COMMERCIAL MORTGAGE ACCEPTANCE CORP.,
DEPOSITOR
MIDLAND LOAN SERVICES, L.P.,
MASTER SERVICER AND GROUP 1 SPECIAL SERVICER
CRIIMI MAE SERVICES LIMITED PARTNERSHIP,
GROUP 2 SPECIAL SERVICER AND NOM SPECIAL SERVICER
LASALLE NATIONAL BANK,
TRUSTEE
and
ABN AMRO BANK N.V.,
FISCAL AGENT
--------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of December 1, 1997
--------------------------------------------
Commercial Mortgage Pass-Through Certificates
Series 1997-ML1
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS.......................................... 4
SECTION 1.1. Defined Terms.......................................................... 4
SECTION 1.2. Certain Calculations................................................... 62
SECTION 1.3. Certain Constructions.................................................. 63
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES............................... 63
SECTION 2.1. Conveyance and Assignment of Mortgage Loans............................ 63
SECTION 2.2. Acceptance by the Custodian and the Trustee............................ 70
SECTION 2.3. Representations and Warranties of the Depositor........................ 71
SECTION 2.4. Representations, Warranties and Covenants of the Master
Servicer and Each Special Servicer..................................... 76
SECTION 2.5. Execution and Delivery of Certificates; Issuance of REMIC I
and REMIC II Interests................................................. 81
SECTION 2.6. Miscellaneous REMIC Provisions......................................... 81
SECTION 2.7. Documents Not Delivered to Custodian................................... 82
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS..................................... 82
SECTION 3.1. Master Servicer to Act as Master Servicer of the Group 1
Mortgage Loan; Group 1 Special Servicer to Act as Special
Servicer of the Group 1 Mortgage Loan; Administration of
the Group 1 Mortgage Loan.............................................. 82
SECTION 3.2. Master Servicer to Act as Master Servicer of Group 2
Mortgage Loans; Group 2 and NOM Special Servicers to
Act as Special Servicers of the Group 2 Mortgage Loans;
Administration of the Group 2 Mortgage Loans........................... 88
SECTION 3.3. Liability of the Master Servicer and Special Servicers in
Respect of Group 2 Mortgage Loans...................................... 94
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PAGE
SECTION 3.4. Collection of Certain Mortgage Loan Payments in Respect of
Group 2 Mortgage Loans................................................. 95
SECTION 3.5. Collection of Taxes, Assessments and Similar Items in
Respect of Group 2 Mortgage Loans...................................... 95
SECTION 3.6. Collection Account..................................................... 98
SECTION 3.7. Permitted Withdrawals from the Collection Account...................... 99
SECTION 3.8. Remittance of Special Reporting and Inspection Fee.....................102
SECTION 3.9. Investment of Funds in the Collection Account and the
Reserve Accounts.......................................................103
SECTION 3.10. Maintenance of Insurance Policies and Errors and Omissions
and Fidelity Coverage in Respect of Group 2 Mortgage
Loans..................................................................105
SECTION 3.11. Enforcement of Due-On-Sale Clauses; Assumption
Agreements in Respect of Group 2 Mortgage Loans........................110
SECTION 3.12. Realization Upon Group 2 Mortgage Loans................................113
SECTION 3.13. Trustee to Cooperate; Release of Mortgage Files........................119
SECTION 3.14. Servicing Compensation.................................................120
SECTION 3.15. Reports to the Trustee; Collection Account Statements..................123
SECTION 3.16. Annual Statement as to Compliance......................................123
SECTION 3.17. Annual Independent Public Accountants' Servicing Report................124
SECTION 3.18. Access to Certain Documentation........................................124
SECTION 3.19. Title and Management of REO Properties related to the
Group 2 Mortgage Loans.................................................125
SECTION 3.20. Sale of Specially Serviced Mortgage Loans and REO
Properties related to the Group 2 Mortgage Loans.......................131
SECTION 3.21. Inspections and Collection of Financial Statements in Respect
of Group 2 Mortgage Loans..............................................133
SECTION 3.22. Available Information and Notices......................................134
SECTION 3.23. Reserve Accounts.......................................................136
SECTION 3.24. Property Advances......................................................137
SECTION 3.25. Appointment of Special Servicers.......................................138
SECTION 3.26. Designation of Special Servicers by the Applicable
Controlling Class......................................................139
SECTION 3.27. The Controlling Class Representatives. ................................140
SECTION 3.28. Transfer of Servicing Between Master Servicer and Special
Servicers; Record Keeping..............................................142
SECTION 3.29. Additional Servicing Provisions for ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan................144
SECTION 3.30. Updated Appraisals with respect to NOM Mortgage Loan...................145
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PAGE
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS..............................145
SECTION 4.1. Distributions from the REMIC I Distribution Account....................145
SECTION 4.2. Distributions from the REMIC II Distribution Account...................146
SECTION 4.3. Distributions from the REMIC III Distribution Account..................154
SECTION 4.4. Statements to Rating Agencies and Certificateholders;
Available Information..................................................157
SECTION 4.5. Compliance with Withholding Requirements...............................160
SECTION 4.6. REMIC Compliance.......................................................160
SECTION 4.7. Imposition of Tax on the Trust Fund....................................163
SECTION 4.8. Remittances; P&I Advances..............................................164
SECTION 4.9. Allocation of Realized Losses and
Additional Trust Fund Expenses.........................................165
ARTICLE V
THE CERTIFICATES........................................170
SECTION 5.1. The Certificates.......................................................170
SECTION 5.2. Registration, Transfer and Exchange of Certificates....................172
SECTION 5.3. Book-Entry Certificates................................................179
SECTION 5.4. Mutilated, Destroyed, Lost or Stolen Certificates......................181
SECTION 5.5. Appointment of Paying Agent............................................181
SECTION 5.6. Access to Certificateholders' Names and Addresses......................182
SECTION 5.7. Actions of Certificateholders..........................................182
ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND
THE SPECIAL SERVICER......................................183
SECTION 6.1. Liability of the Depositor, the Master Servicer and the
Special Servicer.......................................................183
SECTION 6.2. Merger or Consolidation of the Master Servicer and the
Special Servicers......................................................183
SECTION 6.3. Limitation on Liability of the Depositor, the Master Servicer
and Others.............................................................184
SECTION 6.4. Limitation on Resignation of the Master Servicer and of the
Special Servicers......................................................185
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PAGE
SECTION 6.5. Rights of the Depositor and the Trustee in Respect of the
Master Servicer and the Special Servicers..............................186
ARTICLE VII
DEFAULT............................................187
SECTION 7.1. Events of Default......................................................187
SECTION 7.2. Trustee to Act; Appointment of Successor...............................190
SECTION 7.3. Notification to Certificateholders.....................................192
SECTION 7.4. Other Remedies of Trustee..............................................192
SECTION 7.5. Waiver of Past Events of Default; Termination..........................193
ARTICLE VIII
CONCERNING THE TRUSTEE.....................................193
SECTION 8.1. Duties of Trustee......................................................193
SECTION 8.2. Certain Matters Affecting the Trustee..................................196
SECTION 8.3. Trustee Not Liable for Certificates or Mortgage Loans..................199
SECTION 8.4. Trustee and Fiscal Agent May Own Certificates..........................201
SECTION 8.5. Payment of Trustee's Fees and Expenses; Indemnification................201
SECTION 8.6. Eligibility Requirements for Trustee...................................203
SECTION 8.7. Resignation and Removal of the Trustee.................................204
SECTION 8.8. Successor Trustee......................................................205
SECTION 8.9. Merger or Consolidation of Trustee.....................................206
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee..........................207
SECTION 8.11. Authenticating Agent...................................................208
SECTION 8.12. Appointment of Custodians..............................................209
SECTION 8.13. Fiscal Agent Appointed; Concerning the Fiscal Agent....................210
ARTICLE IX
TERMINATION..........................................211
SECTION 9.1. Termination............................................................211
SECTION 9.2. Additional Termination Requirements....................................214
iv
PAGE
ARTICLE X
MISCELLANEOUS PROVISIONS....................................215
SECTION 10.1. Counterparts...........................................................215
SECTION 10.2. Limitation on Rights of Certificateholders.............................215
SECTION 10.3. Governing Law..........................................................216
SECTION 10.4. Notices................................................................216
SECTION 10.5. Severability of Provisions.............................................219
SECTION 10.6. Notice to the Depositor and Each Rating Agency.........................219
SECTION 10.7. Amendment..............................................................221
SECTION 10.8. Confirmation of Intent.................................................223
v
EXHIBITS
Exhibit A-1 Form of Class A-1 Certificate
Exhibit A-2 Form of Class A-2 Certificate
Exhibit A-3 Form of Class A-3 Certificate
Exhibit A-4 Form of Class A-4 Certificate
Exhibit A-5 Form of Class IO Certificate
Exhibit A-6 Form of Class B Certificate
Exhibit A-7 Form of Class C Certificate
Exhibit A-8 Form of Class D Certificate
Exhibit A-9 Form of Class E Certificate
Exhibit A-10 Form of Class F-1 Certificate
Exhibit A-11 Form of Class F-2 Certificate
Exhibit A-12 Form of Class G Certificate
Exhibit A-13 Form of Class R-I Certificate
Exhibit A-14 Form of Class R-II Certificate
Exhibit A-15 Form of Class R-III Certificate
Exhibit A-16 Form of Class A-1 Component
Exhibit A-17 Form of Class A-2 Component
Exhibit A-18 Form of Class A-3 Component
Exhibit A-19 Form of Class B Component
Exhibit A-20 Form of Class C Component
Exhibit A-21 Form of Class D Component
Exhibit A-22 Form of Class E Component
Exhibit A-23 Form of Class F/G Component
Exhibit B Mortgage Loan Schedule
Exhibit C-1 Form of Transferee Affidavit
Exhibit C-2 Form of Transferor Letter
Exhibit D-1 Form of Investment Representation Letter
Exhibit D-2 Form of ERISA Representation Letter
Exhibit E Form of Request for Release
Exhibit F Form of Custodial Agreement
Exhibit G Mortgage Loan Purchase and Sale Agreement
Exhibit H Form of Securities Legend
Exhibit I-1 Notice and Acknowledgement
Exhibit I-2 Acknowledgement of Proposed Special Servicer
Exhibit J Prepayment Assumption
Exhibit K ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Intercreditor Agreement
vi
Pooling and Servicing Agreement, dated as of December 1, 1997
among Commercial Mortgage Acceptance Corp., as Depositor, Midland Loan
Services, L.P., as Master Servicer and Group 1 Special Servicer, CRIIMI MAE
Services Limited Partnership, as Group 2 Special Servicer and NOM Special
Servicer, LaSalle National Bank, as Trustee and Custodian, and ABN AMRO Bank
N.V., as Fiscal Agent of the Trustee.
PRELIMINARY STATEMENT:
(Terms used but not defined in this Preliminary Statement shall have the
meanings specified in Article I)
The Depositor intends to sell pass-through certificates to be
issued hereunder in multiple classes which in the aggregate will evidence the
entire beneficial ownership interest in the Trust Fund consisting primarily of
the Mortgage Loans. As provided herein, the Trustee will elect that the Trust
Fund be treated for federal income tax purposes as three separate real estate
mortgage investment conduits (each a "REMIC" or, in the alternative, "REMIC I",
"REMIC II" and "REMIC III," respectively).
The REMIC I Interests constitute "regular interests" in REMIC
I and the Class R-I Certificates are the sole class of "residual interests" in
REMIC I. Each REMIC I Interest relates to a specific Mortgage Loan or Separate
Loan Advance or to the Transferable Servicing Interest. Each corresponding
REMIC I Interest (other than the Transferable Servicing Interest) has a
Pass-Through Rate equal to the REMIC I Net Mortgage Rate of the related
Mortgage Loan or Separate Loan Advance, an initial principal amount equal to
the Scheduled Principal Amount as of the Cut-off Date of the related Mortgage
Loan or Separate Loan Advance, and a latest possible maturity date on the
Maturity Date of the related Mortgage Loan or Separate Loan Advance. The Class
R-I Certificates will have no Certificate Balance and no Pass-Through Rate, but
will be entitled to receive the proceeds of any assets remaining in REMIC I
after all classes of REMIC I Interests have been paid in full.
The Class A-1-II, Class A-2-II, Class A-3-II, Class A-4-II,
Class BII, Class C-II, Class D-II, Class E-II, Class F-1-II, Class F-2-II and
Class G-II Interests constitute "regular interests" in REMIC II and the Class
R-II Certificates are the sole class of "residual interests" in REMIC II. The
following table sets forth the Class designation, Pass-Through Rate, initial
aggregate Certificate Balance and Rated Final Distribution Date for each Class
of Interests comprising the interests in REMIC II.
Pass-Through Initial Aggregate Rated
Designation Rate(1) Certificate Balance Final Distribution Date
----------- ------------ ------------------- -----------------------
Class A-1-II (2) $142,191,000.00 December 15, 2030
Class A-2-II (2) $117,378,000.00 December 15, 2030
Class A-3-II (2) $220,490,334.00 December 15, 2030
Class A-4-II (3) $ 96,908,666.00 December 15, 2030
Class B-II (2) $ 59,394,000.00 December 15, 2030
Class C-II (2) $ 46,666,000.00 December 15, 2030
Class D-II (2) $ 46,667,000.00 December 15, 2030
Class E-II (2) $ 16,969,000.00 December 15, 2030
Class F-1-II (2) $ 10,000,000.00 December 15, 2030
Class F-2-II (2) $ 40,909,000.00 December 15, 2030
Class G-II (2) $ 50,909,929.14 December 15, 2030
Class R-II (4) December 15, 2030
(4)
(1) Interest calculated on the basis of a year consisting of twelve
thirty-day months.
(2) The Pass-Through Rate is equal to the Group 2 Weighted Average Rate.
(3) The Pass-Through Rate is equal to the Net Mortgage Rate borne by the
Group 1 Mortgage Loan.
(4) The Class R-II Certificates do not have a Certificate Balance or a
Pass-Through Rate. The Class R-II Certificates shall be entitled to
receive any remaining assets of REMIC II after the Certificate Balance
of all other Classes of REMIC II Interests have been reduced to zero.
The Class A-1, Class A-2, Class A-3, Class A-4, Class IO,
Class B, Class C, Class D, Class E, Class F-1, Class F-2 and Class G
Certificates constitute "regular interests" in REMIC III and the Class R-III
Certificates are the sole class of "residual interests" in REMIC III. The
following table sets forth the Class designation, Pass-Through Rate, initial
aggregate Certificate Balance or Notional Amount and Rated Final Distribution
Date for each Class of Certificates comprising the interests in REMIC III.
2
Initial Aggregate
Certificate Certificate Balance or Rated
Designation Pass-Through Rate(1) Notional Amount(3) Final Distribution Date
----------- ------------------- ------------------ -----------------------
Class A-1 Class A-1 Pass-Through Rate $142,191,000.00 December 15, 2030
Class A-2 Class A-2 Pass-Through Rate $117,378,000.00 December 15, 2030
Class A-3 Class A-3 Pass-Through Rate $220,490,334.00 December 15, 2030
Class A-4 Class A-4 Pass-Through Rate $ 96,908,666.00 December 15, 2030
Class IO Class IO Pass-Through Rate $751,574,263.14 December 15, 2030
Class B Class B Pass-Through Rate $ 59,394,000.00 December 15, 2030
Class C Class C Pass-Through Rate $ 46,666,000.00 December 15, 2030
Class D Class D Pass-Through Rate $ 46,667,000.00 December 15, 2030
Class E Class E Pass-Through Rate $ 16,969,000.00 December 15, 2030
Class F-1 Class F-1 Pass-Through Rate $ 10,000,000.00 December 15, 2030
Class F-2 Class F-2 Pass-Through Rate $ 40,909,000.00 December 15, 2030
Class G Class G Pass-Through Rate $ 50,909,929.14 December 15, 2030
Class R-III (2) (2) December 15, 2030
(1) Interest calculated on the basis of a year consisting of twelve
thirty-day months.
(2) The Class R-III Certificates do not have a Certificate Balance or a
Pass-Through Rate. The Class R-III Certificates shall be entitled to
receive any remaining assets of REMIC III after the Certificate
Balance of all other Classes of Certificates have been reduced to
zero.
(3) In the case of the Class IO Certificates, such amount represents the
Notional Amount thereof.
The Certificate Balance of any Class of Certificates
outstanding at any time represents the maximum amount which holders thereof are
entitled to receive as distributions allocable to principal from the cash flow
on the Mortgage Loans and the other assets in the Trust Fund.
As of the Cut-off Date, the Mortgage Loans have an aggregate
Scheduled Principal Amount equal to $848,482,929.14 (the "Initial Principal
Amount").
In consideration of the mutual agreements herein contained,
the Depositor, the Master Servicer, the Group 1 Special Servicer, the Group 2
Special Servicer, the NOM Special Servicer, the Trustee and the Fiscal Agent
agree as follows:
3
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms.
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the meanings
specified in this Article.
"Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note": The mortgage note
representing an additional advance, if any, in the principal amount of up to
$35,000,000 which may be made to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Associates Limited Partnership,
a District of Columbia limited partnership, and Liberty Plaza Limited
Partnership, a Delaware limited partnership, by the Mortgage Loan Seller after
the Closing Date, which mortgage note is secured pari passu with the ▇▇▇▇▇▇▇▇
▇▇▇▇▇ Loan by the Mortgage securing the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan, but which is not
included in the Trust Fund.
"Additional Interest": Interest that accrues on a Mortgage
Loan after the Anticipated Repayment Date for such Mortgage Loan to the extent
that such interest is attributable to an increase in the Mortgage Rate of a
Mortgage Loan after its Anticipated Repayment Date, plus any interest accrued
on such Additional Interest at the Mortgage Rate thereon.
"Additional Interest Rate": The increase in the Mortgage Rate
of a Mortgage Loan following its Anticipated Repayment Date.
"Additional Trust Fund Expenses": Any of the following items:
(i) Special Servicing Fees and Principal Recovery Fees payable to a Special
Servicer in connection with a Mortgage Loan becoming a Specially Serviced
Mortgage Loan or an REO Property and not paid by the related Borrower or
reimbursed from collections on such Mortgage Loan; (ii) Advance Interest
Amounts (in excess of Default Interest) paid to the Master Servicer, the
Trustee, the Fiscal Agent or a Special Servicer that cannot be reimbursed from
collections on the related Mortgage Loan or REO Property; (iii) indemnification
of the Trustee, the Fiscal Agent and certain related Persons pursuant to
Sections 8.5 or reimbursement of the Trustee and the Fiscal Agent for costs and
expenses pursuant to Section 8.5; (iv) indemnification of the Master Servicer
and certain related Persons pursuant to this Agreement or reimbursement for
certain costs and expenses to the extent provided for herein (other than costs
and expenses reimbursable as Property Advances); (v) indemnification of the
Special
4
Servicers and certain related Persons pursuant to this Agreement or
reimbursement for certain costs and expenses to the extent provided for herein
(other than costs and expenses reimbursable as Property Advances); (vi)
tax-related expenses paid out of the Collection Account pursuant to Section
3.7; (vii) to the extent not covered by another party hereto, any federal,
state and local taxes imposed on either the Trust or its assets or transactions
paid out of the Collection Account pursuant to Section 3.7 (excluding taxes on
REO Properties, which are payable out of Net REO Proceeds or Liquidation
Proceeds); and (viii) to the extent not included in the calculation of a
Realized Loss and not covered by indemnification from one of the parties
hereto, any other cost, expense, liability or loss borne by the Trust for which
there is no corresponding payment from a Mortgagor or corresponding proceeds
from the liquidation or disposition of any Mortgage Loan or REO Property,
including any expenses incurred in connection with a modification of a Mortgage
Loan in accordance with this Agreement, to the extent not recovered from the
related Borrower.
