, agent or principal thereof for having so
acted.
SECTION 8.33. DUTIES OF OPERATING ADVISER.
(a) If an Operating Adviser has been elected and is currently
acting in such capacity, then, at least five days prior to the Special
Servicer's taking any of the following actions, the Special Servicer shall
notify such Operating Adviser of its intention to take such action:
(i) any foreclosure upon or comparable conversion (which
may include acquisition of an REO Property) of the ownership of
properties securing such of the Specially Serviced Mortgage Loans as
come into and continue in default;
(ii) any modification of a Money Term of a Mortgage Loan
(other than a modification consisting of the extension of the original
Maturity Date of such Mortgage Loan for two years or less);
(iii) any sale of a Defaulted Mortgage Loan or REO
Property pursuant to Section 8.31;
(iv) any determination to bring a Mortgaged Property or an
REO Property into compliance with Environmental Laws; and
(v) any acceptance of substitute or additional collateral
for a Mortgage Loan.
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(b) The Operating Adviser, if any, may direct the Trustee to
remove the Special Servicer at any time effective upon the appointment and
written acceptance of such appointment by a successor to the Special Servicer
appointed by the Operating Adviser; provided that, prior to the effectiveness of
any such appointment the Operating Adviser and the Trustee shall have received:
(i) Rating Agency Confirmation; and (ii) an Opinion of Counsel (which shall not
be an expense of the Trustee or Trust) to the effect that this Agreement shall
be enforceable against the designated successor in accordance with its terms.
The existing Special Servicer shall be deemed to have resigned simultaneously
with such designated successor's becoming the Special Servicer hereunder;
provided, however, that (i) the resigning Special Servicer shall continue to be
entitled to receive all amounts accrued or owing to it under this Agreement on
or prior to the effective date of such resignation, whether in respect of
Servicing Advances or otherwise, and (ii) it and its directors, officers,
employees and agents shall continue to be entitled to the benefits of Sections
8.26 and 8.27, notwithstanding any such resignation. Such resigning Special
Servicer shall cooperate with the Trustee and the replacement Special Servicer
in effecting the termination of the resigning Special Servicer's
responsibilities and rights hereunder, including, without limitation, the
transfer within two Business Days to the replacement Special Servicer for
administration by it of all cash amounts that shall at the time be or should
have been deposited in the Collection Account or delivered by the Special
Servicer to the Master Servicer or that are thereafter received with respect to
Specially Serviced Mortgage Loans and REO Properties.
SECTION 8.34. EXCHANGE ACT REPORTING. The Trustee shall, at the
Trustee's expense, prepare for filing, execute and properly file with the
Securities and Exchange Commission, any and all reports, statements and
information, including, without limitation Form 10-K, Form 10-Q and Form 8-K,
respecting the Trust Fund and/or the Certificates required or specifically
provided herein to be filed on behalf of the Trust under the Exchange Act. The
Master Servicer and the Special Servicer shall provide any items required to be
delivered by either of them under this Agreement in Microsoft Word or in such
other mutually acceptable format for conversion to ▇▇▇▇▇ format for electronic
filing via the ▇▇▇▇▇ system (in addition to any other required format). The
Trustee shall, at the Trustee's expense and in accordance with and to the extent
permitted by applicable law, file a Form 15 relating to automatic termination of
reporting in respect of the Trust under the Exchange Act.
SECTION 8.35. AUTOMATIC RESIGNATION OF MASTER SERVICER AND
SPECIAL SERVICER IN CONNECTION WITH AN ADVERSE RATING EVENT.
(a) The Master Servicer or the Special Servicer, as the case may
be, shall be required to immediately resign if the Master Servicer or the
Special Servicer, as the case may be, is no longer "approved" by S&P to act in
such capacity, and the Master Servicer or Special Servicer, as applicable, shall
not have again become "approved" within ninety (90) days thereafter (an "Adverse
Rating Event").
(b) No resignation pursuant to this Section 8.35 shall become
effective until the Trustee or other successor shall have assumed the
responsibilities and obligations of the resigning party hereunder in accordance
with Section 9.2, and provided, further, that if the Master Servicer or the
Special Servicer, whichever is the cause for the actual or prospective Adverse
Rating Event, fails to resign, then the Trustee shall terminate such party
hereunder in the manner and with the effect specified in Section 9.1 as if an
uncured Event of Default then existed with respect to such party.
(c) The cure periods provided to the Master Servicer and the
Special Servicer pursuant to this Section 8.35 shall be extended by the Trustee
at the request of the Master Servicer or Special Servicer so long as S&P
confirms in writing to the Trustee that such extension will not result in
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the downgrade, qualification or withdrawal of any rating then assigned by S&P to
any Class of Certificates.
ARTICLE IX.
DEFAULT
SECTION 9.1. EVENTS OF DEFAULT.
(a) "EVENT OF DEFAULT", wherever used herein, means any one of
the following events:
(i) (A) any failure by the Master Servicer to make a
required deposit to the Collection Account which continues unremedied
for one Business Day following the date on which such deposit was first
required to be made, or (B) any failure by the Master Servicer to
deposit into, or to remit to the Trustee for deposit into, the
Distribution Account any amount required to be so deposited or remitted,
which failure is not remedied by 3:00 p.m. (New York City time) on the
relevant Master Servicer Remittance Date; or
(ii) any failure by the Special Servicer to deposit into,
or to remit to the Master Servicer for deposit into, the Collection
Account or REO Account any amount required to be so deposited or
remitted under this Agreement which failure continues unremedied for one
Business Day following the date on which such deposit or remittance was
first required to be made; or
(iii) any failure by the Master Servicer or the Special
Servicer to timely make any Servicing Advance required to be made by it
pursuant to this Agreement which continues unremedied for a period
ending on the earlier of (A) 15 days following the date such Servicing
Advance was first required to be made, and (B) either, if applicable,
(1) in the case of a Servicing Advance relating to the payment of
insurance premiums, the day on which such insurance coverage terminates
if such premiums are not paid or (2) in the case of a Servicing Advance
relating to the payment of real estate taxes, the date of the
commencement of a foreclosure action with respect to the failure to make
such payment; or
(iv) any failure on the part of the Master Servicer or the
Special Servicer duly to observe or perform in any material respect any
other of the covenants or agreements on the part of the Master Servicer
or the Special Servicer contained in this Agreement which continues
unremedied for a period of 30 days after the date on which written
notice of such failure, requiring the same to be remedied, shall have
been given to the Master Servicer or the Special Servicer, as the case
may be, by the Trustee or the Depositor, or to the Master Servicer or
the Special Servicer, as the case may be, the Depositor and the Trustee
by the Holders of Certificates entitled to not less than 25% of the
Voting Rights; or
(v) any breach on the part of the Master Servicer or the
Special Servicer of any representation or warranty contained in this
Agreement which materially and adversely affects the interests of any
Class of Certificateholders and which continues unremedied for a period
of 30 days after the date on which notice of such breach, requiring the
same to be remedied, shall have been given to the Master Servicer or the
Special Servicer, as the case may be, by the Trustee or the Depositor,
or to the Master Servicer or the Special Servicer, as the case may
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be, the Depositor and the Trustee by the Holders of Certificates
entitled to not less than 25% of the Voting Rights; or
(vi) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law for the appointment of a conservator, receiver, liquidator,
trustee or similar official in any bankruptcy, insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings, or
for the winding-up or liquidation of its affairs, shall have been
entered against the Master Servicer or the Special Servicer and such
decree or order shall have remained in force undischarged or unstayed
for a period of 60 days; or
(vii) the Master Servicer or the Special Servicer shall
consent to the appointment of a conservator, receiver, liquidator,
trustee or similar official in any bankruptcy, insolvency, readjustment
of debt, marshaling of assets and liabilities or similar proceedings of
or relating to it or of or relating to all or substantially all of its
property; or
(viii) the Master Servicer or the Special Servicer shall
admit in writing its inability to pay its debts generally as they become
due, file a petition to take advantage of any applicable bankruptcy,
insolvency or reorganization statute, make an assignment for the benefit
of its creditors, voluntarily suspend payment of its obligations, or
take any corporate action in furtherance of the foregoing; or
(ix) the Trustee shall have received written notice from
Fitch that the continuation of the Master Servicer or the Special
Servicer in such capacity would result in the downgrade, qualification
(which shall not include a "negative" credit watch) or withdrawal of any
rating then assigned by Fitch to any Class of Certificates
(b) If any Event of Default with respect to the Master Servicer
or the Special Servicer (in either case for purposes of this Section 9.1(b), the
"DEFAULTING Party") shall occur and be continuing, then, and in each and every
such case, so long as such Event of Default shall not have been remedied, the
Depositor or the Trustee may terminate, and at the written direction of the
Holders of Certificates entitled to at least 25% of the Voting Rights, the
Trustee shall terminate, by notice in writing to the Defaulting Party, with a
copy of such notice to the Depositor (if the termination is effected by the
Trustee) or to the Trustee (if the termination is effected by the Depositor),
all of the rights and obligations of the Defaulting Party under this Agreement
and in and to the Mortgage Loans and the proceeds thereof (other than any rights
of the Defaulting Party as Certificateholder and for recovery of amounts due the
Defaulting Party out of the proceeds of the Mortgage Loans). From and after the
receipt by the Defaulting Party of such written notice, all authority and power
of the Defaulting Party under this Agreement, whether with respect to the
Certificates (other than as a Holder of any Certificate) or the Mortgage Loans
or otherwise, shall pass to and be vested in the Trustee pursuant to and under
this Section, and, without limitation, the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of and at the expense of the
Defaulting Party, as attorney-in-fact or otherwise, any and all documents and
other instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. The Master Servicer and the Special Servicer
each agrees that if it is terminated pursuant to this Section 9.1(b), it shall
promptly (and in any event no later than ten Business Days subsequent to its
receipt of the notice of termination) provide the Trustee with all documents and
records requested by the Trustee to enable it or a
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successor servicer to assume the Master Servicer's or Special Servicer's, as the
case may be, functions hereunder, and shall cooperate with the Trustee in
effecting the termination of the Master Servicer's or Special Servicer's, as the
case may be, responsibilities and rights hereunder, including, without
limitation, the transfer within two Business Days to the Trustee or a successor
servicer for administration by it of all cash amounts that shall at the time be
or should have been credited by the Master Servicer or the Special Servicer, as
the case may be, to the Collection Account, the Distribution Account or any
Servicing Account or thereafter be received with respect to the Mortgage Loans
or any REO Property (provided, however, that the Master Servicer and the Special
Servicer each shall continue to be entitled to receive all amounts accrued or
owing to it under this Agreement on or prior to the date of such termination,
whether in respect of Advances (together with Advance Interest thereon) made by
it or otherwise, and it and its directors, officers, employees and agents shall
continue to be entitled to the benefits of Sections 8.26 and 8.27
notwithstanding any such termination).
SECTION 9.2. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR. On and
after the time the Master Servicer or the Special Servicer receives a notice of
termination pursuant to Section 9.1, the Trustee shall be the successor in all
respects to the Master Servicer or the Special Servicer, as the case may be, in
its capacity as such under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities (except for liabilities incurred prior to the Event of Default)
relating thereto and arising thereafter placed on the Master Servicer or the
Special Servicer, as the case may be, by the terms and provisions hereof,
including, without limitation, the Master Servicer's obligation to make P&I
Advances; provided that any failure to perform such duties or responsibilities
caused by the Master Servicer's or the Special Servicer's failure to provide
information or monies required by Section 9.1 shall not be considered a default
by the Trustee hereunder. The Trustee shall not be liable for any of the
representations and warranties of the Master Servicer or the Special Servicer
and the Trustee shall not be required to purchase any Mortgage Loan hereunder.
As compensation therefor, the Trustee shall be entitled to the applicable
Servicing Fees and all funds relating to the Mortgage Loans that the Master
Servicer or the Special Servicer would have been entitled to charge to the
Collection Account if the Master Servicer or the Special Servicer had continued
to act hereunder. Notwithstanding the above, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act or if the Holders of
Certificates entitled to at least 51% of the Voting Rights so request in writing
to the Trustee or if it is not appropriately rated as an approved master
servicer or special servicer, as the case may be, by each Rating Agency,
promptly appoint, or petition a court of competent jurisdiction for the
appointment of, a mortgage loan servicing institution that has a net worth of
not less than $15,000,000 and is otherwise acceptable to each Rating Agency (as
evidenced by Rating Agency Confirmation), as the successor to the Master
Servicer or the Special Servicer, as the case may be, hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the Master Servicer or the Special Servicer. No appointment of a successor to
the Master Servicer or the Special Servicer hereunder shall be effective until
the assumption by the successor to the Master Servicer or the Special Servicer
of all the responsibilities, duties and liabilities of the Master Servicer or
the Special Servicer, as the case may be, hereunder. Pending appointment of a
successor to the Master Servicer or the Special Servicer hereunder, the Trustee
shall act in such capacity as hereinabove provided and shall be entitled to such
compensation as would otherwise have been payable to the Master Servicer or the
Special Servicer, as the case may be. In connection with any such appointment
and assumption described herein, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans or otherwise as
it and such successor shall agree; provided, however, that no such compensation
shall be in excess of that permitted the resigning or terminated party
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession.
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SECTION 9.3. NOTIFICATION TO CERTIFICATEHOLDERS.
(a) Upon any resignation of the Master Servicer or the Special
Servicer pursuant to Section 8.24, any termination of the Master Servicer or the
Special Servicer pursuant to Section 9.1 or any appointment of a successor to
the Master Servicer or the Special Servicer pursuant to Section 9.2, the Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register.
(b) Not later than the later of (i) 60 days after the occurrence
of any event which constitutes or, with notice or lapse of time or both, would
constitute an Event of Default and (ii) five days after the Trustee discovers or
is notified of the occurrence of such an event, the Trustee shall transmit by
mail to the Depositor and all Certificateholders notice of such occurrence,
unless such default shall have been cured.
SECTION 9.4. WAIVER OF EVENTS OF DEFAULT. The Holders of
Certificates entitled to at least 66 2/3% of the Voting Rights allocated to the
respective Classes of Certificates affected by any Event of Default hereunder
may waive such Event of Default; provided, however, that an Event of Default
under clause (i) or (ii) of Section 9.1(a) may be waived only by all of the
Certificateholders. Upon any such waiver of an Event of Default, such Event of
Default shall cease to exist and shall be deemed to have been remedied for every
purpose hereunder; provided, however, that the Trustee shall be entitled to
reimbursement pursuant to Section 7.12 for any costs and expenses incurred as a
result of such Event of Default. No such waiver shall extend to any subsequent
or other Event of Default or impair any right consequent thereon except to the
extent expressly so waived. Notwithstanding any other provisions of this
Agreement, for purposes of waiving any Event of Default pursuant to this Section
9.4, Certificates registered in the name of the Depositor or any Affiliate of
the Depositor shall be entitled to the same Voting Rights with respect to the
matters described above as they would if any other Person held such
Certificates.
ARTICLE X.
PURCHASE AND TERMINATION OF THE TRUST
SECTION 10.1. TERMINATION OF TRUST.
(a) Subject to Section 10.3, the Trust and the respective
obligations and responsibilities of the Depositor, the Trustee, the Master
Servicer and the Special Servicer hereunder (other than the obligation of the
Trustee to make payments to Certificateholders on the final Distribution Date
pursuant to Section 6.4 or otherwise as set forth in Section 10.2 and other than
the obligations in the nature of information or tax reporting or tax-related
administrative or judicial contests or proceedings) shall terminate on the
earlier of (i) the later of (A) the final payment or other liquidation of the
last Mortgage Loan held by the Trust and (B) the disposition of the last REO
Property held by the Trust and (ii) the sale of all Mortgage Loans and any REO
Properties held by the Trust in accordance with Section 10.1(b); provided that
in no event shall the Trust created hereby continue beyond the expiration of 21
years from the death of the last survivor of the descendants of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, the late Ambassador of the United States to the Court of St. ▇▇▇▇▇,
living on the date hereof.