"Advance": Any P&I Advance or Property Advance.
"Advance Interest Amount": The sum, for any Mortgage Loan as
to which any Advance remains unreimbursed, of interest at the related
Reimbursement Rate on the amount of any P&I Advances and Property Advances made
by the Master Servicer, the Trustee, the Fiscal Agent or a Special Servicer, as
applicable, for the number of days from the date on which such Advance was made
or, if interest has been previously paid on such Advance, from the date on
which interest was last paid, through the date of payment or reimbursement of
the related Advance (which in no event shall be later than the Determination
Date following the date on which funds are available pursuant to the terms
hereof to reimburse such Advance with interest thereon at the Reimbursement
Rate).
"Adverse REMIC Event": Either (i) the endangerment of the
status of REMIC I, REMIC II or REMIC III as a "real estate mortgage investment
conduit" under the Code or (ii) the imposition of a tax upon REMIC I, REMIC II
OR REMIC III or any of their respective assets or transactions (including,
without limitation, the tax on "prohibited transactions" as defined in Section
860F(a)(2) of the Code and the tax on "prohibited contributions" set forth in
Section 860G(d) of the Code).
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract
5
or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. The Trustee may obtain
and rely on an Officer's Certificate of the Master Servicer, any Special
Servicer or the Depositor to determine whether any Person is an Affiliate of
such party.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Anticipated Repayment Date": For any Mortgage Loan, the
Anticipated Repayment Date, if any, therefor set forth on the Mortgage Loan
Schedule.
"Anticipated Termination Date": Any Distribution Date on
which it is anticipated that the Trust Fund will be terminated pursuant to
Section 9.1(c).
"Applicant": As defined in Section 5.6(a).
"Appraisal Reduction Amount": The excess, if any, of (a) the
sum, as of the Determination Date immediately succeeding the date on which an
Updated Appraisal is obtained (without duplication), (i) the Principal Amount
of the applicable Required Appraisal Mortgage Loan, (ii) to the extent not
previously advanced by or on behalf of the Master Servicer, the Trustee or the
Fiscal Agent, all unpaid interest on the Required Appraisal Mortgage Loan
through the most recent Due Date prior to such Determination Date at a rate per
annum equal to the related Net Mortgage Rate, (iii) all accrued but unpaid
Servicing Fees, Trustee Fees and Additional Trust Fund Expenses in respect of
the Required Appraisal Loan, (iv) all related unreimbursed Advances made by or
behalf of the Master Servicer, the applicable Special Servicer, the Trustee or
the Fiscal Agent with respect to such Required Appraisal Mortgage Loan and (v)
all currently due and unpaid real estate taxes (net of any amounts escrowed
therefor) and assessments, insurance premiums and, if applicable, ground rents
in respect of the related Mortgaged Property over (b) 90% of the Appraised
Value as determined by an Updated Appraisal.
"Appraised Value": With respect to any Mortgaged Property,
the appraised value thereof determined by an Updated Appraisal. "Assignment of
Leases, Rents and Profits": With respect to any Mortgaged Property, any
assignment of leases, rents and profits or similar agreement executed by the
Borrower, assigning to the mortgagee all of the income, rents and profits
derived from the ownership, operation, leasing or disposition of all or a
portion
6
of such Mortgaged Property, in the form which was duly executed, acknowledged
and delivered by the Borrower, as amended, modified, renewed or extended
through the date hereof and from time to time hereafter.
"Assignment of Mortgage": An assignment of mortgage without
recourse, notice of transfer or equivalent instrument, in recordable form,
which is sufficient under the laws of the jurisdiction in which the related
Mortgaged Property is located to reflect of record the sale of the related
Mortgage, which assignment, notice of transfer or equivalent instrument may be
in the form of one or more blanket assignments covering Mortgages encumbering
Mortgaged Properties located in the same jurisdiction, if permitted by law and
acceptable for recording; provided, however, that none of the Trustee, the
Fiscal Agent, the Custodian, the Special Servicer or the Master Servicer shall
be responsible for determining whether any assignment is legally sufficient or
in recordable form.
"Assumed Monthly Payment": An amount deemed due in respect of
(i) any Mortgage Loan that is delinquent in respect of its Balloon Payment
beyond the first Determination Date after its stated maturity date (unless such
Mortgage Loan has been modified and is paying in accordance with such
modification) and (ii) any REO Mortgage Loan, which shall be equal to the
Monthly Payment that would have been due on the Mortgage Loan in accordance
with the terms of the related Note if (a) the maturity date for such Mortgage
Loan had not occurred, (b) the related Mortgaged Property had not become an REO
Property, such Mortgage Loan was still outstanding and no acceleration of the
Mortgage Loan had occurred and (c) in the case of any Mortgage Loan that
provided for amortization of principal prior to its maturity date, principal
continued to amortize on the same amortization schedule.
"Assumption Fees": Any fees collected by the Master Servicer
or a Special Servicer in connection with an assumption of a Mortgage Loan or
substitution of a Borrower thereunder permitted to be executed under the
provisions of Section 3.2, Section 3.11 or Section 3.12.
"Authenticating Agent": Any authenticating agent appointed by
the Trustee pursuant to Section 8.11.
"Available Distribution Amount": with respect to any
Distribution Date, an amount equal to, without duplication, (a) the sum of (i)
the aggregate of the amounts on deposit in the Collection Account and the
Distribution Accounts as of the close of business on the related Determination
Date and the amounts collected by or on behalf of the Master Servicer as of the
close of business on such Determination
7
Date and required to be deposited in the Collection Account, (ii) to the extent
not already included as part of clause (i), the aggregate amount of any P&I
Advances made by the Master Servicer, the Trustee or the Fiscal Agent for
distribution on the Certificates on such Distribution Date pursuant to Section
4.8, (iii) to the extent not already included as part of clause (i), the
aggregate amount transferred from the REO Account (if established) to the
Collection Account during the month of such Distribution Date, on or prior to
the Remittance Date in such month, pursuant to Section 3.6(a)(v), net of (b)
the portion of the amounts described in subclauses (a)(i) and (a) (iii) of this
definition that represents one or more of the following: (i) collected Monthly
Payments that are due on a Due Date following the end of the related Collection
Period, (ii) any amounts payable or reimbursable to any Person from the
Collection Account pursuant to clauses (ii)-(vii) of Section 3.7, (iii)
Principal Prepayments ( and corresponding interest payments), Liquidation
Proceeds (other than from sale of all of the Mortgage Loans pursuant to Section
9.1) and proceeds from the repurchase of the Mortgage Loans pursuant to Section
2.3(d) or (e) received after the related Determination Date, (iv) Prepayment
Premiums and (v) any amounts deposited in the Collection Account or the
Distribution Accounts in error.
"Balloon Payment": With respect to each Mortgage Loan, the
scheduled payment of principal and interest due on the Maturity Date of such
Mortgage Loan which, pursuant to the related Note, is equal to the entire
remaining principal balance of such Mortgage Loan, plus accrued interest
thereon.
"Bankruptcy Loss": A loss arising from a proceeding under the
United States Bankruptcy Code or any other similar state law or other
proceeding with respect to the Borrower of, or Mortgaged Property under, a
Mortgage Loan, including, without limitation, any Deficient Valuation Amount or
losses, if any, resulting from any Debt Service Reduction Amount for the month
in which the related Remittance Date occurs.
"Borrower": With respect to each Mortgage Loan, any obligor
on any related Note.
"Book-Entry Certificate": Any Certificate registered in the
name of the Securities Depository or its nominee.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking institutions in the States of New York, Illinois, Missouri
or Maryland are authorized or obligated by law, executive order or governmental
decree to be closed.
8
"Certificate": Any Class A-1, Class A-2, Class A-3, Class
A-4, Class IO, Class B, Class C, Class D, Class E, Class F-1, Class F-2, Class
G, Class R-I, Class R-II or Class R-III Certificate issued, authenticated and
delivered hereunder.
"Certificate Balance": With respect to any Class of
Certificates or Interests (other than the Class IO, Class R-I, Class R-II and
Class R-III Certificates) (a) on or prior to the first Distribution Date, an
amount equal to the aggregate initial Certificate Balance of such Class or
Interest, as specified in the Preliminary Statement hereto, and (b) as of any
date of determination after the first Distribution Date, the Certificate
Balance of such Class of Certificates or Interests on the Distribution Date
immediately prior to such date of determination, after application or
allocation of the distributions of principal, Realized Losses and Additional
Trust Fund Expenses made thereon on such prior Distribution Date.
"Certificate Owner": With respect to a Book-Entry
Certificate, the Person who is the beneficial owner of such Certificate as
reflected on the books of the Securities Depository or on the books of a
Securities Depository Participant or on the books of an indirect participant
for which a Securities Depository Participant acts as agent.
"Certificate Register" and "Certificate Registrar": The
register maintained and the registrar appointed pursuant to Section 5.2(a).
"Certificateholder": A Person whose name is registered in the
Certificate Register. All references herein to "Holders" or
"Certificateholders" shall reflect the rights of Certificate Owners as they may
indirectly exercise such rights through the Securities Depository and the
Securities Depository Participants, except as otherwise specified herein.
"Class": With respect to Certificates or Interests, all of
the Certificates or Interests bearing the same alphabetical and numerical class
designation.
"Class A-1 Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-1 hereto.
"Class A-1 Pass-Through Rate": A per annum rate equal to
6.50%.
"Class A-1-II Interest": A regular interest in REMIC II
entitled to the monthly distributions payable thereto pursuant to Section 4.2.
9
"Class A-1-II Pass-Through Rate": The Group 2 Weighted
Average Rate.
"Class A-2 Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-2 hereto.
"Class A-2 Pass-Through Rate": A per annum rate equal to
6.53%.
"Class A-2-II Interest": A regular interest in REMIC II
entitled to the monthly distributions payable thereto pursuant to Section 4.2.
"Class A-2-II Pass-Through Rate": The Group 2 Weighted
Average Rate. "Class A-3 Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-3 hereto.
"Class A-3 Pass-Through Rate": A per annum rate equal to
6.57%.
"Class A-3-II Interest": A regular interest in REMIC II
entitled to the monthly distributions payable thereto pursuant to Section 4.2.
"Class A3-II Pass-Though Rate": The Group 2 Weighted Average
Rate.
"Class A-4 Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-4 hereto.
"Class A-4 Pass-Through Rate": A per annum rate equal to
6.735%.
"Class A-4-II Interest": A regular interest in REMIC II
entitled to the monthly distributions payable thereto pursuant to Section 4.2.
"Class A-4-II Pass-Through Rate": The Net Mortgage Rate borne
by the Group 1 Mortgage Loan.
10
"Class B Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-6 hereto.
"Class B Pass-Through Rate": For any Distribution Date, a per
annum rate equal to the Group 2 Weighted Average Rate for the related Interest
Accrual Period minus 0.92%.
"Class B-II Fraction": For any Distribution Date, a fraction,
the numerator of which is the Group 2 Weighted Average Rate for the related
Interest Accrual Period minus 0.92% and the denominator of which is the Group 2
Weighted Average Rate for the related Interest Accrual Period.
"Class B-II Interest": A regular interest in REMIC II
entitled to the monthly distributions payable thereto pursuant to Section 4.2.
"Class B-II Pass-Through Rate": The Group 2 Weighted Average
Rate.
"Class C Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-7 hereto.
"Class C Pass-Through Rate": For any Distribution Date, a per
annum rate equal to the Group 2 Weighted Average Rate for the related Interest
Accrual Period minus 0.79%.
"Class C-II Fraction": For any Distribution Date, a fraction,
the numerator of which is the Group 2 Weighted Average Rate for the related
Interest Accrual Period minus 0.79% and the denominator of which is the Group 2
Weighted Average Rate for the related Interest Accrual Period.
"Class C-II Interest": A regular interest in REMIC II
entitled to the monthly distributions payable thereto pursuant to Section 4.2.
"Class C-II Pass-Through Rate": The Group 2 Weighted Average
Rate.
11
"Class D Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-8 hereto.
"Class D Pass-Through Rate": For any Distribution Date, a per
annum rate equal to the Group 2 Weighted Average Rate for the related Interest
Accrual Period minus 0.51%.
"Class D-II Fraction": For any Distribution Date, a fraction,
the numerator of which is the Group 2 Weighted Average Rate for the related
Interest Accrual Period minus 0.51% and the denominator of which is the Group 2
Weighted Average Rate for the related Interest Accrual Period.
"Class D-II Interest": A regular interest in REMIC II
entitled to the monthly distributions payable thereto pursuant to Section 4.2.
"Class D-II Pass-Through Rate": The Group 2 Weighted Average
Rate.
"Class E Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-9 hereto.
"Class E Pass-Through Rate": For any Distribution Date, a per
annum rate equal to the Group 2 Weighted Average Rate for the related Interest
Accrual Period minus 0.34%.
"Class E-II Fraction": For any Distribution Date, a fraction,
the numerator of which is the Group 2 Weighted Average Rate for the related
Interest
Accrual Period minus 0.34% and the denominator of which is the Group 2 Weighted
Average Rate for the related Interest Accrual Period.
"Class E-II Interest": A regular interest in REMIC II
entitled to the monthly distributions payable thereto pursuant to Section 4.2.
"Class E-II Pass-Through Rate": The Group 2 Weighted Average
Rate.
12
"Class F-1 Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-10 hereto.
"Class F-1 Pass-Through Rate": A per annum rate equal to
6.50%.
"Class F-1-II Fraction": For any Distribution Date, a
fraction the numerator of which is 6.50% and the denominator of which is the
Group 2 Weighted Average Rate for the related Interest Accrual Period.
"Class F-1-II Interest": A regular interest in the REMIC II
entitled to the monthly distributions payable thereto pursuant to Section 4.2.
"Class F-1-II Pass-Through Rate": The Group 2 Weighted
Average Rate. "Class F-2 Certificate": Any one of the Certificates executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-11 hereto.
"Class F-2 Pass-Through Rate": A per annum rate equal to
6.50%.
"Class F-2-II Fraction": For any Distribution Date, a
fraction the numerator of which is 6.50% and the denominator of which is the
Group 2 Weighted Average Rate for the related Interest Accrual Period.
"Class F-2 Interest": A regular interest in REMIC II entitled
to the monthly distributions payable thereto pursuant to Section 4.2.
"Class F-2-II Pass-Through Rate": The Group 2 Weighted
Average Rate.
"Class G Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-12 hereto.
"Class G-II Fraction": For any Distribution Date, a fraction
the numerator of which is 6.50% and the denominator of which is the Group 2
Weighted Average Rate for the related Interest Accrual Period.
"Class G Pass-Through Rate": A per annum rate equal to 6.50%.
13
"Class G-II Interest": A regular interest in REMIC II
entitled to the monthly distributions payable thereto pursuant to Section 4.2.
"Class G-II Pass-Through Rate": The Group 2 Weighted Average
Rate.
"Class IO Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-5 hereto.
"Class IO Notional Amount": As of any date of determination,
an amount equal to the aggregate Certificate Balance of the Regular
Certificates (other than the Class IO and Class A-4 Certificates).
"Class Prepayment Percentage": With respect to any Prepayment
Premium paid with respect to the NOM Loan, any Distribution Date and any of the
Class A-1, Class A-2, Class A-3, Class B, Class C, Class D, Class E, Class F-1,
Class F-2 and Class G Certificates (or related Interest), the percentage
obtained by dividing the portion, if any, of the Group 2 Principal Distribution
Amount distributed to the respective Class of Certificates on such Distribution
Date by the total Group 2 Principal Distribution Amount distributed to all such
Classes of Certificates on such Distribution Date. With respect to any
Prepayment Premium paid with respect to any Group 2 Mortgage Loan other than
the NOM Loan, any Distribution Date and any of the Class A-1, Class A-2, Class
A-3, Class B, Class C, Class D, Class E, Class F-2 and Class G Certificates (or
related Interest), the percentage obtained by dividing the portion, if any, of
the Group 2 Principal Distribution Amount distributed to the respective Class
of Certificates on such Distribution Date by the total Group 2 Principal
Distribution Amount distributed to all such Classes of Certificates (or related
Interests) on such Distribution Date.
"Class R-I Certificate": Any Certificate executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-13 hereto. The Class
R-I Certificates have no Pass-Through Rate or Certificate Balance.
"Class R-II Certificate": Any Certificate executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-14 hereto. The Class
R-II Certificates have no Pass-Through Rate or Certificate Balance.
14
"Class R-III Certificate": Any Certificate executed and
authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-15 hereto. The Class
R- III Certificates have no Pass-Through Rate or Certificate Balance.
"Closing Date": December 30, 1997.
"Code": The Internal Revenue Code of 1986, as amended from
time to time, any successor statute thereto, and any temporary or final
regulations of the United States Department of the Treasury promulgated
pursuant thereto.
"Collection Account": The segregated account or accounts
created and maintained by the Master Servicer pursuant to Section 3.6(a), which
shall be entitled "LaSalle National Bank, as Trustee, in trust for Holders of
Commercial Mortgage Acceptance Corp., Commercial Mortgage Pass-Through
Certificates, Series 1997-ML1 Collection Account" and which shall be an
Eligible Account.
"Collection Period": With respect to any Distribution Date
and any Mortgage Loan, the period beginning on the first day following the
Determination Date in the month preceding the month in which such Distribution
Date occurs (or, in the case of the Distribution Date occurring in January
1998, on the day after the Cut-off Date) and ending on and including the
Determination Date in the month in which such Distribution Date occurs.
"Commission": The Securities and Exchange Commission of the
United States of America.
"Component A-1-II": For any Distribution Date, a portion of
the Class IO Certificates having a Notional Amount equal to the Certificate
Balance of the Class A-1-II Interest as of the close of business on the
preceding Distribution Date (or, in the case of the first Distribution Date, on
the Cut-off Date) and a Pass-Through Rate equal to the Group 2 Weighted Average
Rate for the related Interest Accrual Period minus 6.50%.
"Component A-1-II Fraction": For any Distribution Date, a
fraction, the numerator of which is the Group 2 Weighted Average Rate for the
related Interest Accrual Period minus 6.50% and the denominator of which is the
Group 2 Weighted Average Rate for the related Interest Accrual Period.