(b) As soon as reasonably practical, the Trustee shall give the
Depositor, the Master Servicer, the Special Servicer, the Majority
Certificateholder of the Controlling Class and the Class R-I
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Certificateholders notice of the date when the aggregate Certificate Principal
Balance of the Principal Balances Certificates, after giving effect to
distributions of principal made on the next Distribution Date, will be less than
or equal to 1% of the Initial Pool Balance. The Depositor, the Master Servicer,
the Special Servicer, the majority holders of the Controlling Class and the
Holders of Class R-I Certificates representing a majority Percentage Interest in
such Class shall thereafter be entitled, in that order of priority, to purchase,
in whole only, the Mortgage Loans and any REO Properties then remaining in the
Trust Fund. If any such party desires to exercise such option, it will notify
the Trustee who will notify any other such party with a prior right to exercise
such option. If any such party that has been so provided notice by the Trustee
notifies the Trustee within ten Business Days after receiving notice of the
proposed purchase that it wishes to purchase the assets of the Trust, then such
party (or, in the event that more than one of such parties notifies the Trustee
that it wishes to purchase the assets of the Trust, the party with the first
right to purchase the assets of the Trust) may purchase the assets of the Trust
in accordance with this Agreement. The "TERMINATION PRICE" shall equal the
greater of (x) the sum of (i) the aggregate Purchase Price of all the remaining
Mortgage Loans (other than REO Mortgage Loans and Mortgage Loans as to which a
Final Recovery Determination has been made) held by the Trust, plus (ii) the
appraised value of each remaining REO Property, if any, held by the Trust (such
appraisal to be conducted by a Qualified Appraiser selected by the Master
Servicer and approved by the Trustee), minus (iii) solely in the case where the
Master Servicer is effecting such purchase, the aggregate amount of unreimbursed
Advances made by the Master Servicer, together with any Advance Interest accrued
and payable to the Master Servicer in respect of such Advances and any unpaid
Master Servicing Fees remaining outstanding (which items shall be deemed to have
been paid or reimbursed to the Master Servicer in connection with such purchase)
(or, solely in the case where the Special Servicer is effecting such purchase,
the aggregate amount of unreimbursed Servicing Advances made by the Special
Servicer, together with any Advance Interest accrued and payable to the Special
Servicer in respect of such Servicing Advances and any unpaid Special Servicing
Fees remaining outstanding (which items shall be deemed to have been paid or
reimbursed to the Special Servicer in connection with such purchase); (y) the
fair market value of all remaining assets of REMIC I and the grantor trust; and
(z) the amount that would be sufficient to pay the outstanding Certificate
Principal Balance of each Class of Certificates, Distributable Certificate
Interest thereon, and Distributable Certificate Interest on the Class X
Certificates for the final Distribution Date.
In the event that the Depositor, the Master Servicer, the Special
Servicer, the Majority Certificateholder of the Controlling Class or the Holders
of Class R-I Certificates representing a majority Percentage Interest in such
Class purchase all of the remaining Mortgage Loans and REO Properties held by
the Trust in accordance with the preceding paragraph, the party effecting such
purchase (the "FINAL PURCHASER") shall (i) deposit in the Collection Account not
later than the Determination Date relating to the Distribution Date on which the
final distribution on the Certificates is to occur, an amount in immediately
available funds equal to the Termination Price (other than the amount, if any,
of such Termination Price paid in respect of the assets of the grantor trust,
which amount shall be paid to the Trustee for deposit in the Excess Interest
Distribution Account) and (ii) deliver notice to the Trustee of its intention to
effect such purchase. Upon confirmation that such deposit has been made, the
Trustee shall release or cause to be released to the Final Purchaser or its
designee the Mortgage Files for the remaining Mortgage Loans and shall execute
all assignments, endorsements and other instruments furnished to it by the Final
Purchaser as shall be necessary to effectuate transfer of the remaining Mortgage
Loans and REO Properties held by the Trust, in each case without representation
or warranty by the Trustee. All Servicing Files for the remaining Mortgage Loans
and REO Properties shall be delivered to the Final Purchaser or its designee at
the expense of the Final Purchaser.
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(c) As a condition to the purchase of the assets of the Trust
pursuant to Section 10.1(b), the Final Purchaser must deliver to the Trustee an
Opinion of Counsel, which shall be at the expense of the Final Purchaser,
stating that such termination will be a "qualified liquidation" under Section
860F(a)(4) of the Code of each of REMIC I, REMIC II and REMIC III. Such purchase
shall be made in accordance with Section 10.3.
SECTION 10.2. PROCEDURE UPON TERMINATION OF TRUST.
(a) Notice of any termination pursuant to the provisions of
Section 10.1, specifying the Distribution Date upon which the final distribution
shall be made, shall be given promptly by the Trustee to each Rating Agency and
each Certificateholder by first class mail no later than the later of (a) ten
days prior to the date of such termination and (b) the date the Trustee receives
notice of such termination. Such notice shall specify (A) the Distribution Date
upon which final distribution on the Certificates will be made and (B) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
distribution being made only upon presentation and surrender of the Certificates
at the office or agency of the Trustee therein specified. The Trustee shall give
such notice to the Depositor and the Certificate Registrar at the time such
notice is given to Certificateholders. Upon any such termination, the Trustee
shall terminate, or request the Master Servicer to terminate, the Collection
Account and the Distribution Account and any other account or fund maintained
with respect to the Certificates, subject to the Trustee's obligation hereunder
to hold all amounts payable to the nontendering Certificateholders in trust
without interest pending such payment.
(b) On the final Distribution Date, the Trustee shall distribute
to each Certificateholder that presents and surrenders its Certificates all
amounts payable on such Certificates on such final Distribution Date in
accordance with Section 6.4.
(c) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to contact
the nontendering Certificateholders concerning surrender of their Certificates,
and the cost thereof shall be paid out of the amounts distributable to such
Holders. If within two years after the second notice any such Certificates shall
not have been surrendered for cancellation, the Trustee shall, subject to
applicable state law relating to escheat, hold all amounts distributable to such
Holders for the benefit of such Holders. No interest shall accrue on any amount
held by the Trustee and not distributed to a Certificateholder due to such
Certificateholder's failure to surrender its Certificate(s) for payment of the
final distribution thereon in accordance with this Section. Any money held by
the Trustee pending distribution under this Section 10.2 after 90 days after the
adoption of a plan of complete liquidation shall be deemed for tax purposes to
have been distributed from the REMICs and shall be beneficially owned by the
related Holder.
SECTION 10.3. ADDITIONAL TRUST TERMINATION REQUIREMENTS.
(a) In the event of a purchase of all the remaining Mortgage
Loans and REO Properties held by the Trust in accordance with Section 10.1 or
any other termination of the Trust under this Article X, the Trust and each
REMIC Pool shall be terminated in accordance with the following additional
requirements, unless in the case of a termination under Section 10.1 hereof, the
Final Purchaser delivers to the Trustee an Opinion of Counsel at the expense of
the Final Purchaser (or, in the case of any other termination, the Trustee shall
obtain such Opinion of Counsel at the expense of the
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Trust Fund) addressed to the Depositor and the Trustee to the effect that the
failure of the Trust to comply with the requirements of this Section 10.3 will
not (i) result in the imposition of taxes on "prohibited transactions" of any
REMIC Pool under the REMIC Provisions or (ii) cause any REMIC Pool to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(i) within 89 days prior to the final Distribution Date
set forth in the notice given by the Trustee under Section 10.2, the
Trustee shall adopt a plan of complete liquidation prepared by the Final
Purchaser and meeting the requirements for a qualified liquidation for
each REMIC Pool under Section 860F of the Code and any regulations
thereunder;
(ii) during such 90-day liquidation period and at or after
the adoption of the plans of complete liquidation and at or prior to the
final Distribution Date, the Trustee shall sell all of the remaining
Mortgage Loans and any REO Properties held by the Trust to the Final
Purchaser for cash in an amount equal to the Termination Price, such
cash shall be deposited into the Collection Account, shall be deemed
distributed on the REMIC I Regular Interests in retirement thereof,
shall be deemed distributed on the REMIC II Regular Interests in
retirement thereof, and shall be distributed to the Certificateholders
in retirement of the Certificates;
(iii) at the time of the making of the final payment on
the Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, to the Holders of the related Class of Residual
Certificates all cash on hand in each REMIC Pool after making such final
deemed payment or payments (other than cash retained to meet claims),
and REMIC I, REMIC II and REMIC III shall terminate at that time; and
(iv) in no event may the final payment on the REMIC I
Interests, the REMIC II Interests, the REMIC III Regular Certificates,
or the Class R-III Certificates be made after the 89th day from the date
on which such plans of complete liquidation are adopted. The Trustee
shall specify the first day of the 90-day liquidation period in a
statement attached to the final Tax Return for each REMIC Pool pursuant
to Treasury regulation 1.860F-1.