15
"Component A-2-II": For any Distribution Date, a portion of
the Class IO Certificates having a Notional Amount equal to the Certificate
Balance of the Class A-2-II Interest as of the close of business on the
preceding Distribution Date (or, in the case of the first Distribution Date, on
the Cut-off Date) and a Pass-Through Rate equal to the Group 2 Weighted Average
Rate for the related Interest Accrual Period minus 6.53%.
"Component A-2-II Fraction": For any Distribution Date, a
fraction, the numerator of which is the Group 2 Weighted Average Rate for the
related Interest Accrual Period minus 6.53% and the denominator of which is the
Group 2 Weighted Average Rate for the related Interest Accrual Period.
"Component A-3-II": For any Distribution Date, a portion of
the Class IO Certificates having a Notional Amount equal to the Certificate
Balance of the Class A-3-II Interest as of the close of business on the
preceding Distribution Date (or, in the case of the first Distribution Date, on
the Cut-off Date) and a Pass-Through Rate equal to the Group 2 Weighted Average
Rate for the related Interest Accrual Period minus 6.57%.
"Component A-3-II Fraction": For any Distribution Date, a
fraction, the numerator of which is the Group 2 Weighted Average Rate for the
related Interest Accrual Period minus 6.57% and the denominator of which is the
Group 2 Weighted Average Rate for the related Interest Accrual Period.
"Component B-II": For any Distribution Date, a portion of the
Class IO Certificates having a Notional Amount equal to the Certificate Balance
of the Class B-II Interest as of the close of business on the preceding
Distribution Date (or, in the case of the first Distribution Date, on the
Cut-off Date) and a Pass-Through Rate equal to 0.92% per annum.
"Component B-II Fraction": For any Distribution Date, a
fraction the numerator of which is 0.92% and the denominator of which is the
Group 2 Weighted Average Rate for the related Interest Accrual Period.
"Component C-II": For any Distribution Date, a portion of the
Class IO Certificates having a Notional Amount equal to the Certificate Balance
of the Class C-II Interest as of the close of business on the preceding
Distribution Date (or, in the case of the first Distribution Date, on the
Cut-off Date) and a Pass-Through Rate equal to 0.79% per annum.
16
"Component C-II Fraction": For any Distribution Date, a
fraction the numerator of which is 0.79% and the denominator of which is the
Group 2 Weighted Average Rate for the related Interest Accrual Period.
"Component D-II": For any Distribution Date, a portion of the
Class IO Certificates having a Notional Amount equal to the Certificate Balance
of the Class D-II Interest as of the close of business on the preceding
Distribution Date (or, in the case of the first Distribution Date, on the
Cut-off Date) and a Pass-Through Rate equal to 0.51% per annum.
"Component D-II Fraction": For any Distribution Date, a
fraction the numerator of which is 0.51% and the denominator of which is the
Group 2 Weighted Average Rate for the related Interest Accrual Period.
"Component E-II": For any Distribution Date, a portion of the
Class IO Certificates having a Notional Amount equal to the Certificate Balance
of the Class E-II Interest as of the close of business on the preceding
Distribution Date (or, in the case of the first Distribution Date, on the
Cut-off Date) and a Pass-Through Rate equal to 0.34% per annum.
"Component E-II Fraction": For any Distribution Date, a
fraction the numerator of which is 0.34% and the denominator of which is the
Group 2 Weighted Average Rate for the related Interest Accrual Period.
"Component F/G-II": For any Distribution Date, a portion of
the Class IO Certificates consisting of the Component F-1-II, Component F-2-II
and Component G-II.
"Component F-1-II": For any Distribution Date, a portion of
the Class IO Certificates having a Notional Amount equal to the aggregate
Certificate Balance of the Class F-1-II Interest as of the close of business on
the preceding Distribution Date (or, in the case of the first Distribution
Date, on the Cut-off Date) and a Pass-Through Rate equal to the Group 2
Weighted Average Rate for the related Interest Accrual Period minus 6.50% per
annum.
"Component F-1-II Fraction": For any Distribution Date, a
fraction, the numerator of which is the Group 2 Weighted Average Rate for the
related Interest Accrual Period minus 6.50% and the denominator of which is the
Group 2 Weighted Average Rate for the related Interest Accrual Period.
17
"Component F-2-II": For any Distribution Date, a portion of
the Class IO Certificates having a Notional Amount equal to the aggregate
Certificate Balance of the Class F-2-II Interest as of the close of business on
the preceding Distribution Date (or, in the case of the first Distribution
Date, or the Cut-off Date) and a Pass-Through Rate equal to the Group 2
Weighted Average Rate for the related Interest Accrual Period minus 6.50% per
annum.
"Component F-2-II Fraction": For any Distribution Date, a
fraction, the numerator of which is the Group 2 Weighted Average Rate for the
related Interest Accrual Period minus 6.50% and the denominator of which is the
Group 2 Weighted Average Rate for the related Interest Accrual Period.
"Component G-II": For any Distribution Date, a portion of the
Class IO Certificates having a Notional Amount equal to the aggregate
Certificate Balance of the Class G-II Interest as of the close of business on
the preceding Distribution Date (or, in the case of the first Distribution
Date, on the Cut-off Date) and a Pass-Through Rate equal to the Group 2
Weighted Average Rate for the related Interest Accrual Period minus 6.50% per
annum.
"Component G-II Fraction": For any Distribution Date, a
fraction, the numerator of which is the Group 2 Weighted Average Rate for the
related Interest Accrual Period minus 6.50% and the denominator of which is the
Group 2 Weighted Average Rate for the related Interest Accrual Period.
"Condemnation Proceeds": Any amount (other than Insurance
Proceeds) received in connection with the taking of a Mortgaged Property by
exercise of the power of eminent domain or condemnation.
"Controlling Class": As of any date of determination, the
Class of Certificates outstanding (other than the Class A-4, Class IO, Class
F-1, Class R-I, Class R-II or Class R-III Certificates), (a) which bear the
latest alphabetical Class designation and (b) the Certificate Balance of which
is greater than 20% of the initial Certificate Balance thereof; provided,
however, that if no such Class of Certificates has a Certificate Balance
greater than 20% of its initial Certificate Balance, the Controlling Class
shall be the Class of Certificates (other than the Class A-4, Class IO, Class
F-1, Class R-I, Class R-II or Class R-III Certificates) bearing the latest
alphabetical Class designation. In determining the Controlling Class, the Class
A-1, Class A-2 and Class A-3 Certificates shall be deemed a single Class of
Certificates.
"Controlling Class Representative": As defined in Section
3.6.
18
"▇▇▇▇▇▇ Borrower": ▇▇▇▇▇▇ Place Associates, LLC, a Delaware
limited liability company, and its successors.
"▇▇▇▇▇▇ Class A Noteholder": As defined in the ▇▇▇▇▇▇
Servicing Agreement.
"▇▇▇▇▇▇ Class B Note": The Class B Promissory Note of the
▇▇▇▇▇▇ Borrower issued in the original principal amount of $97,500,000 and
secured by the Mortgage on ▇▇▇▇▇▇ Place, Boston Massachusetts and which is
subordinated to the Group 1 Mortgage Loan.
"▇▇▇▇▇▇ Event of Default": An Event of Default as defined in
the ▇▇▇▇▇▇ Servicing Agreement.
"▇▇▇▇▇▇ Servicer": Metropolitan Life Insurance Company or its
successors or assigns.
"▇▇▇▇▇▇ Servicing Agreement": The Servicing Agreement, dated
as of July 31, 1997, among Metropolitan Life Insurance Company, as holder of
the ▇▇▇▇▇▇ Class B Note and as servicer, and the Mortgage Loan Seller, relating
to the Group 1 Mortgage Loan.
"Corporate Trust Office": The principal office of the Trustee
located at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Asset-Backed Securities Trust Services Dept.-CMAC 1997-ML1, or the
principal trust office of any successor trustee qualified and appointed
pursuant to Section 8.8.
"Corrected Mortgage Loan": The Group 1 Mortgage Loan if it
has been a Specially Serviced Mortgage Loan but is no longer a Specially
Serviced Mortgage Loan pursuant to the provisos to the second sentence of the
definition of the term "Specially Serviced Mortgage Loan", and any Group 2
Mortgage Loan which is no longer a Specially Serviced Mortgage Loan pursuant to
the provisos to the first sentence of the definition of the term "Specially
Serviced Mortgage Loan".
"Costs": As defined in Section 8.5(d).
"Custodial Agreement": The Custodial Agreement, if any, in
effect from time to time between the Custodian named therein, the Master
Servicer and the Trustee, substantially in the form of Exhibit F hereto, as the
same may be amended or modified from time to time in accordance with the terms
thereof.
19
"Custodian": Any Custodian appointed pursuant to Section 8.12
and, unless the Trustee is Custodian, named pursuant to any Custodial
Agreement. The Custodian may (but need not) be the Trustee or the Master
Servicer or any Affiliate of the Trustee or the Master Servicer, but may not be
the Depositor, the Mortgage Loan Seller or any Affiliate of the Depositor or
the Mortgage Loan Seller.
"Cut-off Date": December 1, 1997.
"Debt Service Reduction Amount": With respect to a Due Date
and the related Determination Date, the amount of the reduction of the Monthly
Payment that a Borrower is obligated to pay on such Due Date with respect to a
Mortgage Loan as a result of any proceeding under bankruptcy law or any similar
proceeding (other than on account of a Deficient Valuation); provided, however,
that in the case of an amount that is deferred, but not forgiven, such
reduction shall include only the net present value (calculated at the related
Mortgage Rate) of the reduction.
"Default Interest": With respect to any Mortgage Loan,
interest accrued on such Mortgage Loan at the excess of the Default Rate over
the Mortgage Rate.
"Default Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan following any event
of default on such Mortgage Loan, including a default in the payment of a
Monthly Payment or a Balloon Payment, as such rate is set forth in the Mortgage
Loan Schedule.
"Deferred Interest": With respect to any Mortgage Loan,
interest accrued at the Mortgage Rate on such Mortgage Loan during an interest
accrual period for such Mortgage Loan that exceeds the amount required by the
terms of the Mortgage Loan to be paid on the related Due Date, and that is
added to the Principal Amount of such Mortgage Loan.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation by a court of competent jurisdiction of the related Mortgaged
Property in an amount less than the then outstanding indebtedness under such
Mortgage Loan, which valuation results from a proceeding initiated under the
United States Bankruptcy Code, as amended from time to time, and that reduces
the amount the related Borrower is required to pay pursuant to such Mortgage
Loan.
"Deficient Valuation Amount": The amount by which the total
amount due with respect to a Mortgage Loan, including the Principal Amount of a
Mortgage
20
Loan plus any accrued and unpaid interest thereon and any other
amounts recoverable from the related Borrower with respect thereto pursuant to
the terms thereof, is reduced in connection with a Deficient Valuation.
"Definitive Certificate": As defined in Section 5.3(a).
"Depositor": Commercial Mortgage Acceptance Corp., a Missouri
corporation and its successors and assigns.
"Determination Date": The fifth Business Day immediately
preceding each Distribution Date, commencing in January 1998.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof that are not
customarily provided to tenants in connection with the rental of space for
occupancy only within the meaning of Treasury Regulations Section
1.512(h)-1(c)(5), the management or operation of such REO Property, the holding
of such REO Property primarily for sale to customers, the performance of any
construction work thereon or any use of such REO Property in a trade or
business conducted by the Trust Fund other than through an Independent
Contractor; provided, however, that a Special Servicer, on behalf of the Trust
Fund, shall not be considered to Directly Operate an REO Property solely
because such Special Servicer, on behalf of the Trust Fund, establishes rental
terms, chooses tenants, enters into or renews leases, deals with taxes and
insurance, or makes decisions as to repairs or capital expenditures with
respect to such REO Property.
"Disqualified Non-U.S. Person": With respect to a Class R-I,
Class R-II or Class R-III Certificate, any Non-U.S. Person or agent thereof
other than (i) a Non-U.S. Person that holds such Class R-I, Class R-II or Class
R-III Certificate, as the case may be, in connection with the conduct of a
trade or business within the United States and has furnished the transferor and
the Certificate Registrar with an effective IRS Form 4224 or (ii) a Non-U.S.
Person that has delivered to both the transferor and the Certificate Registrar
an Opinion of Counsel to the effect that the transfer of such Class R-I, Class
R-II or Class RIII Certificate to it is in accordance with the requirements of
the Code and the regulations promulgated thereunder and that such transfer of
such Class R-I, Class R-II or Class R-III Certificate will not be disregarded
for federal income tax purposes.
"Disqualified Organization": Either (a) the United States, a
State or any political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than an
instrumentality that is a
21
corporation if all of its activities are subject to tax and a majority of its
board of directors is not selected by any such governmental unit), (b) a
foreign government, International Organization or agency or instrumentality of
either of the foregoing, (c) an organization that is exempt from tax imposed by
Chapter 1 of the Code (including the tax imposed by Code Section 511 on
unrelated business taxable income) on any excess inclusions (as defined in Code
Section 860E(c)(1)) with respect to the Class R-I, Class R-II or Class R-III
Certificates (except certain farmers' cooperatives described in Code Section
521), (d) rural electric and telephone cooperatives described in Code Section
1381(a)(2), or (e) any other Person so designated by the Certificate Registrar
based upon an Opinion of Counsel to the effect that any Transfer to such Person
may cause REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any
time that the Certificates are outstanding. The terms "United States," "State"
and "International Organization" shall have the meanings set forth in Code
Section 7701 or successor provisions.
"Distributable Certificate Interest": For any Distribution
Date and each Class of REMIC I Interests, REMIC II Interests and Certificates
(other than the Class IO Certificates and the Residual Certificates), one
month's interest at the applicable Pass-Through Rate accrued on the Certificate
Balance of such Class of REMIC I Interests, REMIC II Interests or Certificates,
as the case may be, immediately prior to such Distribution Date. For any
Distribution Date and for the Class IO Certificates, one month's interest
accrued on Component A-1-II, Component A-2-II, Component A-3-II, Component
B-II, Component C-II, Component D-II, Component E-II and Component F/G-II.
"Distribution Accounts": The REMIC I Distribution Account,
the REMIC II Distribution Account and the REMIC III Distribution Account, which
Distribution Accounts may be held by the Trustee as a single Eligible Account
created and maintained as a separate trust account.
"Distribution Date": The fifteenth calendar day of any month,
or if such fifteenth calendar day is not a Business Day, the Business Day
immediately following such fifteenth calendar day, commencing in January 1998.
"Due Date": With respect to any Collection Period and any
Mortgage Loan, the date on which scheduled payments are due on such Mortgage
Loan (without regard to grace periods), such date being for all Mortgage Loans
the first day of each month.
22
"Early Termination Notice Date": Any date as of which the
aggregate Stated Principal Balance of the Mortgage Loans remaining in the Trust
Fund is less than 1% of the aggregate Principal Amount of the Mortgage Loans as
of the Cut-off Date.
"Eligible Account": Either (i) a segregated account or
accounts maintained with a federally or state-chartered depository institution
or trust company of which (a) the short term senior unsecured debt obligations
are rated at least "A-1+" by S&P and the long term senior unsecured debt
obligations are rated at least "AA" by S&P and (b) the short term senior
unsecured debt obligations are rated at least "P1" by ▇▇▇▇▇'▇ and the long term
senior unsecured debt obligations are rated at least "A2" by ▇▇▇▇▇'▇ or (ii) a
segregated trust account or accounts maintained with a federally or
state-chartered depository institution or trust company acting in its fiduciary
capacity, having, in either case, a combined capital and surplus of at least
$50,000,000 and (a) subject to supervision or examination by federal or state
authority and subject to regulations regarding fiduciary funds on deposit
substantially similar to 12 C.F.R. 9.10(b), or (b) otherwise confirmed in
writing by each of the Rating Agencies that the maintenance of such account,
which may be an account maintained with the Trustee or the Master Servicer,
shall not, in and of itself, result in a downgrading, withdrawal or
qualification of the rating then assigned by such Rating Agency to any Class of
Certificates. Eligible Accounts may bear interest.
"Eligible Investor": (i) A Qualified Institutional Buyer that
is purchasing Privately Placed Certificates for its own account or for the
account of a Qualified Institutional Buyer to whom notice is given that the
offer, sale or transfer is being made in reliance on Rule 144A promulgated
under the 1933 Act or (ii) with respect to Privately Placed Certificates, an
Institutional Accredited Investor.
"Environmental Report": With respect to each Mortgaged
Property, the environmental audit report or reports delivered to the Mortgage
Loan Seller in connection with the purchase of the related Mortgage Loan from
the Originator of such Mortgage Loan.
"ERISA": The Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
"Escrow Account": As defined in Section 3.5(b).
"Escrow Payment": Any payment made by any Borrower to the
Master Servicer for the account of such Borrower for application toward the
payment
23
of taxes, insurance premiums, assessments and similar items in respect
of the related Mortgaged Property.
"Event of Default": As defined in Section 7.1.
"Expenses": As defined in Section 8.5(c).
"Farb Loan": The Mortgage Loan bearing Loan Number 13 on the
Mortgage Loan Schedule.
"FDIC": The Federal Deposit Insurance Corporation, or any
successor thereto.
"FHA": The Federal Housing Administration.
"FHLMC": The Federal Home Loan Mortgage Corporation, or
any successor thereto.
"Final Recovery Determination": With respect to any REO
Mortgage Loan, Specially Serviced Mortgage Loan or Mortgage Loan subject to
repurchase by the Mortgage Loan Seller pursuant to Section 2.3(d) or 2.3(e),
the recovery of all Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds, the related Repurchase Price and other payments or recoveries
(including proceeds of the final sale of any related REO Property) which the
Master Servicer, in its reasonable judgment as evidenced by a certificate of a
Servicing Officer delivered to the Trustee and the Custodian, expects to be
finally recoverable. The Master Servicer shall maintain records, prepared by a
Servicing Officer, of each Final Recovery Determination until the earlier of
(i) its termination as Master Servicer hereunder and the transfer of such
records to a successor servicer and (ii) five years following the termination
of the Trust Fund.
"Fiscal Agent": ABN AMRO Bank N.V., in its capacity as fiscal
agent of the Trustee, or its successor in interest, or any successor fiscal
agent appointed as herein provided.
"FNMA": The Federal National Mortgage Association, or any
successor thereto.
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"▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Intercreditor Agreement": The intercreditor
agreement dated the Closing Date, among the Mortgage Loan Seller, the Trustee
and the Master Servicer, substantially in the form attached hereto as
Exhibit K.
"▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan": The Mortgage Loan bearing Loan
Numbers 4 and 5, but shall not include the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note.
"▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Pro Rata Allocation": For any collection,
expense, Realized Loss, Additional Trust Fund Expense, or other amount with
respect to the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan and the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note, the
product of such amount and a fraction the numerator of which is the Principal
Amount of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Note and the denominator of which is the sum
of (i) the Principal Amount of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Note and (ii) the
outstanding principal amount of the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note.
"▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Note": The Note evidencing the portion
of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan held by the Trust Fund.
"Group 1 Available Distribution Amount": With respect to
REMIC I, the portion of the Available Distribution Amount arising from the
Group 1 Mortgage Loan; with respect to REMIC II, all amounts distributed with
respect to the REMIC I Interest corresponding to the Group 1 Mortgage Loan;
and, with respect to REMIC III, all amounts distributed with respect to the
Class A-4-II Interest.
"Group 1 Mortgage Loan": The Mortgage Loan shown as Loan
Number 1 on the Mortgage Loan Schedule, which Mortgage Loan is secured by
▇▇▇▇▇▇ Place, Boston, Massachusetts and made to the ▇▇▇▇▇▇ Borrower and in the
outstanding principal amount of $96,908,666 at the Cut-off Date. The term
"Group 1 Mortgage Loan" shall include the related REO Mortgage Loan if the
Group 1 Mortgage Loan becomes an REO Mortgage Loan, but shall not include the
▇▇▇▇▇▇ Class B Note.
"Group 1 Principal Distribution Amount": For each
Distribution Date, the aggregate of the following (without duplication):
(a) the principal portion of the Monthly Payment (other than
the Balloon Payment) due, or the principal portion of any Assumed
Monthly Payment deemed due, on or in respect of the Group 1 Mortgage
Loan for its Due Date during the related Collection Period;
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(b) the aggregate of all Principal Prepayments received on the
Group 1 Mortgage Loan during the related Collection Period;
(c) if the stated maturity date of the Group 1 Mortgage Loan
occurred during or prior to the related Collection Period, any payment
of principal made by or on behalf of the related Borrower during the
related Collection Period (including the Balloon Payment), in each
case, net of any portion of such payment that represents a recovery of
the principal portion of any Monthly Payment (other than the Balloon
Payment) due, or the principal portion of any Assumed Monthly Payment
deemed due, in respect of the Group 1 Mortgage Loan on a Due Date
during or prior to the related Collection Period to the extent
previously advanced and not previously recovered;
(d) the aggregate of all Liquidation Proceeds, Insurance
Proceeds, REO Proceeds and Condemnation Proceeds, and proceeds of any
Group 1 Mortgage Loan repurchase that were received on or in respect
of the Group 1 Mortgage Loan during the related Collection Period and
that were identified and applied by the Master Servicer as recoveries
of principal, in each case net of any portion of such amounts that
represents a recovery of the principal portion of any Monthly Payment
(other than a Balloon Payment) due, or the principal portion of any
Assumed Monthly Payment deemed due, in respect of the Group 1 Mortgage
Loan on a Due Date during or prior to the related Collection Period to
the extent previously advanced and not previously recovered; and
(e) for each Distribution Date after the initial Distribution
Date, the excess, if any, of the Group 1 Principal Distribution Amount
for the immediately preceding Distribution Date, over the aggregate
distributions of principal made on the Class A-4 Certificates on such
immediately preceding Distribution Date.
"Group 1 Servicing Standard": The standards for the conduct
of the Master Servicer and the Group 1 Special Servicer in the performance of
their respective obligations under this Agreement with respect to the Group 1
Mortgage Loan as set forth in Section 3.1(a).
"Group 1 Special Servicer": Midland Loan Services, L.P., a
Missouri limited partnership, or its successor in interest, or any successor
Group 1 Special Servicer appointed as herein provided.
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"Group 1 Special Servicing Fee Rate": A rate equal to 0.35%.
"Group 2 Available Distribution Amount": With respect to
REMIC I, the portion of the Available Distribution Amount arising from the
Group 2 Mortgage Loans; with respect to REMIC II, all amounts distributed with
respect to the REMIC I Interests other than the REMIC I Interest corresponding
to the Group 1 Mortgage Loan and the Transferable Servicing Interest; and, with
respect to REMIC III, all amounts distributed with respect to REMIC II
Interests other than the Class A-4-II Interest.
"Group 2 Certificate": The Class A-1, Class A-2, Class A-3,
Class B, Class C, Class D, Class E, Class F-1, Class F-2 and Class G
Certificates.
"Group 2 Mortgage Loans": The Mortgage Loans (including
related REO Mortgage Loans) other than the Group 1 Mortgage Loan.
"Group 2 Principal Distribution Amount": For any Distribution
Date, the aggregate of the following (without duplication):
(a) the aggregate of the principal portions of all Monthly
Payments (other than Balloon Payments) due, or the principal portion
of any Assumed Monthly Payments deemed due, on or in respect of the
Group 2 Mortgage Loans for their Due Dates during the related
Collection Period;
(b) the aggregate of all Principal Prepayments received on
the Group 2 Mortgage Loans during the related Collection Period
(including any Remaining Cash Flow);
(c) with respect to any Group 2 Mortgage Loan as to which
the related stated maturity date occurred during or prior to the
related Collection Period, any payment of principal made by or on
behalf of the related borrower during the related Collection Period
(including any Balloon Payment), in each case, net of any portion of
such payment that represents a recovery of the principal portion of
any Monthly Payment (other than a Balloon Payment) due, or the
principal portion of any Assumed Monthly Payment deemed due, in
respect of such Mortgage Loan on a Due Date during or prior to the
related Collection Period to the extent previously advanced and not
previously recovered;
(d) the aggregate of all Liquidation Proceeds,Insurance
Proceeds, REO Proceeds and Condemnation Proceeds, and proceeds of
Group 2 Mortgage
27
Loan repurchases that were received on or in respect of Group 2
Mortgage Loans during the related Collection Period and that were
identified and applied by the Master Servicer as recoveries of
principal, in each case net of any portion of such amounts that
represents a recovery of the principal portion of any Monthly Payment
(other than a Balloon Payment) due, or the principal portion of any
Assumed Monthly Payment deemed due, in respect of the Group 2 Mortgage
Loans on a Due Date during or prior to the related Collection Period
to the extent previously advanced and not previously recovered;
(e) for each Distribution Date after the initial
Distribution Date, the excess, if any, of the Group 2 Principal
Distribution Amount for the immediately preceding Distribution Date,
over the aggregate distributions of principal made on any Class of
Certificates (other than the Class IO, Class R-I, Class R-II and Class
R-III Certificates), on such immediately preceding Distribution Date;
and
(f) the excess, if any, of the Group 1 Principal Distribution
Amount for such Distribution Date over the portion thereof payable in
respect of the Class A-4-II Interests.
"Group 2 Servicing Standard": The standards for the conduct
of the Master Servicer, the Group 2 Special Servicer and the NOM Special
Servicer in the performance of their respective obligations under this
Agreement with respect to the Group 2 Mortgage Loans as set forth in Section
3.2(a).
"Group 2 Special Servicer": CRIIMI MAE Services Limited
Partnership, a Maryland limited partnership, or its successor in interest, or
any successor Group 2 Special Servicer appointed as herein provided.
"Group 2 Special Servicing Fee Rate": A rate equal to 0.25%.
"Group 2 Weighted Average Rate": For each Distribution Date
and the related Interest Accrual Period, the weighted average of the REMIC I
Net Mortgage Rates for all of the REMIC I Interests other than the REMIC I
Interest related to the Group 1 Mortgage Loan, weighted on the basis of their
respective Certificate Balances as of the close of business on the preceding
Distribution Date.
"Hazardous Materials": Any dangerous, toxic or hazardous
pollutants, chemicals, wastes, or substances, including, without limitation,
those so identified
28
pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., or any other environmental laws
now existing, and specifically including, without limitation, asbestos and
asbestos-containing materials, polychlorinated biphenyls, radon gas, petroleum
and petroleum products, urea formaldehyde and any substances classified as
being "in inventory", "usable work in process" or similar classification which
would, if classified as unusable, be included in the foregoing definition.
"Holder": With respect to any Certificate, a
Certificateholder; with respect to any REMIC I or REMIC II Interest, the
Trustee.
"Indemnified Party": As defined in Section 8.5(c).
"Indemnitors": As defined in Section 8.5(c).
"Independent": When used with respect to any specified
Person, any other Person who (i) does not have any direct financial interest,
or any material indirect financial interest, in any of the Manager, the
Depositor, the Master Servicer, any Special Servicer, any Borrower or any
Affiliate thereof, and (ii) is not connected with any such specified Person as
an officer, employee, promoter, underwriter, trustee, partner, director or
Person performing similar functions.
"Independent Contractor": Either (i) any Person that would be
an "independent contractor" with respect to the Trust Fund within the meaning
of Section 856(d)(3) of the Code if the Trust Fund were a real estate
investment trust (except that the ownership tests set forth in that section
shall be considered to be met by any Person that owns, directly or indirectly,
35% or more of any Class or 35% or more of the aggregate value of all Classes
of Certificates), provided that the Trust Fund does not receive or derive any
income from such Person and the relationship between such Person and the Trust
Fund is at arm's length, all within the meaning of Treasury Regulations Section
1.856-4(b)(5) (except that a Special Servicer shall not be considered to be an
Independent Contractor under the definition in this clause (i) unless an
Opinion of Counsel (obtained at the expense of the Special Servicer) addressed
to the Special Servicer and the Trustee has been delivered to the Trustee to
the effect that the Special Servicer meets the requirements of such definition)
or (ii) any other Person (including the Special Servicer) if the Special
Servicer, on behalf of itself and the Trustee, has received an Opinion of
Counsel (obtained at the expense of the party seeking to be deemed an
Independent Contractor) to the effect that the taking of any action in respect
of any REO Property by such Person, subject to any conditions therein
specified, that is otherwise herein contemplated to be taken by an
29
Independent Contractor will not cause such REO Property to cease to qualify as
"foreclosure property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for purposes of Section
860D(a) of the Code) or cause any income realized with respect of such REO
Property to fail to qualify as Rents from Real Property (provided that such
income would otherwise so qualify).
"Initial Principal Amount": As defined in the Preliminary
Statement.
"Initial Sub-Servicing Agreement": The sub-servicing
agreements entered into by the Master Servicer on or prior to the Closing Date
(as amended from time to time) with ▇.▇. ▇▇▇▇▇▇ & Company (or one of its
Affiliates) with respect to the Farb Loan and KeyCorp Real Estate Capital
Markets, Inc. (or one of its Affiliates) with respect to the Shilo Inn Loans
and as delivered to the Trustee by the Master Servicer pursuant to Section 2.1.
"Initial Sub-Servicing Event of Default": An "Event of
Default" as defined in the Initial Sub-Servicing Agreements.
"Institutional Accredited Investor": An entity meeting the
requirements of Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated
under the 1933 Act and which is not otherwise a Qualified Institutional Buyer
or an entity all of the equity owners of which meet the requirements of Rule
501(a)(1), (2), (3) or (7) of Regulation D promulgated under the 1933 Act.
"Insurance Proceeds": Proceeds of any fire and hazard
insurance policy, title policy or other insurance policy relating to a Mortgage
Loan and/or the Mortgaged Property securing any Mortgage Loan (including any
amounts paid by the Master Servicer or a Special Servicer pursuant to Section
3.9), to the extent such proceeds are not to be applied to the restoration of
the related Mortgaged Property or released to the Borrower in accordance with
the express requirements of the related Mortgage or Note or other documents
included in the related Mortgage File or in accordance with the Servicing
Standard.
"Interest": A REMIC I Interest or a REMIC II Interest.
"Interest Accrual Period": With respect to any Distribution
Date, the calendar month preceding the month in which such Distribution Date
occurs. Interest for each Interest Accrual Period shall be calculated based on
a 360-day year consisting of twelve 30-day months.
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"Interested Person": As of any date of determination, the
Depositor, the Master Servicer, any Special Servicer, the Trustee, any
Borrower, any Manager of a Mortgaged Property, any Independent Contractor
engaged by a Special Servicer pursuant to Section 3.19, or any Person known to
a Responsible Officer of the Trustee to be an Affiliate of any of them.
"Investment Account": As defined in Section 3.9(a).
"Investment Representation Letter": As defined in Section
5.2(c)(i).
"IRS": The Internal Revenue Service.
"Liquidation": The liquidation of a Mortgage Loan through a
trustee's sale, foreclosure sale or otherwise, the sale of a Specially Serviced
Mortgage Loan or an REO Property in accordance with Section 3.20 or the sale of
all of the Mortgage Loans in accordance with Section 9.1.
"Liquidation Expenses": Expenses incurred on behalf of the
Trust Fund in connection with the liquidation of any Mortgage Loan or property
acquired in respect thereof (including, without limitation, legal fees and
expenses, committee or referee fees, and, if applicable, brokerage commissions,
and conveyance taxes) and any Property Advances, with interest thereon at the
Reimbursement Rate, incurred with respect to such Mortgage Loan or such
property not previously reimbursed from collections or other proceeds
therefrom.
"Liquidation Proceeds": The amount (other than Insurance
Proceeds) received in connection with (i) the taking of a Mortgaged Property by
exercise of the power of eminent domain or condemnation or (ii) a Liquidation.
"Liquidation Realized Loss": With respect to each
Liquidation, an amount equal to (i) the sum of(A) the Principal Amount of the
Mortgage Loan (or deemed Principal Amount, in the case of an REO Property ) as
of the date of the Liquidation (excluding any portion of the Principal Amount
attributable to accrued Additional Interest), plus (B) interest accrued
(including interest deemed to have accrued in the case of an REO Property and
excluding accrued Additional Interest) at the applicable Mortgage Rate in
effect from time to time for which interest has not been paid (including
through application of REO Revenues from REO Property) or from the date to
which interest was last (x) paid or (y) accrued and added to the
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Principal Amount of such Mortgage Loan until the Due Date in the Collection
Period in which the Liquidation occurred, on the Principal Amount (excluding
any portion thereof attributable to Additional Interest) (or, in the case of
REO Property, the deemed Principal Amount) of such Mortgage Loan outstanding
from time to time during the foregoing period, minus (ii) the sum of (X)
related REO Revenues derived from the operation of REO Property and applied as
recoveries of principal or interest on the related Mortgage Loan or REO
Property (but without duplication of amounts deemed paid pursuant to clause
(i)(B) above), and (Y) related Net Liquidation Proceeds and Net Insurance
Proceeds received during the Collection Period in which such Liquidation
occurred. Net REO Proceeds, Net Liquidation Proceeds and Net Insurance Proceeds
shall be applied first against the unpaid interest on the Mortgage Loan,
calculated as described in clause (B) above, and then against the Principal
Amount of such Mortgage Loan, calculated as described in clause (A) above.
"Loan Agreement": With respect to any Mortgage Loan, the loan
agreement, if any, between the Originator and the Borrower, pursuant to which
such Mortgage Loan was made.
"Loan Number": With respect to any Mortgage Loan, the loan
number by which such Mortgage Loan was identified on the books and records of
the Master Servicer or any subservicer for the Master Servicer, as set forth in
the Mortgage Loan Schedule.
"MAI": Member of the Appraisal Institute with at least 5
years of experience in the related property type.
"Management Agreement": With respect to any Mortgage Loan,
the Management Agreement, if any, by and between the Manager and the related
Borrower, or any successor Management Agreement between such parties.
"Manager": With respect to any Mortgage Loan, any property
manager for the related Mortgaged Property.
"Master Servicer": Midland Services, L.P., a Missouri limited
partnership, or its successor in interest, or any successor Master Servicer
appointed as herein provided.
"Master Servicer Mortgage File": With respect to any Mortgage
Loan, all documents related to such Mortgage Loan that are not required to be
delivered to
32
the Custodian pursuant to Section 2.1 or to be maintained as part
of the Trustee Mortgage File, including without limitation:
(i) a copy of the Management Agreement, if any, for the
related Mortgaged Property;
(ii) a copy of the related ground lease, as amended, if
any, for such Mortgaged Property;
(iii) any and all amendments, modifications and
supplements to, and waivers related to, any of the
foregoing;
(iv) copies of the related appraisals, surveys,
environmental reports and other similar documents;
and
(v) any other written agreements related to such
Mortgage Loan.
"Master Servicer Remittance Report": A report prepared by the
Master Servicer in such media as may be agreed upon by the Master Servicer and
the Trustee containing such information regarding the Mortgage Loans as will
permit the Trustee to calculate the amounts to be distributed pursuant to
Section 4.3, to allocate Realized Losses among the Interests and the
Certificates pursuant to Section 4.9 and to furnish statements to
Certificateholders pursuant to Section 4.4 and containing such additional
information as the Master Servicer and the Trustee may from time to time agree.
"Maturity Date": With respect to each Mortgage Loan, the
maturity date as set forth in the Mortgage Loan Schedule.
"Modification Loss": With respect to any Mortgage Loan or
Separate Loan Advance, (i) a decrease in the Principal Amount of such Mortgage
Loan or Separate Loan Advance as a result of a modification thereof in
accordance with the terms hereof, (ii) in the case of a modification of a
Mortgage Loan that reduces the Mortgage Rate thereof, the excess, on each due
date for such Mortgage Loan, of the amount of interest that would have accrued
at a rate equal to the original Mortgage Rate over the amount of interest that
actually accrued on the Mortgage Loan for such due period; (iii) the amount of
any pastdue interest that is forgiven; provided, that such loss shall exclude
any amount attributable to Additional Interest; and (iv) any expenses connected
with such modifications to the extent (x) reimbursable to the
33
Trustee, the Fiscal Agent, a Special Servicer or the Master Servicer and (y)
not recovered from the Borrower.
"Monthly Payment": With respect to any Mortgage Loan (other
than any REO Mortgage Loan) and any Due Date, the scheduled monthly payment of
principal and interest, excluding any Balloon Payment, on such Mortgage Loan
which is payable by the related Borrower on such Due Date under the related
Note (after giving effect to any extension or modification permitted
hereunder). With respect to any REO Mortgage Loan, the monthly payment which
would otherwise have been payable on such Due Date had the related Note not
been discharged (after giving effect to any extension or other modification),
determined as set forth in the preceding sentence and on the assumption that
all other amounts, if any, due thereunder are paid when due.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on or first priority ownership interest in a Mortgaged
Property securing the related Note.
"Mortgage File": With respect to any Mortgage Loan, the
mortgage documents required to be maintained in the Trustee Mortgage File or
the Master Servicer Mortgage File.
"Mortgage Loan": Each of the mortgage loans transferred and
assigned to the Trustee pursuant to Section 2.1 and from time to time held in
the Trust Fund, such mortgage loans originally so transferred, assigned and
held being identified on the Mortgage Loan Schedule as of the Cut-off Date.
Such term shall include any REO Mortgage Loan, but shall not include the
Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note or the ▇▇▇▇▇▇ Class B Note. Each Mortgage Loan
having a Separate Loan Advance shall be treated as two or more separate loans
for purposes of calculating the Mortgage Rate and Principal Amount thereof.
"Mortgage Loan Documents": Any and all documents contained in
the Trustee Mortgage File and the Master Servicer Mortgage File.
"Mortgage Loan Purchase and Sale Agreement": The Mortgage
Loan Purchase and Sale Agreement, dated the Closing Date, between the Depositor
and the Mortgage Loan Seller, substantially in the form attached hereto as
Exhibit G.