(b) By their acceptance of Certificates, the Holders thereof
hereby agree to authorize the Trustee to adopt a plan of complete liquidation of
REMIC I, REMIC II and REMIC III in accordance with the foregoing requirements,
which authorization shall be binding upon all successor Certificateholders.
ARTICLE XI.
RIGHTS OF CERTIFICATEHOLDERS
SECTION 11.1. LIMITATION ON RIGHTS OF HOLDERS.
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or
take any action or proceeding in any court for a partition or winding up of the
Trust, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
(b) Except as otherwise expressly provided herein, no
Certificateholder, solely by virtue of its status as a Certificateholder, shall
have any right to vote or in any manner otherwise control the Master Servicer,
the Special Servicer or the operation and management of the Trust, or the
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obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Certificates, be construed so as to constitute the
Certificateholders from time to time as partners or members of an association,
nor shall any Certificateholder be under any liability to any third person by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
(c) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement unless the
Holders of Certificates entitled to not less than 25% of the Voting Rights shall
have made written request upon the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the cost, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding and no
direction inconsistent with such written request has been given the Trustee
during such 60-day period by such Certificateholders; it being understood and
intended, and being expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatsoever by virtue or by
availing of any provision of this Agreement to affect, disturb or prejudice the
rights of the Holders of any other of such Certificates, or to obtain or seek to
obtain priority over or preference to any other such Holder, or to enforce any
right under this Agreement, except in the manner herein provided and for the
benefit of all Certificateholders. For the protection and enforcement of the
provisions of this Section, each and every Certificateholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
SECTION 11.2. ACCESS TO LIST OF HOLDERS.
(a) If the Trustee is not acting as Certificate Registrar, the
Certificate Registrar will furnish or cause to be furnished to the Trustee,
within fifteen days after receipt by the Certificate Registrar of a request by
the Trustee in writing, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Certificateholders of each Class as
of the most recent Record Date.
(b) If the Depositor, the Operating Adviser, the Special
Servicer, the Master Servicer or three or more Holders (hereinafter referred to
as "APPLICANTS," with a single Person that (together with its Affiliates) is the
Holder of more than one Class of Certificates being viewed as a single
"APPLICANT" for these purposes) apply in writing to the Trustee, and such
application states that the applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Certificates and
is accompanied by a copy of the communication which such applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, send, at such Person's expense, the written communication
proffered by the applicants to all Certificateholders at their addresses as they
appear in the Certificate Register. The Depositor, the Master Servicer and the
Special Servicer may each obtain, upon request, from the Trustee and the
Certificate Registrar a copy of the Certificate Register.
(c) Every Holder, by receiving and holding a Certificate, agrees
with the Depositor, the Certificate Registrar and the Trustee that neither the
Depositor, the Certificate Registrar nor the Trustee shall be held accountable
by reason of the disclosure of any such information as to the names and
addresses of the Certificateholders hereunder, regardless of the source from
which such information was derived.
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SECTION 11.3. ACTS OF HOLDERS OF CERTIFICATES.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Depositor.
Such instrument or instruments (as the action embodies therein and evidenced
thereby) are herein sometimes referred to as an "ACT" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agents shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Trustee and the Depositor, if made in
the manner provided in this Section. The Trustee agrees to promptly notify the
Depositor of any such instrument or instruments received by it, and to promptly
forward copies of the same.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments or deeds, certifying that the individual signing
such instrument or writing acknowledged to such notary public or other officer
the execution thereof. Whenever such execution is by an officer of a corporation
or a member of a partnership on behalf of such corporation or partnership, such
certificate or affidavit shall also constitute sufficient proof of such
officer's or member's authority. The fact and date of the execution of any such
instrument or writing, or the authority of the individual executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Certificates (notwithstanding any notation
of ownership or other writing thereon made by anyone other than the Trustee)
shall be proved by the Certificate Register, and neither the Trustee nor the
Depositor shall be affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Certificate shall bind
every future Holder of the same Certificate and the Holder of every Certificate
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Depositor in reliance thereon, whether or not notation of such
action is made upon such Certificate.
ARTICLE XII.
REMIC ADMINISTRATION
The provisions of this Article XII shall apply to each REMIC
Pool.
SECTION 12.1. REMIC ADMINISTRATION.
(a) An election will be made by the Trustee on behalf of the
Trust to treat the segregated pool of assets consisting of the Mortgage Loans
(other than the right to Excess Interest in respect of the Anticipated Repayment
Date Loans), such amounts as shall from time to time be held in the Collection
Account and the Distribution Account in respect thereof, the Insurance Policies
and any REO Properties and any other assets constituting REMIC I (as set forth
on the definition of REMIC I) as
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a REMIC under the Code. Such election will be made on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
REMIC I Interests are issued. For purposes of such election, each of the REMIC I
Regular Interests shall be designated as a separate class of "regular interests"
in REMIC I and the Class R-I Certificates shall be designated as the sole class
of "residual interests" in REMIC I.
An election will be made by the Trustee on behalf of REMIC II to
treat the segregated pool of assets consisting of the REMIC I Regular Interests
as a REMIC under the Code. Such election will be made on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
REMIC II Interests are issued. For the purposes of such election, the REMIC II
Regular Interests shall be designated as the "regular interests" in REMIC II and
the Class R-II Certificates shall be designated as the sole class of "residual
interests" in REMIC II.
An election will be made by the Trustee on behalf of REMIC III to
treat the segregated pool of assets consisting of the REMIC II Regular Interests
as a REMIC under the Code. Such election will be made on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
REMIC III Certificates are issued. For purposes of such election, the Class A-1,
Class A-2, Class B, Class C, Class D, Class E, Class F, Class G, Class H, Class
J, Class K, Class L, Class M, and Class N Certificates, the Class O Regular
Interest represented by the Class O Certificates, and each Component Interest of
the Class X Certificates shall be designated as the "regular interests" in REMIC
III and the Class R-III Certificates shall be designated as the sole class of
"residual interests" in REMIC III.
The Trustee shall not permit the creation of any "interests"
(within the meaning of Treasury regulation Section 1.860D-1(b)(1)) in any of the
REMIC Pools other than the REMIC I Regular Interests, the REMIC II Regular
Interests and the interests evidenced by the Certificates.
(b) The Closing Date is hereby designated as the "Startup Day"
of each REMIC Pool within the meaning of Section 860G(a)(9) of the Code. The
latest possible maturity date for the REMIC I Interests, the REMIC II Interests
and the REMIC III Certificates shall be the Rated Final Distribution Date.
The assets of the Trust Fund consisting of the right to any
Excess Interest in respect of the Anticipated Repayment Date Loans and the
Excess Interest Distribution Account shall be held by the Trustee for the
benefit of the Holders of the Class O Grantor Trust Interest represented by the
Class O Certificates, which Class O Certificates, in the aggregate, will
evidence 100% beneficial ownership of such assets (the "GRANTOR TRUST assets")
from and after the Closing Date. It is intended that the portion of the Trust
Fund consisting of the grantor trust assets will be treated as a grantor trust
for federal income tax purposes, and each of the parties to this Agreement
agrees that it will not take any action that is inconsistent with establishing
or maintaining such treatment. The Trustee shall hold the grantor trust assets
separate and apart from the assets of REMIC I, REMIC II, and REMIC III.
(c) The Trustee shall pay all routine tax related expenses
(not including any taxes, however denominated, including any additions to tax,
penalties and interest) of each REMIC Pool and the grantor trust, excluding any
professional fees or extraordinary expenses related to audits or any
administrative or judicial proceedings with respect to any REMIC Pool or the
grantor trust that involve the Internal Revenue Service or state tax
authorities.
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(d) The Trustee shall cause to be prepared, signed, and timely
filed with the Internal Revenue Service, on behalf of each REMIC Pool, an
application for a taxpayer identification number for each REMIC Pool and the
grantor trust on Internal Revenue Service Form SS-4. The Trustee, upon receipt
from the Internal Revenue Service of the Notice of Taxpayer Identification
Number Assigned, shall promptly forward a copy of such notice to the Depositor
and the Master Servicer. The Trustee shall prepare and file Form 8811 on behalf
of each REMIC Pool within 30 days after the Closing Date and shall designate an
appropriate Person to respond to inquiries by or on behalf of Certificateholders
for original issue discount and related information in accordance with
applicable provisions of the Code.
(e) The Trustee shall prepare, execute and file all of each REMIC
Pool's and the grantor trust's federal and state income or franchise tax and
information returns as such REMIC Pool's and the grantor trust's direct
representative; the expenses of preparing and filing such returns shall be borne
by the Trustee. The Depositor, the Master Servicer and the Special Servicer
shall each provide on a timely basis to the Trustee or its designee such
information with respect to the Trust or any REMIC Pool as is in the
Depositor's, the Master Servicer's or the Special Servicer's, as the case may
be, possession, that the Depositor, the Master Servicer or the Special Servicer,
as the case may be, has received or prepared by virtue of its acting in such
capacity hereunder and that is reasonably requested by the Trustee to enable it
to perform its obligations under this subsection, and the Trustee shall be
entitled to conclusively rely on such information in the performance of its
obligations hereunder. The Depositor shall indemnify the Trust and the Trustee
for any liability or assessment against any of them or any cost or expense
(including attorneys' fees) incurred by any of them resulting from any error in
any of such tax or information returns resulting from bad faith, negligence, or
willful malfeasance of the Depositor in providing any information for which the
Depositor is responsible for preparing. The Master Servicer and the Special
Servicer shall each indemnify the Trust, the Trustee and the Depositor for any
liability or assessment against the Trust, the Trustee or the Depositor, as the
case may be, and any expenses incurred in connection with such liability or
assessment (including attorney's fees) resulting from any error in any of such
tax or information returns resulting from errors in the information provided by
the Master Servicer or the Special Servicer, as the case may be, caused by the
negligence, willful misconduct or bad faith of the Master Servicer or the
Special Servicer, as the case may be. The Trustee shall be liable to the Trust,
the Master Servicer, the Special Servicer and the Depositor for any expense
incurred by the Trust, the Master Servicer, the Special Servicer or the
Depositor resulting from any error in any of such tax or information returns
resulting from errors in the preparation of such returns caused by the
negligence, willful misconduct or bad faith of the Trustee. Each indemnified
party shall immediately notify the indemnifying party or parties of the
existence of a claim for indemnification under this Section 12.1(e), and provide
the indemnifying party or parties, at the expense of such indemnifying party or
parties, an opportunity to contest the tax or assessment or expense giving rise
to such claim, provided that the failure to give such notification rights shall
not affect the indemnification rights in favor of the Trust under this Section
12.1(e). Any such indemnification shall survive the resignation or termination
of the Master Servicer, the Special Servicer or the Trustee and the termination
of this Agreement.
(f) The Trustee shall perform on behalf of each REMIC Pool and
the grantor trust all reporting and other tax compliance duties that are the
responsibility of such REMIC Pool and the grantor trust under the Code, REMIC
Provisions, or other compliance guidance issued by the Internal Revenue Service
or any state or local taxing authority. Among its other duties, the Trustee
shall provide (i) to the Internal Revenue Service or other Persons (including,
but not limited to, any Person that transferred a Residual Certificate to a
Disqualified Organization or to an agent that has acquired a Residual
Certificate on behalf of a Disqualified Organization) such information as is
necessary for the application of any tax relating to the transfer of a Residual
Certificate to any Disqualified Organization
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and (ii) to the Certificateholders such information or reports as are required
by the Code or REMIC Provisions.
(g) The Trustee shall forward to the Depositor copies of
quarterly and annual Tax Returns and Form 1099 information returns and such
other information within the control of the Trustee as the Depositor may
reasonably request in writing. Moreover, the Trustee shall forward to
Certificateholders such forms and furnish such information within its control as
are required by the Code to be furnished to them, shall prepare and file with
the appropriate state authorities as may to the actual knowledge of a
Responsible Officer of the Trustee be required by applicable law and shall
prepare and disseminate to Certificateholders Forms 1099 (or otherwise furnish
information within the control of the Trustee) to the extent required by
applicable law. The Trustee will make available to any Certificateholder any tax
related information required to be made available to such Certificateholder
pursuant to the Code and any Treasury Regulations thereunder.
(h) The Holder of Certificates representing the greatest
Percentage Interest in each Class of Residual Certificates shall be the Tax
Matters Person for the related REMIC Pool; provided that if Treasury Regulations
shall be modified to require another Person to be designated as Tax Matters
Person, then such Person shall become Tax Matters Person at such time. The
duties of the Tax Matters Person for each of the REMIC Pools are hereby
delegated to the Trustee, and each Residual Certificateholder, by acceptance of
its Residual Certificate, agrees, on behalf of itself and all successor holders
of such Residual Certificate, to such delegation to the Trustee as their agent
and attorney in fact. If the Code or applicable Treasury regulations prohibits
the Trustee from signing any applicable Internal Revenue Service, court or other
administrative documents or from otherwise acting as Tax Matters Person (as an
agent or otherwise), the Trustee shall do or cause to be done whatever is
necessary for the signing of such documents and the taking of any other such
act, and the Residual Certificateholders shall reasonably cooperate with the
Trustee in connection therewith. The Trustee shall not be required to expend or
risk its own funds or otherwise incur any other financial liability in the
performance of its duties hereunder or in the exercise of any of its rights or
powers (except to the extent of the ordinary expenses of performing its duties
under, or as otherwise expressly provided in, this Agreement), if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
(i) The Trustee, the Holders of the Residual Certificates, the
Master Servicer and the Special Servicer shall each exercise reasonable care, to
the extent within its control, and with respect to each of the Trustee, the
Master Servicer and the Special Servicer, within the scope of its express
duties, and shall each act in accordance with this Agreement and the REMIC
Provisions, in order to create and maintain the status of each REMIC Pool as a
REMIC and the grantor trust assets as a grantor trust or, as appropriate, adopt
a plan of complete liquidation in accordance with the REMIC Provisions and
Article X hereof.
(j) The Trustee, the Master Servicer, the Special Servicer and
the Holders of Residual Certificates shall not take any action or fail to take
any action or cause any REMIC Pool to take any action or fail to take any action
if any of such Persons knows or could, upon the exercise of reasonable
diligence, know, that, under the REMIC Provisions, such action or failure to
act, as the case may be, could (i) endanger the status of any REMIC Pool as a
REMIC or (ii) result in the imposition of a tax upon any REMIC Pool (including
but not limited to the tax on prohibited transactions as defined in Section
860F(a)(2) of the Code, the tax on contributions to a REMIC set forth in Section
860G(d) of the Code, or except as provided in Section 8.20(a) hereof, result in
the imposition of a tax on "net income from foreclosure property" as defined in
Section 860G(c) of the Code (any of the foregoing, an "ADVERSE
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REMIC EVENT")), unless the Trustee has received an Opinion of Counsel (at the
expense of the party seeking to take such action) to the effect that the
contemplated action will not endanger such status or result in the imposition of
such a tax. Any action required under this Section which would result in an
unusual or unexpected expense shall be undertaken at the expense of the party
seeking to have the Trustee, the Master Servicer, the Special Servicer or the
Holders of the Residual Certificates undertake such action.