34
"Mortgage Loan Schedule": As of any date, the list of
Mortgage Loans included in the Trust Fund on such date, such list as of the
Closing Date being attached hereto as Exhibit B.
"Mortgage Loan Seller": ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Capital Inc.,
a Delaware corporation, and its successors and assigns.
"Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan (in the absence of
a default), as set forth in the Mortgage Loan Schedule.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of a fee simple or
leasehold estate in a parcel of land improved by a commercial property,
together with any personal property, fixtures, leases and other property or
rights pertaining thereto.
"Net Liquidation Proceeds": The excess of Liquidation
Proceeds received with respect to any Mortgage Loan over the amount of
Liquidation Expenses incurred with respect thereto.
"Net Cumulative NOM Principal Collections": For any
Distribution Date, the cumulative amount of all principal payments collected on
the NOM Loan during all Collection Periods preceding such Distribution Date
less any distributions of principal to the Class F-1-II Interest on all prior
Distribution Dates.
"Net Mortgage Rate": With respect to any Mortgage Loan, the
Mortgage Rate for such Mortgage Loan minus the Servicing Fee Rate and the
Trustee Fee Rate; provided, however, that the Net Mortgage Rate shall not
include any Additional Interest Rate.
"Net REO Proceeds": With respect to each REO Property, REO
Proceeds with respect to such REO Property net of any Property Advances,
insurance premiums, taxes, assessments and other costs and expenses permitted
to be paid therefrom pursuant to Section 3.19(b).
"New Lease": Any lease of REO Property entered into on behalf
of the Trust Fund, including any lease renewed or extended on behalf of the
Trust Fund if the Trust Fund has the right to renegotiate the terms of such
lease.
35
"1933 Act": The Securities Act of 1933, as it may be amended
from time to time.
"1934 Act": The Securities Exchange Act of 1934, as it may be
amended from time to time.
"NOM Controlling Class": As of any date of determination, the
Class F-1 Certificates shall be the NOM Controlling Class for so long as (i)
the Certificate Balance of such Class of Certificates is greater than
$1,000,000, (ii) if the NOM Loan has become a Specially Serviced Mortgage Loan,
until the one year anniversary of such event, the NOM Expected Loss is less
than 150% of the Certificate Balance of the Class F-1 Certificates and (iii) if
the NOM Loan has become a Specially Serviced Mortgage Loan, on the basis of the
first or any subsequent Updated Appraisal of the related Mortgaged Property at
least twelve months beyond the NOM Loan becoming a Specially Serviced Mortgage
Loan, the NOM Expected Loss is less than the excess, if any, of the Certificate
Balance of the Class F-1 Certificates over $1,000,000. In the event that any of
the conditions set forth in the preceding sentence are not met, the NOM
Controlling Class shall be the Controlling Class.
"NOM Expected Loss": The excess, if any, of the Principal
Amount of the NOM Loan at the Cut-off Date, together with all accrued and
unpaid interest (other than Additional Interest), unreimbursed Property
Advances and Additional Trust Fund Expenses in respect of the NOM Loan at the
time of calculation of the NOM Expected Loss, over the Appraised Value of the
Mortgaged Property securing the NOM Loan at the time of calculation of the NOM
Expected Loss.
"NOM Loan": The Mortgage Loan shown as Loan Numbers 6 and
7 on the Mortgage Loan Schedule.
"NOM Special Servicer": CRIIMI MAE Services Limited
Partnership, a Maryland limited partnership, or its successor in interest, or
any successor NOM Special Servicer appointed as herein provided.
"Nonrecoverable Advance ": Any portion of an Advance proposed
to be made or previously made which has not been previously reimbursed to the
Master Servicer, the Trustee, the Fiscal Agent or a Special Servicer, as
applicable, and which the Master Servicer, the Trustee, the Fiscal Agent or
such Special Servicer has determined in its good faith business judgment will
not or, in the case of a proposed Advance, would not, be ultimately recoverable
by the Master Servicer, the Trustee, the Fiscal Agent or such Special Servicer,
as applicable, from late payments, Insurance
36
Proceeds, Condemnation Proceeds, Liquidation Proceeds and other collections on
or in respect of the related Mortgage Loan. To the extent that any Borrower is
not obligated under the related Mortgage Loan Documents to pay or reimburse any
portion of any Advances that are outstanding with respect to the related
Mortgage Loan as a result of a modification of such Mortgage Loan by a Special
Servicer which forgives unpaid Monthly Payments or other amounts which the
Master Servicer, the Trustee, the Fiscal Agent or such Special Servicer had
previously advanced (and which the related Borrower was previously obligated to
repay), and the Master Servicer, the Trustee, the Fiscal Agent or such Special
Servicer determines that no other source of payment or reimbursement for such
advances is available to it, such Advances shall be deemed to be
nonrecoverable; provided, however, that in connection with the foregoing the
Master Servicer, the Trustee, the Fiscal Agent, or such Special Servicer shall
provide an Officer's Certificate as described below. The determination by the
Master Servicer, the Trustee, the Fiscal Agent or a Special Servicer, as
applicable, that it has made a Nonrecoverable Advance or that any proposed
Advance, if made, would constitute a Nonrecoverable Advance shall be evidenced
by a certificate of a Servicing Officer, Responsible Officer or Vice President
or equivalent or senior officer of the Fiscal Agent or such Special Servicer,
as appropriate, delivered to the Master Servicer, the Trustee, the related
Special Servicer and the Depositor setting forth such determination and the
procedures and considerations of the Master Servicer, the Trustee, the Fiscal
Agent or such Special Servicer, as applicable, forming the basis of such
determination, which shall include any information or reports obtained by the
Master Servicer, the Trustee, the Fiscal Agent or such Special Servicer, such
as Updated Appraisals, property operating statements, rent rolls, property
inspection reports and engineering reports, which may support such
determinations. Notwithstanding the above, the Trustee and the Fiscal Agent
shall be entitled to rely upon any determination by the Master Servicer that
any Advance previously made is a Nonrecoverable Advance or that any proposed
Advance, if made, would constitute a Nonrecoverable Advance.
"Non-U.S. Person": A person that is not (i) a citizen or
resident of the United States; (ii) a corporation, partnership, or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof; (iii) an estate whose income is subject to United States
federal income tax regardless of its sources; or (iv) a trust as to which a
court within the United States is able to exercise primary jurisdiction over
the administration of the trust and one or more U.S. Persons have the authority
to control all substantial decisions of the trust.
"Note": With respect to any Mortgage Loan as of any date of
determination, the note or other evidence of indebtedness and/or agreements
37
evidencing the indebtedness of the related Borrower or obligor under such
Mortgage Loan (excluding the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note and the ▇▇▇▇▇▇
Class B Note), in each case, including any amendments or modifications, or any
renewal or substitution notes, as of such date.
"Notional Amount": With respect to the Class IO Certificates,
an amount equal to the Certificate Balances of the Class A-1, Class A-2, Class
A-3, Class B, Class C, Class D, Class E, Class F-1, Class F-2 and Class G
Certificates and, with respect to the Component A-1-II, Component A-2-II,
Component A-3- II, Component B-II, Component C-II, Component D-II, Component
E-II, Component F-1-II, Component F-2-II and Component G-II, an amount equal to
the Certificate Balance of the Class A-1-II, Class A-2-II, Class A-3-II, Class
B-II, Class C-II, Class D-II, Class E-II, Class F-1-II, Class F-2-II and Class
G-II Interests, respectively.
"Notice of Termination": Any of the notices given to the
Trustee by the Master Servicer, the Depositor or the Group 2 Special Servicer
pursuant to Section 9.1(c).
"Officer's Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President, a Vice President
(however denominated), the Treasurer, the Secretary, one of the Assistant
Treasurers or Assistant Secretaries or any other officer of, or of the general
partner of, the Master Servicer or a Special Servicer customarily performing
functions similar to those performed by any of the above designated officers
and also with respect to a particular matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject, or an authorized officer of the Depositor, and
delivered to the Depositor, the Trustee, the applicable Special Servicer or the
Master Servicer, as the case may be.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be counsel for the Depositor, a Special Servicer or the
Master Servicer, as the case may be, acceptable to the Trustee, except that any
opinion of counsel relating to (a) qualification of REMIC I, REMIC II or REMIC
III as a REMIC or the imposition of tax under the REMIC Provisions on any
income or property of any of the REMICs, (b) compliance with the REMIC
Provisions (including application of the definition of "Independent
Contractor") or (c) a resignation of the Master Servicer or a Special Servicer
pursuant to Section 6.4, must be an opinion of counsel who is Independent of
the Depositor, the Special Servicer and the Master Servicer.
38
"Originator": With respect to a Mortgage Loan, the originator
of such Mortgage Loan, as identified in the Mortgage Loan Schedule.
"Ownership Interest": As to any Certificate, any ownership or
security interest in such Certificate as the Holder thereof and any other
interest therein, whether direct or indirect, legal or beneficial, as owner or
as pledgee.
"P&I Advance": With respect to any Distribution Date, (i)
with respect to any Mortgage Loan as to which the Monthly Payment (other than a
Balloon Payment and without regard to any acceleration of principal under such
Mortgage Loan) due on the related Due Date in the related Collection Period was
not received by the Master Servicer (including any sub-servicer of the Master
Servicer) or the applicable Special Servicer, as applicable, as of the Business
Day immediately proceeding the Remittance Date, the amount of such Monthly
Payment not received from the related Borrower after giving effect to any
changes in Monthly Payments on modified Mortgage Loans; (ii) with respect to
any Mortgage Loan as to which a Balloon Payment was due during or prior to the
related Collection Period but was delinquent, in whole or in part, as of the
related Determination Date, an amount equal to the excess, if any, of the
Assumed Monthly Payment for such Balloon Mortgage Loan on the Due Date in the
related Collection Period, over any late collections received in respect of
such Balloon Payment during such Collection Period that are not reimbursable to
the Master Servicer, the Trustee or the Fiscal Agent for a prior P&I Advance;
and (iii) with respect to each REO Property related to a Mortgage Loan, an
amount equal to the excess, if any, of the Assumed Monthly Payment for such REO
Property and the related Due Date, over the Net REO Proceeds from the operation
of such REO Property for the related Collection Period, reduced by any amounts
required to be paid as taxes on such Net REO Proceeds (including pursuant to
Section 860G(c) of the Code) and any amounts reimbursable to the Master
Servicer, the Trustee or the Fiscal Agent for a prior P&I Advance. All P&I
Advances for any Mortgage Loan that has been modified shall be calculated on
the basis of the terms as modified. Notwithstanding the foregoing, in the case
of any Mortgage Loan which is a Required Appraisal Mortgage Loan, the interest
portion of the P&I Advance shall be reduced to an amount equal to the product
of (x) the amount that would be the interest portion of the P&I Advance without
regard to this sentence and (y) a fraction, the numerator of which is the
Scheduled Principal Amount of the applicable Mortgage Loan minus the Appraisal
Reduction Amount, and the denominator of which is the Scheduled Principal
Amount of the applicable Mortgage Loan.
"Pass-Through Rate": Any one of the Class ▇-▇, ▇▇▇▇▇ ▇-▇,
Class A-3, Class A-4, Class B, Class C, Class D, Class E, Class F-1, Class F-2,
Class G, Class ▇-
▇▇
▇-▇▇, Class A-2-II, Class A-3-II, Class B-II, Class C-II, Class D-II, Class
E-II, Class F-1-II, Class F-2-II or Class G-II Pass-Through Rates.
"Paying Agent": The paying agent appointed pursuant to
Section 5.5.
"Permitted Certificates": As defined in Section 2.3(a)(v)(B).
"Percentage Interest": As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made with respect to
the related Class. With respect to any Certificate (except the Class R-I, Class
R-II and Class R-III Certificates), the percentage interest is derived by
dividing the denomination of such Certificate by the initial Certificate
Balance or notional amount of such Class of Certificates. With respect to any
Class R-I, Class R-II or Class R-III Certificate, the percentage interest is
set forth on the face thereof.
"Permitted Investments": Any one or more of the following
obligations or securities payable on demand or having a scheduled maturity on
or before the Business Day preceding the date on which such funds are required
to be drawn, regardless of whether issued by the Depositor, the Master
Servicer, a Special Servicer, the Trustee or any of their respective
Affiliates, and having at all times the required ratings, if any, provided for
in this definition (provided that no Permitted Investment, if downgraded, shall
be required to be sold at a loss, except if the remaining term to maturity at
the time of such downgrading is greater than 30 days), unless each Rating
Agency shall have confirmed in writing to the Master Servicer or the applicable
Special Servicer, as applicable, that a lower rating will not result in the
withdrawal, downgrading or qualification of the ratings then assigned to the
Certificates:
(i) direct obligations of, or obligations guaranteed
as to full and timely payment of principal and
interest by, the United States or any agency or
instrumentality thereof, provided that such
obligations are backed by the full faith and
credit of the United States of America,
including, without limitation, U.S. Treasury
Obligations, Farmers Home Administration
certificates of beneficial interest, General
Services Administration participation
certificates and Small Business Administration
guaranteed participation certificates or
guaranteed pool certificates;
(ii) direct obligations of FHLMC (debt obligations
only), FNMA (debt obligations only), the Federal
Farm Credit System
40
(consolidated systemwide bonds and notes only),
the Federal Home Loan Banks (consolidated debt
obligations only), the Student Loan Marketing
Association (debt obligations only), the
Financing Corp. (consolidated debt obligations
only), and the Resolution Funding Corp. (debt
obligations only);
(iii) Federal funds, time deposits in, or certificates
of deposit of, or bankers' acceptances, or
repurchase obligations, all having maturities of
not more than 365 days, issued by, any bank or
trust company, savings and loan association or
savings bank, depository institution or trust
company having a short term debt obligation
rating that is in the highest short-term rating
category of each Rating Agency;
(iv) commercial paper having a maturity of 365 days or
less (including (A) both non-interest-bearing
discount obligations and interest-bearing
obligations payable on demand or on a specified
date not more than one year after the date of
issuance thereof and (B) demand notes that
constitute vehicles for investment in commercial
paper) that is rated by each Rating Agency in its
highest short-term unsecured rating category;
(v) units of taxable money market funds or mutual
funds that seek to maintain a constant asset
value and have been rated by each Rating Agency
in its highest short term rating category,
provided, that the Master Servicer or the
applicable Special Servicer shall have determined
that such funds are "permitted investments" for a
REMIC;
(vi) if each of the Rating Agencies has previously
confirmed in writing to the Trustee that the
holding of such demand, money market or time
deposit, demand obligation or any other
obligation, security or investment shall not
result, in and of itself, in a downgrading,
withdrawal or qualification of the rating then
assigned by such Rating Agency to any Class of
Certificates, any other demand, money market or
time deposit, demand obligation or any other
obligation, security or investment, as may be
acceptable to each Rating Agency as a permitted
investment of funds backing securities
42
having ratings equivalent to its initial rating
of the Class A-1, Class A-2, Class A-3 and Class
A-4 Certificates; and
(vii) such other obligations as to which each of the
Rating Agencies has confirmed in writing that
such obligations are acceptable as Permitted
Investments and the holding of such obligations
by the Master Servicer or the applicable Special
Servicer, as applicable, shall not result, in and
of itself, in a downgrading, withdrawal or
qualification of the rating then assigned by such
Rating Agency to any Class of Certificates;
provided, however, that (a) none of such obligations or securities listed above
may have an "r" highlighter affixed to its rating if rated by S&P; (b) each
such obligation or security shall have a fixed dollar amount of principal due
at maturity which cannot vary or change; (c) except with respect to units of
money market funds pursuant to clause (v) above, if any such obligation or
security provides for a variable rate of interest, interest shall be tied to a
single interest rate index plus a single fixed spread (if any) and move
proportionately with that index; and (d) each such investment shall mature or
be payable on demand prior to the next Distribution Date and shall not be sold;
and provided, further, however, that such instrument qualifies as a "cash flow
investment" pursuant to Code Section 860G(a)(6) earning a passive return in the
nature of interest and that no instrument or security shall be a Permitted
Investment if (i) such instrument or security evidences a right to receive only
interest payments or (ii) the right to receive principal and interest payments
derived from the underlying investment provides a yield to maturity in excess
of 120% of the yield to maturity at par of such underlying investment as of the
date of its acquisition.
"Permitted Mortgage Loans": As defined in Section
2.3(a)(v)(A).
"Permitted Pooling and Servicing Agreement": As defined in
Section 2.3(a)(v)(B).
"Permitted Transferee": With respect to a Class R-I, Class
R-II or Class R-III Certificate, any Person or agent thereof that is a
Qualified Institutional Buyer, Institutional Accredited Investor or any other
Person designated by the Certificate Registrar based upon an Opinion of Counsel
(provided at the expense of such Person or the Person requesting the Transfer)
to the effect that the Transfer of an Ownership Interest in any Class R-I,
Class R-II or Class R-III Certificate to such Person will not cause REMIC I,
REMIC II or REMIC III to fail to qualify as a
43
REMIC at any time that the Certificates are outstanding other than (a) a
Disqualified Organization or (b) a Person that is a Disqualified Non-U.S.
Person.
"Permitted Trust": As defined in Section 2.3(a)(v)(B).
"Person": Any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
estate, unincorporated organization or government or any agency or political
subdivision thereof.
"Plan": As defined in Section 5.2(i).
"Prepayment Assumption": The assumption attached hereto as
Exhibit J.
"Prepayment Premium": With respect to any Mortgage Loan or
Separate Loan Advance, any yield maintenance charge paid by the related
Borrower in connection with (i) any Principal Prepayment on such Mortgage Loan
pursuant to the Note or Mortgage that provides for the payment of such premium
or (ii) any provision in the Mortgage or Note which provides for the payment of
such charge in an event of an acceleration of the maturity date of such
Mortgage Loan upon a default thereunder.
"Prepayment Premium Allocation Amount": With respect to any
Principal Prepayment on any Group 2 Mortgage Loan and with respect to any Class
of Group 2 Certificates (or related Interests), the product of (1) a fraction
(not greater than one and not less than zero) (A) the numerator of which is the
applicable Pass-Through Rate minus the discount rate used in calculating the
Prepayment Premium with respect to such Principal Prepayment and (B) the
denominator of which is the difference between the related Mortgage Rate and
the discount rate used in calculating the Prepayment Premium with respect to
such Principal Prepayment, (2) the applicable Class Prepayment Percentage and
(3) the amount of such Prepayment Premium collected.
"Principal Amount": The actual unpaid principal amount of a
Mortgage Loan or Separate Loan Advance (or, in the case of an REO Property, the
deemed unpaid principal amount calculated as provided herein) as of the date of
calculation.
44
"Principal Prepayment": With respect to any Mortgage Loan or
Separate Loan Advance, any payment of principal made by the related Borrower
which is received in advance of its scheduled Due Date.
"Principal Recovery Fee": As defined in Section 3.14(c).