(k) In the event that any tax is imposed on the grantor trust or
on REMIC I, REMIC II or REMIC III, including, without limitation, "prohibited
transactions" taxes as defined in Section 860F(a)(2) of the Code, any tax on
"net income from foreclosure property" as defined in Section 860G(c) of the
Code, any taxes on contributions to REMIC I, REMIC II or REMIC III after the
Startup Day pursuant to Section 860G(d) of the Code, and any other tax imposed
by the Code or any applicable provisions of state or local tax laws (other than
any tax permitted to be incurred by the Special Servicer pursuant to Section
8.20(a)), such tax, together with all incidental costs and expenses (including,
without limitation, penalties and reasonable attorneys' fees), shall be charged
to and paid by: (i) the Trustee, if such tax arises out of or results from a
breach of any of its obligations under this Article XII; (ii) the Special
Servicer, if such tax arises out of or results from a breach by the Special
Servicer of any of its obligations under Article VIII or this Article XII; (iii)
the Master Servicer, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations under Article VIII or this Article
XII; or (iv) the Trust in all other instances. Any tax permitted to be incurred
by the Special Servicer pursuant to Section 8.20(a) shall be charged to and paid
by the Master Servicer (at the direction of the Trust) from the net income
generated on the related REO Property. Any such amounts payable by the Trust in
respect of taxes shall be paid by the Master Servicer (at the direction of the
Trustee) out of amounts on deposit in the Collection Account or, if appropriate,
out of collections of Excess Interest.
(l) The Trustee shall, for federal income tax purposes, maintain
books and records with respect to each REMIC Pool on a calendar year and on an
accrual basis. The books and records shall be sufficient concerning the nature
and amount of each REMIC Pool's investments to show that such REMIC Pool has
complied with the REMIC Provisions.
(m) None of the Trustee, the Master Servicer or the Special
Servicer shall enter into any arrangement by which any REMIC Pool will receive a
fee or other compensation for services (other than under the circumstances
described in, and subject to the conditions of, Section 8.20(a)).
(n) In order to enable the Trustee to perform its duties as set
forth herein, the Depositor shall provide, or cause to be provided, to the
Trustee within ten (10) days after the Closing Date all information or data that
the Trustee reasonably determines to be relevant for tax purposes on the
valuations and offering prices of the Certificates, including, without
limitation, the yield, Prepayment Assumption, Issue Prices and projected cash
flows of the Senior Certificates, Subordinate Certificates and Residual
Certificates, as applicable, and the projected cash flows of the Mortgage Loans.
Thereafter, the Depositor shall provide to the Trustee or its designee, promptly
upon request therefor, any such additional information or data within the
Depositor's possession or knowledge that the Trustee may, from time to time,
reasonably request in order to enable the Trustee to perform its duties as set
forth herein. The Trustee is hereby directed to use any and all such information
or data provided by the Depositor in the preparation of all federal and state
income or franchise tax and information returns and reports for each REMIC Pool
and the grantor trust to Certificateholders as required herein. The Depositor
hereby indemnifies the Trustee and each REMIC Pool for any losses, liabilities,
damages, claims, expenses (including attorneys' fees) or assessments against the
Trustee and each REMIC Pool arising from any errors or miscalculations of the
Trustee pursuant to this Section that result from any failure of the
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Depositor to provide, or to cause to be provided, accurate information or data
to the Trustee (but not resulting from the methodology employed by the Trustee)
on a timely basis and such indemnification shall survive the termination of this
Agreement and the termination or resignation of the Trustee; provided, however,
that to the extent that any Certificates have been transferred to a Seller under
circumstances in which the fair market value of such Certificates is their issue
price, the Depositor may exclusively rely on the accuracy of a determination of
such fair market value by such Seller in supplying information to the Trustee
pursuant to this Section 12.1(n).
The Trustee agrees that all such information or data so obtained
by it is to be regarded as confidential information and agrees that it shall use
its best reasonable efforts to retain in confidence, and shall ensure that its
officers, employees and representatives retain in confidence, and shall not
disclose, without the prior written consent of the Depositor, any or all of such
information or data, or make any use whatsoever (other than for the purposes
contemplated by this Agreement) of any such information or data without the
prior written consent of the Depositor, unless such information is generally
available to the public (other than as a result of a breach of this Section 12.1
(n)) or is required by law or applicable regulations to be disclosed or is
disclosed (i) to independent auditors and accountants, counsel and other
professional advisers of the Trustee and its parent, or (ii) in connection with
enforcing its rights and obligations under this Agreement.
(o) At all times as may be required by the Code, the Trustee, the
Master Servicer and the Special Servicer each shall, to the extent within its
control and the scope of its duties more specifically set forth herein, maintain
the assets of each REMIC Pool as "qualified mortgages" as defined in Section
860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code, subject to the "de minimis" exception of Treasury
Regulation Section 1.860D-1(b)(3).
(p) the Holders of the Class R-I, Class R-II and Class R-III
Certificates shall pay when due their pro rata share of any and all federal,
state and local taxes imposed on REMIC I, REMIC II or REMIC III, as applicable,
or their respective assets or transactions, including, without limitation,
"prohibited transaction" taxes, as defined in Section 860F of the Code, any tax
on contributions imposed by Section 860G(d) of the Code, and any tax on "net
income from foreclosure property" as defined in Section 860G(c) of the Code. To
the extent that such taxes are not paid by the Class R-I, Class R-II or Class
R-III Certificateholders, respectively, the Trustee shall pay such remaining
REMIC taxes out of current or future amounts otherwise distributable to the
respective Holder or, if no such amounts are available, out of other amounts
held in the Distribution Account.
SECTION 12.2. PROHIBITED TRANSACTIONS AND ACTIVITIES. None of the
Trustee, the Master Servicer or the Special Servicer shall, to the extent within
its control, permit the sale, disposition or substitution of any of the Mortgage
Loans (except in a disposition pursuant to (i) the foreclosure, default or
imminent default of a Mortgage Loan, (ii) the bankruptcy or insolvency of any
REMIC Pool, (iii) the termination of the REMIC Pools in a "qualified
liquidation" as defined in Section 860F(a)(4) of the Code, or (iv) a repurchase
or substitution by any Seller, as contemplated by Article II hereof), nor
acquire any assets for the Trust, except as provided herein, nor sell or dispose
of any investments in the Collection Account or Distribution Account for gain,
nor accept any contributions to any REMIC Pool (other than a cash contribution
during the 3-month period beginning on the Startup Day), unless it has received
an Opinion of Counsel (at the expense of the Person requesting such action) to
the effect that such sale, disposition, acquisition, substitution, or acceptance
will not (a) affect adversely the status of any REMIC Pool as a REMIC or of the
REMIC I Regular Interests, the REMIC II Regular Interests, the REMIC III Regular
Certificates or the Component Interests of the Class X Certificates, as the case
may be, as the regular interests therein, (b) affect the distribution of
interest or principal on the Certificates,
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(c) result in the encumbrance of the assets transferred or assigned to any REMIC
Pool (except pursuant to the provisions of this Agreement) or (d) cause any
REMIC Pool to be subject to a tax on "prohibited transactions" or "prohibited
contributions" or other tax pursuant to the REMIC Provisions.
SECTION 12.3. LIABILITY WITH RESPECT TO CERTAIN TAXES AND LOSS OF
REMIC STATUS. In the event that any REMIC Pool fails to qualify as a REMIC,
loses its status as a REMIC, or incurs state or local taxes, or tax as a result
of a prohibited transaction or prohibited contribution subject to taxation under
the REMIC Provisions due to the negligent performance by the Trustee of its
duties and obligations set forth herein, the Trustee shall be liable to the
REMIC Pools and the Holders of the Residual Certificates for any and all losses,
claims, damages, liabilities or expenses ("LOSSES") resulting from such
negligence and relating to the Residual Certificates; provided, however, that
the Trustee shall not be liable pursuant to this Section 12.3 to the extent that
any such Losses are attributable to the action or inaction of the Master
Servicer, the Special Servicer, the Depositor or the Holders of such Residual
Certificates or to the extent that any such Losses result from any actions or
failures to act taken in reliance on an Opinion of Counsel or misinformation
provided by the Master Servicer, the Special Servicer, the Depositor or such
Holders of the Residual Certificates. The foregoing shall not be deemed to limit
or restrict the rights and remedies of the Trust or the Certificateholders under
any other provision of this Agreement or now or hereafter otherwise existing at
law or in equity. The Trustee shall be entitled to intervene in any litigation
in connection with the foregoing and to maintain control over its defense.