"Privately Placed Certificates": The Class F-1 Certificates,
the Class F-2 Certificates, the Class G Certificates, the Class R-I
Certificates, the Class R-II Certificates and the Class R-III Certificates.
"Property Advance": As to any Mortgage Loan, any advance made
by the Master Servicer, the Trustee, the Fiscal Agent or a Special Servicer in
respect of costs and expenses incurred pursuant to Sections 3.12(b), 3.12(f),
3.12(i) and 3.20(b) or any expenses incurred to protect and preserve the
security for such Mortgage Loan or taxes and assessments or insurance premiums,
pursuant to Section 3.5, 3.10 or Section 3.24, as applicable and any other
advances deemed Property Advances hereunder. Notwithstanding anything to the
contrary herein, Property Advances with respect to the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan
shall be recoverable only from collections with respect to such Mortgage Loan,
the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note, the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Intercreditor Agreement
and the related Mortgaged Property, and shall not otherwise be recoverable from
the Trust Fund (except as otherwise provided in Section 3.7(ii)).
"Publicly Offered Certificates": The Class A-1 Certificates,
the Class A-2 Certificates, the Class A-3 Certificates, the Class A-4
Certificates, the Class IO Certificates, the Class B Certificates, the Class C
Certificates, the Class D Certificates and the Class E Certificates.
"Qualified Institutional Buyer": A qualified institutional
buyer within the meaning of Rule 144A.
"Qualified Insurer": An insurance company or security or
bonding company qualified to write the related insurance policy in the relevant
jurisdiction, which (i) except as provided in clauses (ii) or (iii) below,
shall have a claims paying ability of (A) "AA" or better by S&P and "Aa2" or
better by Moody's or (B) in the case of insurance policies (maintained by the
related Borrowers, but not in the case of policies maintained by the Master
Servicer or a Special Servicers) and relating to Mortgage Loans bearing Loan
Numbers 8, 9 and 10, not less than "A" by ▇▇▇▇▇▇ ▇. Best Company, Inc., (ii) in
the case of public liability insurance policies required to be maintained with
respect to REO Properties in accordance with Section 3.10(a), shall have a
claims paying ability of "AA" or better by S&P and "Aa2"or better by Moody's
45
or (iii) in the case of the fidelity bond and errors and omissions insurance
required to be maintained pursuant to Section 3.9(c), shall have a claims
paying ability rated "A" or better by S&P and "A2" or better by Moody's ,
unless in any such case each of the Rating Agencies have confirmed in writing
that an insurance company with a lower claims paying ability shall not result,
in and of itself, in a downgrading, withdrawal or qualification of the rating
then assigned by such Rating Agency to any Class of Certificates.
"Qualified Mortgage": A Mortgage Loan that is a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code (but without
regard to the rule in Treasury Regulations 1.860G-2(f)(2) that treats a
defective obligation as a qualified mortgage), or any substantially similar
successor provision.
"Rated Final Distribution Date": The first Distribution Date
following the third anniversary of the end of the amortization term (without
giving effect to any Balloon Payments) of the Mortgage Loan that, as of the
Cut-off Date, has the longest remaining amortization term.
"Rating Agency": Each of S&P and ▇▇▇▇▇'▇. References herein
to the highest long-term senior unsecured debt rating category of each Rating
Agency shall mean "AAA" with respect to S&P and "Aaa" with respect to ▇▇▇▇▇'▇.
References herein to the highest short-term senior unsecured debt rating
category of each Rating Agency shall mean "A-1+" with respect to S&P and "P1"
with respect to ▇▇▇▇▇'▇.
"Real Property": Land or improvements thereon such as
buildings or other inherently permanent structures (including items that are
structural components of such buildings or structures), in each such case as
such terms are used in the REMIC Provisions.
"Realized Interest Loss": (i) In the case of a Liquidation
Realized Loss, the portion of any Liquidation Realized Loss that exceeds the
Realized Principal Loss on the related Mortgage Loan, (ii) in the case of a
Bankruptcy Loss, the portion of such Realized Loss attributable to accrued
interest on the related Mortgage Loan and (iii) a Modification Loss described
in clause (ii) or (iii) of the definition thereof; provided, that a
Modification Loss described in clause (ii) of the definition of "Modification
Loss" shall be deemed to occur on each Distribution Date in the amount
attributable thereto.
"Realized Loss": A Liquidation Realized Loss, a Modification
Loss or a Bankruptcy Loss.
46
"Realized Principal Loss": (i) In the case of a Liquidation
Realized Loss, the amount of such Realized Loss, to the extent that it does not
exceed the Principal Amount of the related Mortgage Loan (or deemed Principal
Amount, in the case of an REO Mortgage Loan) at the time the calculation is
performed; (ii) in the case of a Modification Loss, the amount of such
Modification Loss described in clause (i) of the definition thereof, and (iii)
in the case of a Bankruptcy Loss, the portion of such Realized Loss
attributable to the reduction in the Principal Amount of the related Mortgage
Loan.
"Record Date": With respect to each Distribution Date, the
last Business Day of the month preceding the month in which such Distribution
Date occurs.
"Regular Certificates": The Class A-1, Class A-2, Class A-3,
Class A-4, Class B, Class C, Class D, Class E, Class F-1, Class F-2, Class G
and Class IO Certificates.
"Regulation D": Regulation D under the 1933 Act.
"Reimbursement Rate": With respect to any Advance made with
respect to a Group 2 Mortgage Loan or any P&I Advance made with respect to the
Group 1 Mortgage Loan, a per annum rate equal to the Prime Rate (as published
in The Wall Street Journal, or, if The Wall Street Journal is no longer
published, The New York Times, from time to time), and , with respect to any
Property Advance made with respect to the Group 1 Mortgage Loan, the higher of
(i) the daily prime rate as reported by the Federal Reserve Board in
Statistical Release H.15(519) as most recently available on the date of each
such Property Advance and (ii) a per annum rate equal to the Prime Rate (as
published in The Wall Street Journal, or, if The Wall Street Journal is no
longer published, The New York Times, from time to time).
"Remaining Cash Flow": For any Mortgage Loan after its
Anticipated Repayment Date, the excess of principal payments collected thereon
over the scheduled principal payments thereon (but excluding amounts deemed to
be payments of Additional Interest that were previously added to the Principal
Amount of such Mortgage Loan).
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
47
"REMIC I": A segregated asset pool within the Trust Fund
consisting of the Mortgage Loans, collections thereon, any REO Property
acquired in respect thereof and amounts held from time to time in the
Collection Account, the REMIC I Distribution Account and the REO Account, if
established.
"REMIC I Distribution Account": The segregated account or
accounts created and maintained by the Trustee pursuant to Section 3.6(b),
which shall be entitled "LaSalle National Bank, as Trustee, in trust for
Holders of Commercial Mortgage Acceptance Corp. Commercial Mortgage
Pass-Through Certificates, Series 1997-ML1, REMIC I Distribution Account" and
which shall be an Eligible Account.
"REMIC I Interests": The interests designated as regular
interests in REMIC I, which shall consist of, with respect to each Mortgage
Loan or Separate Loan Advance, as the case may be, an interest having an
initial Certificate Balance equal to the Scheduled Principal Amount of the
related Mortgage Loan as of the Cut-off Date and a Pass-Through Rate equal to
the REMIC I Net Mortgage Rate of the related Mortgage Loan, and the
Transferable Servicing Interest.
"REMIC I Net Mortgage Rate": As to each REMIC I Interest
(other than the Transferable Servicing Interest), the Mortgage Rate for the
related Mortgage Loan or Separate Loan Advance, as the case may be, as of the
Cut-off Date less the applicable Servicing Fee Rate and Trustee Fee Rate
(without taking into account any modification of the Mortgage Rate after the
Cut-off Date or any increase in such Mortgage Rate, including any increase
resulting from any Additional Interest Rate); provided, however, that, with
respect to each REMIC I Interest for which interest is not computed based on a
year of 360 days and consisting of twelve 30-day months, the interest rate on
such REMIC I Interest shall be converted to an effective rate equal to (a) the
amount of interest that would have accrued in respect of such REMIC I Interest
at the Mortgage Rate for the related Mortgage Loan or Separate Loan Advance, as
the case may be, as of the Cut-off Date (without giving effect to any
modification of the Mortgage Rate after the Cut-off Date or any increase in
such Mortgage Rate, including any increase resulting from any Additional
Interest Rate), multiplied by twelve and expressed as a percentage of the
principal balance of the REMIC I Interest as of the preceding Distribution Date
(after giving effect to any distribution of principal made on such Distribution
Date) minus (b) the sum of the applicable Servicing Fee Rate and the Trustee
Fee Rate.
"REMIC II": The segregated pool of assets within the Trust
Fund consisting of the REMIC I Interests and such amounts as shall from time to
time be held in the REMIC II Distribution Account.
48
"REMIC II Distribution Account": The segregated account or
accounts created and maintained by the Trustee pursuant to Section 3.6(b),
which shall be entitled "LaSalle National Bank, as Trustee, in trust for
Holders of Commercial Mortgage Acceptance Corp. Commercial Mortgage
Pass-Through Certificates, Series 1997-ML1, REMIC II Distribution Account" and
which shall be an Eligible Account.
"REMIC II Interests": The Class A-1-II, Class A-2-II, Class
A-3- II, Class A-4-II, Class B-II, Class C-II, Class D-II, Class E-II, Class
F-1-II, Class F-2-II and Class G-II Interests.
"REMIC III": The segregated pool of assets within the Trust
Fund consisting of the REMIC II Interests and such amounts as shall from time
to time be held in the REMIC III Distribution Account.
"REMIC III Distribution Account": The segregated account or
accounts created and maintained by the Trustee pursuant to Section 3.6(b),
which shall be entitled "LaSalle National Bank, as Trustee, in trust for
Holders of Commercial Mortgage Acceptance Corp. Commercial Mortgage
Pass-Through Certificates, Series 1997-ML1, REMIC III Distribution Account" and
which shall be an Eligible Account.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits, which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations (including any applicable proposed regulations) and
rulings promulgated thereunder, as the foregoing may be in effect from time to
time.
"REMICs": REMIC I, REMIC II and REMIC III.
"Remittance Date": The Business Day preceding each
Distribution Date.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code.
"REO Account": As defined in Section 3.19(b).
"REO Mortgage Loan": Any Mortgage Loan as to which the
related Mortgaged Property has become an REO Property. An REO Mortgage Loan
shall be treated, for purposes of making calculations hereunder, as a
continuation of the related Mortgage Loan.
49
"REO Proceeds": With respect to any REO Property and the
related REO Mortgage Loan, all revenues received by the applicable Special
Servicer with respect to such REO Property or REO Mortgage Loan that do not
constitute Liquidation Proceeds.
"REO Property": A Mortgaged Property title to which has been
acquired by the applicable Special Servicer on behalf of the Trust Fund through
foreclosure, deed in lieu of foreclosure or otherwise.
"REO Tax": As defined in Section 3.19(d)(i).
"REO Revenues": All income, rents, profits and proceeds
derived from the ownership, operation or leasing of any REO Property.
"Repurchase Price": With respect to any Mortgage Loan to be
repurchased pursuant to Section 2.3(d) or 2.3(e) or any Specially Serviced
Mortgage Loan or any REO Property to be sold or repurchased pursuant to Section
3.20, an amount, calculated by the Master Servicer equal to:
(i) The unpaid Principal Amount of such Mortgage Loan
(or, in the case of any REO Property, the related
REO Mortgage Loan) as of the Due Date as to which a
payment was last made by the related Borrower; plus
(ii) Unpaid interest accrued on such Mortgage Loan or REO
Mortgage Loan, as applicable, at the related
Mortgage Rate to, but not including, the Due Date in
the month following the month in which the purchase
or repurchase occurs; plus
(iii) Any unreimbursed Property Advances, all accrued and
unpaid interest on Advances (including P&I Advances)
at the Reimbursement Rate, any unpaid Servicing
Compensation (other than Servicing Fees) and any
unpaid or unreimbursed expenses of the Trust Fund
allocable to such Mortgage Loan or REO Mortgage
Loan, as applicable; plus
(iv) In the event that such Mortgage Loan or REO Mortgage
Loan, as applicable, is required to be repurchased
pursuant to Section 2.3(d) or 2.3(e), expenses
reasonably incurred or to be incurred by the Master
Servicer, any Special Servicer or the Trustee in
50
respect of the breach or defect giving rise to the
repurchase obligation, including any expenses
arising out of the enforcement of the repurchase
obligation.
"Request for Release": A request for release signed by a
Servicing Officer, substantially in the form of Exhibit E hereto.
"Required Appraisal Mortgage Loan": Each Mortgage Loan (i)
that is sixty or more days delinquent in respect of any Monthly Payments, (ii)
that becomes an REO Mortgage Loan, (iii) that has been modified by the
applicable Special Servicer to reduce the amount of any Monthly Payment (other
than a Balloon Payment), (iv) with respect to which a receiver is appointed and
continues in such capacity, (v) with respect to which the Borrower is subject
to any bankruptcy proceeding or (vi) with respect to which a Balloon Payment is
not made on its scheduled Due Date; provided, however, that a Mortgage Loan
shall cease to be a Required Appraisal Mortgage Loan upon its becoming a
Corrected Mortgage Loan.
"Reserve Accounts": With respect to any Mortgage Loan,
reserve, defeasance or escrow accounts, if any, established pursuant to the
related Mortgage Loan Documents and any Escrow Account.
"Responsible Officer": Any officer of the Asset-Backed Trust
Services Department of the Trustee (and, in the event that the Trustee is the
Certificate Registrar or the Paying Agent, an officer of the Certificate
Registrar or the Paying Agent, as applicable) assigned to the Corporate Trust
Office with direct responsibility for the administration of this Agreement and
also, with respect to a particular matter, any other officer or any employee
with responsibilities similar to those of an officer of the Asset-Backed Trust
Services Department of the Trustee to whom such matter is referred because of
such officer's or employee's knowledge of and familiarity with the particular
subject, and, in the case of any certification required to be signed by a
Responsible Officer, such an officer or employee whose name and specimen
signature appears on a list of corporate trust officers and employees furnished
to the Master Servicer by the Trustee, as such list may from time to time be
amended.
"Retained Servicing Interest": For any Distribution Date and
each Mortgage Loan (or Separate Loan Advance), the Servicing Fee payable in
respect of such Distribution Date less the Transferable Servicing Interest for
such Distribution Date.
"Rule 144A": Rule 144A, under the 1933 Act.
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"Scheduled Final Distribution Date": With respect to any
Class of Certificates, the Distribution Date on which the aggregate Certificate
Balance or aggregate Notional Amount, as the case may be, of such Class of
Certificates would be reduced to zero based on the assumptions set forth below.
Such Distribution Date shall in each case be as follows:
SCHEDULED
CLASS DESIGNATION FINAL DISTRIBUTION DATE
----------------- -----------------------
Class A-1................................................. November 15, 2004
Class A-2................................................. June 15, 2007
Class A-3................................................. October 15, 2007
Class A-4................................................. August 15, 2007
Class IO.................................................. November 15, 2017
Class B................................................... December 15, 2007
Class C................................................... December 15, 2007
Class D................................................... December 15, 2010
Class E................................................... November 15, 2012
Class F-1................................................. November 15, 2017
Class F-2................................................. November 15, 2017
Class G................................................... November 15, 2017
The Scheduled Final Distribution Dates set forth above were
calculated without regard to any delays in the collection of Balloon Payments,
without regard to a reasonable liquidation time with respect to any Mortgage
Loans that may be delinquent and using the Prepayment Assumption.
"Scheduled Principal Amount": With respect to any Mortgage
Loan or Separate Loan Advance, as of any Due Date, the principal balance of
such Mortgage Loan as of such Due Date, after giving effect to (a) any
Principal Prepayments or other unscheduled recoveries of principal and any
Balloon Payments received during the related Collection Period, and (b) any
payment in respect of principal, if any, due on or before such Due Date (other
than a Balloon Payment, but including the principal portion of any Assumed
Monthly Payment, if applicable), irrespective of any delinquency in payment by
the Borrower. The Scheduled Principal Amount of any REO Mortgage Loan as of any
Due Date is equal to the principal balance thereof outstanding on the date that
the related Mortgaged Property became an REO Property minus any Net REO
Proceeds allocated to principal on such REO Mortgage Loan and reduced by the
principal component of Monthly Payments due thereon on or before such Due Date.
With respect to any Mortgage Loan, from and after the date on which
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the Master Servicer makes a Final Recovery Determination, the Scheduled
Principal Amount thereof shall be zero.
"Securities Depository": The Depository Trust Company, or any
successor Securities Depository hereafter named. The nominee of the initial
Securities Depository, for purposes of registering those Certificates that are
to be Book-Entry Certificates, is Cede & Co. The Securities Depository shall at
all times be a "clearing corporation" as defined in Section 8-102(3) of the
Uniform Commercial Code of the State of New York and a "clearing agency"
registered pursuant to the provisions of Section 17A of the 1934 Act and which
operates a book-entry system within the definition of Section 163(f) of the
Code.
"Securities Depository Participant": A broker, dealer, bank
or other financial institution or other Person for whom from time to time the
Securities Depository effects book-entry transfers and pledges of securities
deposited with the Securities Depository.
"Securities Legend": With respect to each Residual
Certificate and any Definitive Certificate (other than a Residual Certificate)
that is a Privately Placed Certificate the legend set forth in, and
substantially in the form of, Exhibit H hereto.
"Senior Certificates": The Class A-1, Class A-2, Class A-3,
Class A-4 and Class IO Certificates.
"Separate Loan Advance": Any advance of Mortgage Loan
proceeds to a Borrower that bears interest at a different rate or that has a
different maturity date than other portions of such Mortgage Loan and that is
indicated as such on the Mortgage Loan Schedule. Collections allocable to
principal on each Mortgage Loan having a Separate Loan Advance shall be applied
in accordance with the terms of the Mortgage Loan or, if the Mortgage Loan does
not specify such an allocation, shall be applied pro rata among the related
Separate Loan Advances based on the relative Principal Amounts thereof.
"Servicing Compensation": With respect to each Mortgage Loan,
the Servicing Fee and the Special Servicing Fee which shall be due to the
Master Servicer and the applicable Special Servicer, as applicable, and such
other compensation of the Master Servicer and the applicable Special Servicer
specified in Section 3.14.
"Servicing Fee": With respect to each Mortgage Loan (or
Separate Loan Advance) and for any Distribution Date, an amount per calendar
month equal to
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the product of (i) one-twelfth of the related Servicing Fee Rate
and (ii) the Scheduled Principal Amount of such Mortgage Loan (which shall not
include the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note or the ▇▇▇▇▇▇ Class B Note) as of
the Due Date in the month preceding the month in which such Distribution Date
occurs.
"Servicing Fee Rate": With respect to each Mortgage Loan, the
per annum rate set forth in the Mortgage Loan Schedule.