SECTION 12.4. MODIFICATIONS OF MORTGAGE LOANS. Notwithstanding
anything to the contrary in this Agreement, neither the Trustee, the Master
Servicer nor the Special Servicer shall permit any modification of any Money
Term of a Mortgage Loan or a Specially Serviced Mortgage Loan unless the Trustee
and the Master Servicer have received a Nondisqualification Opinion or a ruling
to the same effect as a Nondisqualification Opinion from the Internal Revenue
Service (at the expense of the party making the request that the Master Servicer
or the Special Servicer modify the Mortgage Loan or a Specially Serviced
Mortgage Loan).
ARTICLE XIII.
MISCELLANEOUS PROVISIONS
SECTION 13.1. BINDING NATURE OF AGREEMENT. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
SECTION 13.2. ENTIRE AGREEMENT. This Agreement contains the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof, and supersedes all prior and contemporaneous
agreements, understandings, inducements and conditions, express or implied, oral
or written, of any nature whatsoever with respect to the subject matter hereof.
The express terms hereof control and supersede any course of performance or
usage of the trade inconsistent with any of the terms hereof.
SECTION 13.3. AMENDMENT.
(a) This Agreement may be amended from time to time by the
parties hereto, without notice to or the consent of any of the Holders, (i) to
cure any ambiguity, (ii) to correct or supplement any provision herein which may
be inconsistent with any other provisions herein, (iii) to
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amend any provision hereof to the extent necessary or desirable to maintain the
status of each REMIC Pool as a REMIC for the purposes of federal income tax law
(or comparable provisions of state income tax law), (iv) to make any other
provisions with respect to matters or questions ensuing under or with respect to
this Agreement not inconsistent with the provisions hereof, or (v) to modify,
add to or eliminate the provisions of Article III relating to transfers of
Residual Certificates as provided under such Article; provided that (x) no such
amendment shall adversely affect the status of any REMIC Pool as a REMIC and (y)
no such amendment effected pursuant to clause (i), (ii) or (iv) of the preceding
sentence shall adversely affect in any material respect the interests of any
Holder not consenting thereto. Prior to entering into any amendment without the
consent of Holders pursuant to this paragraph, the Trustee may require (at the
expense of the party requesting such amendment, except that if the Trustee
requests such amendment, such amendment shall be at the expense of the
Depositor, if the Depositor consents) a Nondisqualification Opinion and an
Opinion of Counsel to the effect that such amendment is permitted under this
paragraph. The placement of an "original issue discount" legend on, or any
change required to correct any such legend previously placed on, a Certificate
shall not be deemed an amendment to this Agreement.
(b) This Agreement may also be amended from time to time by the
parties hereto with the consent of the Holders of Certificates entitled to not
less than 51% of the Voting Rights allocated to all Classes affected by such
amendment, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders or the rights and obligations of any party
hereto; provided that no such amendment may (i) reduce in any manner the amount
of, or delay the timing of the distributions required to be made on any
Certificate without the consent of the Holder of such Certificate, (ii)
adversely affect in any material respect the interests of the Holders of any
Class of Certificates in a manner other than as described in the immediately
preceding clause (i), without the consent of all the Holders of Certificates of
such Class, or (iii) modify the provisions of this Section 13.3, without the
consent of all the Holders of Certificates. Prior to entering into any amendment
pursuant to this paragraph, the Trustee may require (at the expense of the party
requesting the amendment) a Nondisqualification Opinion and an Opinion of
Counsel to the effect that such amendment is permitted under this paragraph.
(c) Promptly after the execution of any such amendment, the
Trustee shall furnish written notification of the substance of such amendment to
each Holder and the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under
this Section 13.3 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be in the affirmative and in writing and
shall be subject to such reasonable regulations as the Trustee may prescribe.
(e) Notwithstanding any other provision of this Agreement, for
purposes of the giving or withholding of consents pursuant to this Section 13.3,
Certificates registered in the name of the Depositor, the Master Servicer, the
Special Servicer or any of their respective Affiliates shall be entitled to the
same Voting Rights with respect to matters described above as they would if any
other Person held such Certificates.
SECTION 13.4. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS (WITHOUT REGARD TO CONFLICT OF
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LAWS PRINCIPLES APPLIED IN THE STATE OF NEW YORK, OTHER THAN THE PRINCIPLES SET
FORTH IN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK).
SECTION 13.5. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
received by (a) in the case of the Depositor, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Capital I Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇; (b) in the
case of the Trustee, at the Corporate Trust Office; (c) in the case of FINOVA,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇ ▇▇▇▇▇▇; (d) in the case of the Master Servicer, AMRESCO Services, L.P.,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, facsimile number (404)
654-2478, Attention: Legal Counsel; with a copy to AMRESCO Legal Department,
Attention: General Counsel, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, facsimile number (▇▇▇) ▇▇▇-▇▇▇▇; (e) in the case of the
Special Servicer, Banc One Mortgage Capital Markets, LLC, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇, facsimile number
(▇▇▇) ▇▇▇-▇▇▇▇, with a copy to Banc One Mortgage Capital Markets, LLC, ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, 12th Floor, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, facsimile
number (▇▇▇) ▇▇▇-▇▇▇▇; or as to each party hereto such other address as may
hereafter be furnished by such party to the other parties hereto in writing. Any
notice required or permitted to be given to a Holder shall be mailed by first
class mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have been duly given, whether or not
the Holder receives such notice.
SECTION 13.6. SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
SECTION 13.7. INDULGENCES; NO WAIVERS. Neither the failure nor
any delay on the part of a party to exercise any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy, power or
privilege, and no waiver of any right, remedy, power or privilege with respect
to any occurrence shall be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
SECTION 13.8. HEADINGS NOT TO AFFECT INTERPRETATION. The headings
contained in this Agreement are for convenience of reference only, and shall not
be used in the interpretation hereof.
SECTION 13.9. BENEFITS OF AGREEMENT. Nothing in this Agreement or
in the Certificates, express or implied, shall give to any Person, other than
the parties to this Agreement and their successors hereunder and the Holders of
the Certificates, any benefit or any legal or equitable right, power, remedy or
claim under this Agreement.
SECTION 13.10.SPECIAL NOTICES TO THE RATING AGENCIES.
(a) The Trustee (or, in the case of the items in clauses (vi) and
(vii), the successor trustee) shall give prompt notice to the Rating Agencies
and, except in the case of clause (viii), the Operating Adviser (or if no
Operating Adviser has been elected, the Majority Certificateholder of the
159
Controlling Class), of the occurrence of any of the following events of which it
has notice or actual knowledge:
(i) any amendment to this Agreement pursuant to Section
13.3 hereof;
(ii) any repurchase or replacement of any Mortgage Loan by
a Seller;
(iii) waiver of a due-on-sale or due-on-encumbrance clause
as provided in Section 8.6;
(iv) any resignation or removal of the Master Servicer or
the Special Servicer pursuant to this Agreement;
(v) the appointment of any successor to the Master
Servicer or the Special Servicer pursuant to this Agreement;
(vi) the resignation or removal of the Trustee pursuant to
Section 7.6;
(vii) the appointment of a successor trustee pursuant to
Section 7.7;
(viii) the election, resignation or removal of an
Operating Adviser pursuant to Section 8.32;
(ix) termination of the Trust pursuant to Article X
hereof;
(x) the final distribution to any Class of
Certificateholders; or
(xi) an Event of Default.