"Servicing Officer": Any officer or employee of the Master
Servicer or a Special Servicer involved in, or responsible for, the
administration and servicing of the Mortgage Loans or this Agreement and also,
with respect to a particular matter, any other officer or employee to whom such
matter is referred because of such officer's or employee's knowledge of and
familiarity with the particular subject, and, in the case of any certification
required to be signed by a Servicing Officer, such an officer or employee whose
name and specimen signature appears on a list of servicing officers furnished
to the Trustee by the Master Servicer or a Special Servicer, as applicable, as
such list may from time to time be amended, together with, in the case of a
certificate or other writing executed by an employee who constitutes a
Servicing Officer because of such employee's knowledge and familiarity with a
particular subject, a countersignature of an officer of, or an officer of the
general partner of, the Master Servicer or a Special Servicer, as appropriate.
"Servicing Standard": The Group 1 Servicing Standard or the
Group 2 Servicing Standard, as applicable.
"Shilo Inn Loan": The Mortgage Loan and Separate Loan Advance
bearing Loan Numbers 11 and 12 on the Mortgage Loan Schedule.
"Similar Law": As defined in Section 5.2(i).
"Special Reporting and Inspection Fee": With respect to any
Group 2 Mortgage Loan and for any Distribution Date, an amount per calendar
month equal to the product of one-twelfth of the Special Reporting and
Inspection Fee Rate and (ii) the Principal Amount of such Group 2 Mortgage Loan
as of the Due Date in the month preceding the month in which such Distribution
Date occurs.
"Special Reporting and Inspection Fee Rate": A rate equal to
.010%
"Special Servicer": The Group 1 Special Servicer, the Group 2
Special Servicer or the NOM Special Servicer, as applicable.
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"Special Servicing Fee": With respect to any Specially
Serviced Mortgage Loan or REO Mortgage Loan (other than the Group 1 Mortgage
Loan) and for any Distribution Date, an amount per calendar month equal to the
product of (i) one-twelfth of the Group 2 Special Servicing Fee Rate and (ii)
the Scheduled Principal Amount of such Specially Serviced Mortgage Loan or REO
Mortgage Loan, as applicable, as of the Due Date in the month preceding the
month in which such Distribution Date occurs. With respect to the Group 1
Mortgage Loan if it is a Specially Serviced Mortgage Loan or a REO Mortgage
Loan and for any Distribution Date, an amount per calendar month equal to the
product of (i) one-twelfth of the Group 1 Special Servicing Fee Rate and (ii)
the Scheduled Principal Amount of such Specially Serviced Mortgage Loan or REO
Mortgage Loan, as applicable, as of the Due Date in the month preceding the
month in which such Distribution Date occurs.
"Specially Serviced Mortgage Loan": Any Group 2 Mortgage Loan
with respect to which:
(i) any Monthly Payment shall be delinquent 45 or more
days;
(ii) the Balloon Payment, if any, shall be delinquent 45
or more days (or, if the Master Servicer determines
that the related Borrower has obtained a commitment
to refinance, for such longer period of delinquency
(not to exceed 120 days) within which such
refinancing is expected to occur);
(iii) the Master Servicer determines that a default in
making a Monthly Payment is likely to occur within
30 days and is likely to remain unremedied for 45 or
more days (or, in the case of a Balloon Payment, if
the Master Servicer determines that the related
Borrower has obtained a commitment to refinance, for
such longer period of delinquency (not to exceed 120
days) within which such refinancing is expected to
occur);
(iv) a default, of which the Master Servicer has notice
(other than a default described in (i) above) and
which in the judgment of the Master Servicer
materially impairs the value of the related
Mortgaged Property as security for the Mortgage Loan
or otherwise materially and adversely affects the
interests of the Certificateholders, has occurred
and remained unremedied for the applicable grace
period specified in such Mortgage Loan (or, if no
grace period is specified, 30 days);
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(v) the Master Servicer has received notice that a
decree or order under any bankruptcy, insolvency or
similar law shall have been entered against the
related Borrower and such decree or order shall have
remained in force, undischarged or unstayed for a
period of 60 days;
(vi) the Master Servicer has received notice that the
related Borrower shall have consented to the
appointment of a conservator or receiver or
liquidator in any insolvency or similar proceedings
of or relating to such Borrower or of or related to
all or substantially all of its property;
(vii) the Master Servicer has received notice that the
related Borrower shall have admitted in writing the
inability to pay its debts as they come due, filed a
petition to take advantage of any applicable
insolvency or reorganization statute, made an
assignment for the benefit of creditors or
voluntarily suspended payment of its obligations;
(viii) the Master Servicer has received notice of the
commencement of foreclosure or similar proceedings
with respect to the related Mortgaged Property; or
(ix) the Borrower shall be materially delinquent with
respect to payment of insurance premiums or property
taxes, including the making of escrow payments for
the payment of such premiums or payments.
provided, however, that a Group 2 Mortgage Loan will cease to be a Specially
Serviced Mortgage Loan:
(a) with respect to the circumstances described
in clause (i) or (ii) of this sentence,
when the related Borrower 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
Borrower or by reason of a modification,
waiver or amendment granted or agreed to by
the Special Servicer);
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(b) with respect to any of the circumstances
described in clauses (iii), (v), (vi) and
(vii) of this sentence, when such
circumstances cease to exist in the good
faith, reasonable judgment of the Special
Servicer, but, with respect to any
bankruptcy or insolvency proceedings
described in clauses (v), (vi) and (vii),
no later than the entry of an order or
decree dismissing such proceeding;
(c) with respect to the circumstances described
in clause (iv) and (ix) of this sentence,
when such default is cured; and
(d) with respect to the circumstances described
in clause (viii) of this sentence, when
such proceedings are terminated;
provided, however, that at the time no circumstance identified in clauses (i)
through (ix) of this sentence exists that would cause the Group 2 Mortgage Loan
to continue to be characterized as a Specially Serviced Mortgage Loan.
The Group 1 Mortgage Loan shall constitute a Specially
Serviced Mortgage Loan in the event that:
(i) the Group 1 Mortgage Loan is accelerated;
(ii) the date on which any payment under the
related Notes or any other document related
thereto shall have been delinquent for
sixty days;
(iii) the date on which any payment due on the
final maturity date of such Group 1
Mortgage Loan in accordance with the
related Notes (or either of them) first
becomes delinquent; and
(iv) the date on which an Event of Default (as
defined in the Mortgage related to the
Group 1 Mortgage Loan) under Section
2.01(c) of such Mortgage occurs;
provided, however, that the Group 1 Mortgage Loan will cease to be a Specially
Serviced Mortgage Loan:
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(a) with respect to the circumstances described
in clause (i) of this sentence, when such
proceedings are terminated;
(b) with respect to the circumstances described
in clause (ii) of this sentence, when the
related Borrower has paid in full all
payments due under the related Notes or any
other document related thereto and 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 Borrower or by reason
of a modification, waiver or amendment
granted or agreed to by the Group 1 Special
Servicer); and
(c) with respect to the circumstances described
in clauses (iii) and (iv) of this sentence,
when such default is cured;
provided, however, that at the time no circumstance identified in clauses (i)
through (iv) of this sentence exists that would cause the Group 1 Mortgage Loan
to continue to be characterized as a Specially Serviced Mortgage Loan.
"Stated Principal Balance": For any Mortgage Loan, the
Principal Amount thereof as of the Cut-off Date, as reduced on each
Distribution Date (to not less than zero) by (i) all payments (or Advances in
lieu thereof) and other collections of principal of such Mortgage Loan that are
distributed to the 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, if a Liquidation
occurs in respect of such Mortgage Loan, 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 occurs.
"Startup Day": The day designated as such pursuant to Section
2.6(a).
"S&P": Standard and Poor's Ratings Service, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Subordinate Certificates": Any one or more of the Class B,
Class C, Class D, Class E, Class F-1, Class F-2, Class G, Class R-I, Class R-II
and Class R-III Certificates.
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"Tax Returns": The federal income tax return on IRS Form
1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including
Schedule Q thereto, Quarterly Notice to Residual Interest Holders of REMIC
Taxable Income or Net Loss Allocation, or any successor forms, to be filed on
behalf of each of REMIC I, REMIC II and REMIC III under the REMIC Provisions,
together with any and all other information, reports or returns that
may be required to be furnished to the Certificateholders or filed with the IRS
or any other governmental taxing authority under any applicable provisions of
federal, state or local tax laws.
"Termination Date": The Distribution Date on which the Trust
Fund is terminated pursuant to Section 9.1.
"Transfer": Any direct or indirect transfer or other form of
assignment of any Ownership Interest in a Class R-I, Class R-II or Class R-III
Certificate.
"Transferable Servicing Interest": For any Distribution Date,
the sum, for each Mortgage Loan, of the Servicing Fee payable on such
Distribution Date less an amount equal to the sum of (i) the product of (A)
one-twelfth of 0.010% and (B) the Scheduled Principal Amount of the Group 1
Mortgage Loan as of the Due Date in the month preceding the month in which such
Distribution Date occurs, (ii) the product of (A) one-twelfth of 0.060% and (B)
the Scheduled Principal Amount of the Shilo Inn Loan as of the Due Date in the
month preceding the month in which such Distribution Date occurs, (iii) the
product of (A) one-twelfth of 0.070% and (B) the Scheduled Principal Amount of
the Farb Loan, (iv) zero, in the case of each Group 2 Mortgage Loan other than
the Shilo Inn Loan and the Farb Loan and (v) the Special Reporting and
Inspection Fee payable for such Distribution Date; provided, however, that, in
the event that (x) Midland Loan Services, L.P. shall resign or be removed as
Master Servicer hereunder and (y) the Trustee shall determine that no successor
Master Servicer meeting the requirements set forth in Section 6.4 is willing to
accept an appointment as successor Master Servicer if the servicing
compensation payable to it is limited to the Retained Servicing Interest, the
payment of the Transferable Servicing Interest shall be subordinated to, and
reduced by, payment of the fee payable to the successor Master Servicer. An
election will be made to treat the Transferable Servicing Interest as a regular
interest in REMIC I.
"Transferee Affidavit": As defined in Section 5.2(j)(ii).
"Transferor Letter": As defined in Section 5.2(j)(ii).
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"Trust Fund": The corpus of the trust created hereby and to
be administered hereunder, consisting of: (i) such Mortgage Loans as from time
to time are subject to this Agreement, together with the Mortgage Files
relating thereto; (ii) all payments on or collections in respect of such
Mortgage Loans due after the Cut-off Date; (iii) any REO Property; (iv) all
revenues received in respect of REO Property; (v) the Master Servicer's, the
Special Servicers' and the Trustee's rights under the insurance policies with
respect to such Mortgage Loans required to be maintained pursuant to this
Agreement and any proceeds thereof; (vi) any Assignments of Leases, Rents and
Profits, and any security agreements and pledges; (vii) any indemnities or
guaranties given as additional security for such Mortgage Loans; (viii) the
Trustee's right, title and interest in and to the Reserve Accounts; (ix) the
Collection Account; (x) the Distribution Accounts and the REO Account,
including reinvestment income, if any, thereon; (xi) any environmental
indemnity agreements relating to such Mortgaged Properties; (xii) the rights
and remedies of the Depositor under the Mortgage Loan Purchase and Sale
Agreement (other than the right to recovery of certain transaction expenses,
including certain estimated expenses, and the right to receive certain
indemnification payments as set forth in Sections 1 and 5, respectively, of
the Mortgage Loan Purchase and Sale Agreement, (xiii) the rights and remedies
of the Depositor under the ▇▇▇▇▇▇ Servicing Agreement and (xiv) any proceeds
of the foregoing.
"Trustee": LaSalle National Bank, in its capacity as trustee,
or its successor in interest, or any successor trustee appointed as herein
provided.
"Trustee Fee": With respect to each Mortgage Loan (or
Separate Loan Advance) and for any Distribution Date, an amount per calendar
month equal to the product of (i) one-twelfth of the Trustee Fee Rate and (ii)
the Scheduled Principal Amount of such Mortgage Loan as of the Due Date in the
month preceding the month in which such Distribution Date occurs.
"Trustee Fee Rate": A rate equal to 0.005%.
"Trustee Mortgage File": With respect to any Mortgage Loan,
the mortgage documents listed in Section 2.1(i) through (xiii) pertaining to
such Mortgage Loan, the documents listed in the third paragraph of Section 2.1
and any additional documents required to be deposited with the Trustee pursuant
to the express provisions of this Agreement.
"Updated Appraisal": With respect to each Required Appraisal
Mortgage Loan, an Independent appraisal, prepared in accordance with 12 CFR
60
ss.225.62 and conducted in accordance with the standards of the Appraisal
Institute, of the related Mortgaged Property from an Independent professional
real estate appraiser selected by the applicable Special Servicer and who is a
member in good standing of the Appraisal Institute and, if the State in which
the related Mortgaged Property is located, certifies or licenses appraisers,
certified or licensed in such State, and in each case, who has a minimum of
five years' experience in the applicable property type and market; provided,
however, in the case of an Independent appraiser in respect of the Mortgaged
Property securing the NOM Loan, such appraiser shall be selected by the Master
Servicer with the consent of the NOM Special Servicer (which consent shall not
be unreasonably withheld), and the Master Servicer shall give instructions to
such appraiser (after consultation with the NOM Special Servicer) with respect
to the manner in which the appraisal is to be conducted (but giving effect to
the standards of the Appraisal Institute).
"Voting Right": The portion of the voting rights of all of
the Certificates that is allocated to any Certificate or Class of Certificates.
At all times during the term of this Agreement, the percentage of the Voting
Rights assigned to each Class shall be (a) 0%, in the case of the Class IO,
Class R-I, Class R-II and Class R-III Certificates, (b) in the case of any of
the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-3, Class A-4, Class B, Class C, Class D,
Class E, Class F-1, Class F-2 and Class G Certificates, a fraction (expressed
as a percentage), the numerator of which is equal to the aggregate outstanding
Certificate Balance of such Class of Certificates and the denominator of which
is equal to the aggregate outstanding Certificate Balances of all such Classes
of Certificates. The Voting Rights of any Class of Certificates shall be
allocated among Holders of Certificates of such Class in proportion to their
respective Percentage Interests. The aggregate Voting Rights of Holders of more
than one Class of Certificates shall be equal to the sum of the products of
each such Holder's Voting Rights and the percentage of Voting Rights allocated
to the related Class of Certificates. Interests in REMIC I and REMIC II shall
be voted by the Trustee in the same proportion and manner as the Certificates.
SECTION 1.2. Certain Calculations.
Unless otherwise specified herein, the following provisions
shall apply:
(a) All calculations of interest (excluding interest on the
Mortgage Loans, which shall be calculated pursuant to the related Mortgage Loan
Documents) provided for herein shall be made on the basis of a 360-day year
consisting of twelve 30-day months.
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(b) The portion of any Insurance Proceeds, Condemnation
Proceeds, Liquidation Proceeds or Net REO Proceeds in respect of a Mortgage
Loan allocable to principal and Prepayment Premiums shall be determined
consistently with the definition of "Liquidation Realized Loss" and
accordingly, shall be net of first, any portion thereof payable as Servicing
Fees, Special Servicing Fees, Trustee Fees and reimbursements of Advances (and
Advance Interest Amounts with respect thereto) to the Master Servicer, the
applicable Special Servicer, the Trustee or the Fiscal Agent pursuant to the
provisions of this Agreement or other expenses attributable to such Mortgage
Loan; second, any portion thereof equal to interest on the unpaid principal
balance (net of any Additional Interest added thereto) of such Mortgage Loan at
the related Net Mortgage Rate from the Due Date as to which interest was last
paid by the related Borrower up to but not including the Due Date in the
Collection Period in which such proceeds are received (without duplication of
any amount paid to the Master Servicer, Trustee or Fiscal Agent pursuant to
clause first in reimbursement of advances of such accrued interest). Allocation
of such amount between principal and Prepayment Premium shall be made first to
principal and second to Prepayment Premium.
(c) For purposes of any calculation hereunder, Additional
Interest shall be deemed not to have accrued or been included in principal in
respect of any Mortgage Loan, but, if actually collected shall be included in
the calculation of the applicable Available Distribution Amount.
SECTION 1.3. Certain Constructions.
Unless the context clearly indicates otherwise, references to
section numbers are to sections of this Agreement.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.1. Conveyance and Assignment of Mortgage
Loans.
The Depositor, concurrently with the execution and delivery
hereof, does hereby establish a trust and does hereby sell, transfer, assign,
set over and otherwise convey to the Trustee as trustee of such trust without
recourse (except to the extent herein provided) all the right, title and
interest of the Depositor in and to the
63
Mortgage Loans, including all rights to payment in respect thereof, except as
set forth below, and any security interest thereunder (whether in real or
personal property and whether tangible or intangible) in favor of the
Depositor, and all other assets included or to be included in the Trust Fund
for the benefit of the Certificateholders. Such conveyance expressly excludes
any obligation whatsoever to fund the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note, which
obligation has been retained by the Mortgage Loan Seller. Such transfer and
assignment includes all scheduled payments of interest and principal due after
the Cut-off Date (whether or not received) and all payments of interest and
principal received by the Depositor or the Master Servicer on or with respect
to the Mortgage Loans (excluding the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note and the
▇▇▇▇▇▇ Class B Note) after the Cut-off Date, other than any such payments of
interest or principal which were due on or prior to the Cut-off Date. The
Depositor, concurrently with the execution and delivery hereof, does also
hereby sell, transfer, assign, set over and otherwise convey to the Trustee
without recourse (except to the extent provided herein) all the right, title
and interest of the Depositor in, to and under the Mortgage Loan Purchase and
Sale Agreement (other than the right to recovery of certain transaction
expenses, including certain estimated expenses, and the right to receive
certain indemnification payments as set forth in Sections 1 and 5,
respectively, of the Mortgage Loan Purchase and Sale Agreement. The Depositor
(to the extent such Reserve Funds are transferred to the Depositor by the
Mortgage Loan Seller in compliance with the Mortgage Loan Purchase and Sale
Agreement) shall cause the Reserve Accounts to be transferred to and held in
the name of the Master Servicer on behalf of the Trustee as successor to the
Mortgage Loan Seller.