(b) All notices to the Rating Agencies shall be in writing
and sent by first class mail, telecopy or overnight courier, as follows:
If to S&P, to:
Standard & Poor's Ratings Services
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Commercial Mortgage Surveillance Manager
If to Fitch, to:
Fitch IBCA, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Commercial Mortgage Surveillance
If to any other Rating Agency, at such address as shall be
provided in writing to the Depositor by such Rating Agency.
160
(c) The Master Servicer and the Special Servicer shall each
deliver to the Trustee, and the Trustee shall deliver to
the Rating Agencies and the Depositor, copies of all
reports prepared by the Master Servicer or Special
Servicer, as the case may be, pursuant to this Agreement
and required to be delivered to each other, the Trustee or
the Certificateholders, together with any other
information as reasonably requested by the Rating Agencies
and the Depositor.
(d) Any notice or other document required to be delivered or
mailed by the Depositor, the Master Servicer, the Special
Servicer or the Trustee shall be given by such parties,
respectively, on a best efforts basis and only as a matter
of courtesy and accommodation to the Rating Agencies,
unless otherwise specifically required herein, and such
parties, respectively, shall have no liability for failure
to deliver any such notice or document to the Rating
Agencies.
(e) The Trustee, the Master Servicer and the Special Servicer,
as applicable, shall furnish to each Rating Agency with
respect to each Mortgage Loan such information as the
Rating Agency shall reasonably request and which the
Trustee, Master Servicer or Special Servicer can
reasonably provide in accordance with applicable law and
without waiving any attorney-client privilege relating to
such information. The Trustee, Master Servicer and Special
Servicer, as applicable, may include any reasonable
disclaimer they deem appropriate with respect to such
information.
(f) The parties hereto acknowledge that FINOVA is obligated to
pay the surveillance fee of the Rating Agencies.
SECTION 13.11.COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original, and all
of which together shall constitute one and the same instrument.
SECTION 13.12.INTENTION OF PARTIES.
(a) It is the express intent of the parties hereto that the
conveyance of the Mortgage Loans and related property to the Trustee, for the
benefit of the Certificateholders, by the Depositor as provided in Section 2.1
be, and be construed as, an absolute sale of the Mortgage Loans and related
property. It is, further, not the intention of the parties that such conveyance
be deemed a pledge of the Mortgage Loans and related property by the Depositor
to the Trustee to secure a debt or other obligation of the Depositor. However,
in the event that, notwithstanding the intent of the parties, such conveyance is
held not to be an absolute sale of the Mortgage Loans or any related property,
or the Mortgage Loans or any related property are for any other reason held to
be the property of the Depositor, then:
(i) This Agreement shall be deemed to be a security
agreement.
(ii) The conveyance provided for in Section 2.1 shall be
deemed to be a grant by the Depositor to the Trustee, for the benefit of
the Certificateholders, of a security interest in all of the Depositor's
right, title, and interest, whether now owned or hereafter acquired, in
and to:
(A) All accounts, contract rights, general
intangibles, chattel paper, instruments, documents, money,
deposit accounts, certificates of deposit, goods, letters
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of credit, advices of credit and uncertificated securities
consisting of, arising from or relating to any of the property
described in clauses (1)-(4) below: (1) the Mortgage Loans
(including, without limitation, the Mortgage Notes, the related
Mortgages, the related security agreements, and the related
title, hazard and other insurance policies) identified on the
Mortgage Loan Schedule, including all Replacement Mortgage
Loans, together with all payments and other collections with
respect thereto after the Cut-off Date (other than Monthly
Payments of principal and interest due on or before the Cut-off
Date) and the related Mortgage Files; (2) the Distribution
Account and the Collection Account, including, without
limitation, all funds and investments therein and all income
from the investment of funds therein (including any accrued
discount realized on liquidation of any investment purchased at
a discount); (3) the REMIC I Regular Interests, the REMIC II
Regular Interests and the Certificates; and (4) the Mortgage
Loan Purchase Agreements;
(B) All accounts, contract rights, general
intangibles, chattel paper, instruments, documents, money,
deposit accounts, certificates of deposit, goods, letters of
credit, advices of credit, uncertificated securities, and other
rights arising from or by virtue of the disposition of, or
collections with respect to, or insurance proceeds payable with
respect to, or claims against other Persons with respect to, all
or any part of the collateral described in clause (A) above
(including any accrued discount realized on liquidation of any
investment purchased at a discount); and
(C) All cash and non-cash proceeds of the
collateral described in clauses (A) and (B) above.
(iii) The possession by the Trustee of the Mortgage Notes,
the Mortgages and such other goods, letters of credit, advices of
credit, instruments, money, documents, chattel paper or certificated
securities shall be deemed to be "possession by the secured party," or
possession by a purchaser or a Person designated by him or her, for
purposes of perfecting the security interest pursuant to the Uniform
Commercial Code (including, without limitation, Sections 9-305, 8-313 or
8-321 thereof) as in force in each relevant jurisdiction.
(iv) Notifications to Persons holding such property, and
acknowledgments, receipts or confirmations from Persons holding such
property, shall be deemed to be notifications to, or acknowledgments,
receipts or confirmations from, financial intermediaries, bailees or
agents (as applicable) of the Trustee for the purpose of perfecting such
security interest under applicable law.
(b) The Depositor and, at the Depositor's direction, the Master
Servicer and the Trustee, at the Depositor's expense, shall, to the extent
consistent with this Agreement, take such reasonable actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the property described above, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of the Agreement. The Master Servicer
shall file, at the direction and at the expense of the Depositor, all filings
necessary to maintain the effectiveness of any original filings necessary under
the Uniform Commercial Code as in effect in any relevant jurisdiction to perfect
the Trustee's security interest in such property, including, without limitation,
continuation statements. In connection herewith, the Trustee shall have all of
the rights and remedies of a secured party and creditor under the Uniform
Commercial Code as in force in the relevant jurisdiction.
162
(c) The Depositor shall not take any action inconsistent with the
Trust's ownership of the Mortgage Loans.
SECTION 13.13.RECORDATION OF AGREEMENT. This Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere. Such recordation, if any, shall be
effected by the Master Servicer at the expense of the Trust payable out of the
Collection Account, but only upon direction of the Trustee accompanied by an
Opinion of Counsel (the cost of which shall be payable out of the Collection
Account) to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders of the Trust.
163
IN WITNESS WHEREOF, the parties hereto have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL I INC.,
as Depositor
By:
-----------------------------------------
Name:
Title:
AMRESCO SERVICES, L.P.,
as Master Servicer
By: AMRESCO MORTGAGE CAPITAL, INC.,
its general partner
By:
-----------------------------------------
Name:
Title:
BANC ONE MORTGAGE CAPITAL MARKETS, LLC,
as Special Servicer
By:
-----------------------------------------
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
By:
-----------------------------------------
Name:
Title:
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of April, 1999, before me, a notary public in
and for said State, personally appeared ________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person who executed the within instrument as __________________________ on
behalf of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ CAPITAL I INC., and acknowledged to me that such
corporation executed the within instrument pursuant to its by-laws or a
resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of April, 1999, before me, a notary public in
and for said State, personally appeared _______________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the within instrument as _______________________
of AMRESCO MORTGAGE CAPITAL, INC., the general partner of AMRESCO SERVICES,
L.P., the ____________ of __________, and acknowledged to me that such
corporation executed the within instrument pursuant to its bylaws or a
resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of April, 1999, before me, a notary public in
and for said State, personally appeared _____________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the within instrument as
_______________________________ on behalf of _________________________, and
acknowledged to me that such corporation executed the within instrument pursuant
to its by-laws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of April, 1999, before me, a notary public in
and for said State, personally appeared __________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the within instrument as
_________________________________ on behalf of NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, and acknowledged to me that such nationally chartered bank executed
the within instrument pursuant to its by-laws or a resolution of its Board of
Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this ____ day of April, 1999, before me, a notary public in
and for said State, personally appeared ______________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be one of the persons who executed the within instrument as
______________________________ on behalf of BANC ONE MORTGAGE CAPITAL MARKETS,
LLC, and acknowledged to me that such banking corporation executed the within
instrument pursuant to its by-laws or a resolution of its Board of Directors.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed my
official seal the day and year in this certificate first above written.
----------------------------------
Notary Public