In connection with the transfer and assignment of its right,
title and interest in the Mortgage Loans, the Depositor does hereby deliver to,
and deposit with, the Trustee, with a copy to the Master Servicer and the
applicable Special Servicer, the following documents or instruments with
respect to each such Mortgage Loan (except that, with respect to the Group 1
Mortgage Loan, only the documents referenced in clauses (i), (xiv) and (xv)
will be in the form of originals):
(i) the original of the related Note, endorsed by the
Mortgage Loan Seller in blank in the following form:
"Pay to the order of ________________, without
recourse" which the Trustee or its designee is
authorized to complete and which Note and all
endorsements thereof shall show a complete
chain of endorsement from the Originator to the
Mortgage Loan Seller;
(ii) the related original recorded Mortgage or a copy
thereof certified by the related title insurance
company, public recording
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office or closing agent to be in the form in which
executed and submitted for recording, the related
original recorded Assignment of Mortgage to the
Mortgage Loan Seller or a copy thereof certified by
the related title insurance company, public
recording office or closing agent to be in the form
in which executed and submitted for recording and
the related original Assignment of Mortgage executed
by the Mortgage Loan Seller in blank which the
Trustee or its designee is authorized to complete
(and but for the insertion of the name of the
assignee and any related recording information which
is not yet available to the Mortgage Loan Seller, is
in suitable form for recordation in the jurisdiction
in which the related Mortgaged Property is located);
(iii) if the related security agreement is separate from
the Mortgage, the original security agreement or a
counterpart thereof, and if the security agreement
is not assigned under the Assignments of Mortgage
described in clause (ii) above, the related original
assignment of such security agreement to the
Mortgage Loan Seller or a counterpart thereof and
the related original assignment of such security
agreement executed by the Mortgage Loan Seller in
blank which the Trustee or its designee is
authorized to complete;
(iv) a copy of each Form UCC-1 financing statement, if
any, filed with respect to personal property
constituting a part of the related Mortgaged
Property, together with a copy of each Form UCC-2 or
UCC-3 assignment to the Mortgage Loan Seller filed
with respect to any such financing statement and a
copy of each Form UCC-2 or UCC-3 assignment of any
such financing statement executed by the Mortgage
Loan Seller in blank which the Trustee or its
designee is authorized to complete (and but for the
insertion of the name of the assignee and any
related filing information which is
not yet available to the Mortgage Loan Seller, is in
suitable form for filing in the filing office in
which such financing statement was filed);
(v) the related original of the Loan Agreement, if any,
relating to such Mortgage Loan or a counterpart
thereof;
64
(vi) the related original lender's title insurance
policy, together with any endorsements or riders
thereto that were issued with or subsequent to the
issuance of such policy;
(vii) if any related Assignment of Leases, Rents and
Profits is separate from the Mortgage, the original
recorded Assignment of Leases, Rents and Profits or
a copy thereof certified by the related title
insurance company, public recording office or
closing agent to be in the form in which executed
and submitted for recording, the related original
recorded reassignment of such instrument, if any, to
the Mortgage Loan Seller or a copy thereof certified
by the related title insurance company, public
recording office or closing agent to be in the form
in which executed and submitted for recording and
the related original reassignment of such
instrument, if any, executed by the Mortgage Loan
Seller in blank which the Trustee or its designee is
authorized to complete (and but for the insertion of
the name of the assignee and any related recording
information which is not yet available to the
Mortgage Loan Seller, is in suitable form for
recordation in the jurisdiction in which the related
Mortgaged Property is located) (any of which
reassignments, however, may be included in a related
Assignment of Mortgage and need not be a separate
instrument);
(viii) copies of the original Environmental Reports with
respect to the Mortgaged Property;
(ix) if any related assignment of contracts is separate
from the Mortgage, the original assignment of
contracts or a counterpart thereof, and if the
assignment of contracts is not assigned under the
Assignments of Mortgage described in clause (ii)
above, the related original reassignment of such
instrument to the Mortgage Loan Seller or a
counterpart thereof and the related original
reassignment of such instrument executed by the
Mortgage Loan Seller in blank which the Trustee or
its designee is authorized to complete;
(x) with respect to the related Reserve Accounts, if
any, a copy of the original of any separate
agreement with respect thereto between the related
Borrower and the Originator (and, if the
65
Mortgage Loan Seller is not the Originator, together
with assignments from the Originator to the Mortgage
Loan Seller and from the Mortgage Loan Seller to the
Trustee of the agreement);
(xi) the original of any other written agreement,
instrument or document securing such Mortgage Loan,
including, without limitation, originals of any
guaranties with respect to such Mortgage Loan or the
original letter of credit, if any, with respect
thereto, together with any and all amendments
thereto, including, without limitation, any
amendment which entitles the Master Servicer to draw
upon such letter of credit on behalf of the Trustee
for the benefit of the Certificateholders, and the
original of each instrument or other item of
personal property given as security for a Mortgage
Loan possession of which by a secured party is
necessary to a secured party's valid, perfected,
first priority security interest therein, together
with all assignments or endorsements thereof
necessary to entitle the Master Servicer to enforce
a valid, perfected, first priority security interest
therein on behalf of the Trustee for the benefit of
the Certificateholders;
(xii) with respect to the related Reserve Accounts, if
any, a copy of the UCC-1 financing statements, if
any, submitted for filing with respect to the
security interest of the applicable Originator in
such Reserve Accounts and all funds contained
therein, together with a copy of each Form UCC-2 or
UCC-3 assignment to the Mortgage Loan Seller filed
with respect to such financing statement and a copy
of each Form UCC-2 or UCC-3 assignment of such
financing statement executed by the Mortgage Loan
Seller in blank which the Trustee or its designee
is authorized to complete (and but for the insertion
of the name of the assignee and any related filing
information which is not yet available to the
Mortgage Loan Seller is in suitable form for filing
in the filing office in which such financing
statement was filed); and
(xiii) the original of each assumption or substitution
agreement, if any, with evidence of recording
thereon, where appropriate (or a copy thereof
certified by the related title insurance company,
66
public recording office or closing agent to be in
the form in which executed or submitted for
recording);
(xiv) with respect to the Group 1 Mortgage Loan only, the
original of the ▇▇▇▇▇▇ Servicing Agreement, together
with the original assignment thereof by the Mortgage
Loan Seller to the Depositor;
(xv) with respect to the Group 1 Mortgage Loan only, the
original assignment of the ▇▇▇▇▇▇ Servicing
Agreement by the Depositor to the Trustee;`
(xvi) with respect to the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan only, an
original counterpart of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Intercreditor Agreement; and
(xvii) originals or copies of any and all amendments,
modifications and supplements to, and waivers
related to, any of the foregoing.
On or promptly following the Closing Date, the Trustee or
Custodian, as applicable, shall, to the extent possession thereof has been
delivered to it, complete any Assignment of Mortgage delivered pursuant to
clause (ii) above, any assignment of security agreement delivered pursuant to
clause (iii) above, any Form UCC-2 or UCC-3 assignment delivered pursuant to
clause (iv) and (xii) above, any reassignment of Assignment of Leases, Rents
and Profits delivered pursuant to clause (vii) above and any reassignment of
assignment of contracts delivered pursuant to clause (ix) above, in each case,
by inserting the name of the Trustee as assignee and delivering to the Master
Servicer (1) for recordation, (a) each Assignment of Mortgage referred to in
Section 2.1(ii) which has not yet been submitted for recordation and (b) each
reassignment of Assignment of Leases, Rents and Profits referred to in Section
2.1(vii) (if not otherwise included in the related Assignment of Mortgage)
which has not yet been submitted for recordation; and (2) for filing, each
UCC-2 or UCC-3 financing statement assignment referred to in Section 2.1(iv)
and (xii) which has not yet been submitted for filing. On or promptly following
the Closing Date, the Trustee or Custodian, as applicable, shall, to the extent
possession thereof has been delivered to it, complete the endorsement of the
Note by inserting the name of the Trustee as endorsee. The Master Servicer
shall, upon receipt, promptly submit for recording or filing, as the case may
be, in the appropriate public recording or filing office, each such document
(other than the Notes) at the expense of the Mortgage Loan Seller. In the event
that any such document is lost or returned unrecorded because of a defect
67
therein, the Master Servicer shall use its best efforts to promptly prepare a
substitute document for signature by the Depositor or the Mortgage Loan Seller,
as applicable, and thereafter the Master Servicer shall cause each such
document to be duly recorded at the expense of the Mortgage Loan Seller. The
Master Servicer shall, promptly upon receipt of the original of each such
recorded document, deliver such original to the Custodian. Notwithstanding
anything to the contrary contained in this Section 2.1, in those instances
where the public recording office retains the original Assignment of Mortgage
or reassignment of Assignment of Leases, Rents and Profits, if applicable,
after any such document has been recorded, the obligations hereunder of the
Depositor shall be deemed to have been satisfied upon delivery to the Custodian
of a copy of such Assignment of Mortgage or reassignment of Assignment of
Leases, Rents and Profits, if applicable, certified by the public recording
office to be a true and complete copy of the recorded original thereof. If a
pro forma title insurance policy has been delivered to the Custodian in lieu of
an original title insurance policy, the Depositor or the Master Servicer will
promptly deliver to the Custodian the related original title insurance policy
upon receipt thereof. The Depositor shall promptly cause the UCC-1s, UCC-2s and
UCC-3s referred to in Section 2.1(iv) and (xii) to be filed by the Master
Servicer in the applicable public recording or filing office at the expense of
the Mortgage Loan Seller and upon filing will promptly deliver to the Custodian
the related UCC-1, UCC-2 or UCC-3 with evidence of filing thereon.
All original documents relating to the Mortgage Loans which
are not delivered to the Custodian are and shall be held by the Trustee or the
Master Servicer, as the case may be, in trust for the benefit of the
Certificateholders. In the event that any such original document is required
pursuant to the terms of this Section to be a part of a Trustee Mortgage File,
such document shall be delivered promptly to the Custodian.
If the Depositor cannot deliver any original or certified
recorded document described in this Section 2.1 on the Closing Date, the
Depositor shall use its best efforts, promptly upon receipt thereof and in any
case not later than 45 days from the Closing Date, to deliver or cause to be
delivered such original or certified recorded documents to the Custodian
(unless the Depositor is delayed in making such delivery by reason of the fact
that such documents shall not have been returned by the appropriate recording
office, in which case the Depositor or the Master Servicer shall notify the
Custodian and the Trustee in writing of such delay and shall deliver such
documents to the Custodian promptly upon the Depositor's or the Master
Servicer's receipt thereof).
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In addition to the foregoing, the Master Servicer shall
deliver to the Trustee counterpart originals of each of the Initial
Sub-Servicing Agreements and, promptly after the execution thereof, any
amendment thereto.
SECTION 2.2. Acceptance by the Custodian and the
Trustee.
By its execution and delivery of this Agreement, the Trustee
acknowledges the assignment to it of the Mortgage Loans in good faith without
notice of adverse claims and declares that the Custodian holds and will hold
such documents and all others delivered to it constituting the Trustee Mortgage
File (to the extent the documents constituting the Trustee Mortgage File are
actually delivered to the Custodian) for any Mortgage Loan assigned to the
Trustee hereunder in trust, upon the conditions herein set forth, for the use
and benefit of all present and future Certificateholders. The Trustee agrees to
review each Trustee Mortgage File within 45 days after the later of (a) the
Trustee's receipt of such Trustee Mortgage File or (b) execution and delivery
of this Agreement, to ascertain that all documents referred to in Section 2.1
above and any original recorded documents referred to in the last sentence of
Section 2.1 to be included in the delivery of a Trustee Mortgage File, have
been received, have been executed, appear on their face to be what they purport
to be, purport to be recorded or filed (as applicable) and have not been torn,
mutilated or otherwise defaced, and that such documents relate to the Mortgage
Loans identified in the Mortgage Loan Schedule. In so doing, the Trustee may
rely on the purported due execution and genuineness of any such document and on
the purported genuineness of any signature thereon. If, at the conclusion of
such review, any document or documents constituting a part of a Trustee
Mortgage File have not been executed or received, have not been recorded or
filed (if required), are unrelated to the Mortgage Loans identified in the
Mortgage Loan Schedule, appear on their face not to be what they purport to be
or have been torn, mutilated or otherwise defaced, the Trustee shall promptly
so notify the Depositor and the Mortgage Loan Seller (with a copy to the Master
Servicer and each Special Servicer) by providing a written report, setting
forth, for each affected Mortgage Loan, with particularity, the nature of the
defective or missing document. Neither the Master Servicer, the Special
Servicers nor the Trustee shall be responsible for any loss, cost, damage or
expense to the Trust Fund resulting from any failure to receive any document
constituting a portion of a Trustee Mortgage File noted on such a report or for
any failure by the Depositor to use its best efforts to deliver any such
document, subject to Section 2.3(h) with respect to the Master Servicer.
In reviewing any Trustee Mortgage File pursuant to the
preceding paragraph or Section 2.1, the Trustee shall have no responsibility to
determine whether
69
any document or opinion is legal, valid, binding or enforceable, whether the
text of any assignment or endorsement is in proper or recordable form (except,
if applicable, to determine whether the Trustee is the assignee or endorsee),
whether any document has been recorded in accordance with the requirements of
any applicable jurisdiction, whether a blanket assignment is permitted in any
applicable jurisdiction, or whether any Person executing any document or
rendering any opinion is authorized to do so or whether any signature thereon
is genuine.
The Trustee shall hold that portion of the Trust Fund
delivered to the Trustee consisting of "instruments"(as such term is defined in
Section 9-105(i) of the Uniform Commercial Code as in effect in the State of
Illinois on the date hereof) in the State of Illinois and, except as set forth
in Section 3.13 or as otherwise specifically provided in this Agreement, shall
not remove such instruments from the State of Illinois unless it receives an
Opinion of Counsel (obtained and delivered at the expense of the Person
requesting the removal of such instruments from the State of Illinois) that in
the event the transfer of the Mortgage Loans to the Trustee is deemed not to be
a sale, after such removal, the Trustee will possess a first priority perfected
security interest in such instruments.
SECTION 2.3. Representations and Warranties of the
Depositor.
(a) The Depositor hereby represents and warrants as of
the Closing Date that:
(i) The Depositor is a corporation duly organized
validly existing and in good standing under the laws
of the State of Missouri;
(ii) The Depositor has taken all necessary action to
authorize the execution, delivery and performance of
this Agreement by it, and has the power and
authority to execute, deliver and perform this
Agreement and all the transactions contemplated
hereby, including, but not limited to, the power and
authority to sell, assign and transfer its right,
title and interest in the Mortgage Loans in
accordance with this Agreement;
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Depositor and assuming
the due authorization, execution and delivery of
this Agreement by each other party hereto, this
Agreement and all of the obligations of the
Depositor hereunder are the legal, valid and binding
70
obligations of the Depositor, enforceable in
accordance with the terms of this Agreement, except
as such enforcement may be limited by bankruptcy,
insolvency, reorganization, liquidation,
receivership, moratorium or other laws relating to
or affecting creditors' rights generally, or by
general principles of equity (regardless of whether
such enforceability is considered in a proceeding in
equity or at law);
(iv) The execution and delivery of this Agreement and the
performance of its obligations hereunder by the
Depositor will not conflict with any provision of
its articles of incorporation or bylaws, or any law,
governmental regulation, judgment, decree or order
to which the Depositor is subject, or conflict with,
result in a breach of or constitute a default under
(or an event which, with notice or lapse of time or
both, would constitute a default under) any of the
terms, conditions or provisions of any agreement or
instrument to which the Depositor is a party or by
which it is bound, or any order or decree applicable
to the Depositor, or result in the creation or
imposition of any lien on any of the Depositor's
assets or property which, with respect to any
of the above events, would materially and adversely
affect the ability of the Depositor to carry out its
obligations under this Agreement. The Depositor is
not in default in any material respect with respect
to any agreement to which the Depositor is a party.
The Depositor has obtained any consent, approval,
authorization or order of any court or governmental
agency or body required for the execution, delivery
and performance by the Depositor of this Agreement;
(v) The articles of incorporation of the Depositor
provide that the Depositor is permitted to engage in
only the following activities:
(A) To acquire, own, hold, sell, transfer,
assign, pledge, finance, refinance and
otherwise deal with (i) loans secured by
(x) first or second mortgages, deeds of
trust or similar liens on multi-family
residential, commercial or mixed commercial
and multi-family residential properties,
and (y) related assets, and (ii) any
participation interest in, security (in
bond or pass-
through form) or funding agreement based
on, backed or collateralized by, directly
or indirectly, any of the foregoing (the
loans and related assets described in
clause (A)(i) and the participation
interests, securities and funding
agreements described in clause (A)(ii),
collectively, "Permitted Mortgage Loans");
(B) To establish and fund one or more trusts
(the "Permitted Trusts") and to authorize
such Permitted Trusts to engage in one or
more of the activities described in
immediately preceding clause (A) and to
issue certificates (the "Permitted
Certificates") in one or more classes
pursuant to pooling and servicing
agreements (each, a "Permitted Pooling and
Servicing Agreement"), with each class
having the characteristics specified in the
related Permitted Pooling and Servicing
Agreement, representing ownership interests
in the Permitted Mortgage Loans;
(C) To acquire, own, hold, invest in, offer,
sell, transfer, assign, pledge, finance and
deal in and with any Permitted Certificates
issued by a Permitted Trust established by
the corporation pursuant to immediately
preceding clause (B); and
(D) To engage in any other acts and activities
and to exercise any powers permitted to
corporations under the laws of the State of
Missouri which are incidental to, or
connected with the foregoing, and
necessary, suitable or convenient to
accomplish any of the foregoing; and
(vi) There is no action, suit or proceeding pending or,
to the best knowledge of the Depositor, threatened
against the Depositor in any court or by or before
any other governmental agency or instrumentality
which would materially and adversely affect the
ability of the Depositor to carry out its
obligations
under this Agreement.
(b) The Depositor hereby represents and warrants with respect
to each Mortgage Loan as of the Closing Date that:
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(i) Immediately prior to the transfer and assignment to
the Trustee, the related Note and the related
Mortgage were not subject to an assignment or pledge
created by it or attributable to its ownership; and
the Depositor had full right to transfer and sell
its right, title and interest in such Mortgage Loan
to the Trustee free and clear of any encumbrance,
lien, pledge, charge, claim or security interest
encumbering such Mortgage Loan created by it or
attributable to its ownership;
(ii) The related Assignment of Mortgage constitutes the
legal, valid and binding assignment of the related
Mortgage from the Depositor to the Trustee, and any
related reassignment of Assignment of Leases, Rents
and Profits constitutes the legal, valid and binding
assignment of any related Assignment of Leases,
Rents and Profits from the Depositor to the Trustee;
and
(iii) No claims have been made by the Depositor under the
related lender's title insurance policy, and the
Depositor has not done, by act or omission, anything
which would impair the coverage of such lender's
title insurance policy.
(c) It is understood and agreed that the representations and
warranties set forth in this Section 2.3 shall survive delivery of the
respective Trustee Mortgage Files to the Trustee until the termination of this
Agreement, and shall inure to the benefit of the Certificateholders, the Master
Servicer and the Special Servicers.
(d) Upon discovery by the Custodian, the Master Servicer, any
Special Servicer or the Trustee of a breach of any representation and warranty
set forth in Section 2.3(b) of the Mortgage Loan Purchase and Sale Agreement,
that any document required to be included in the Trustee Mortgage File does not
conform to the requirements of Section 2.1 or that any Mortgage Loan otherwise
fails to constitute a Qualified Mortgage, such Person shall give prompt notice
thereof to each of the other parties hereto, the Mortgage Loan Seller and the
Rating Agencies and the Mortgage Loan Seller shall, to the extent the Mortgage
Loan Seller is obligated to correct such condition or repurchase the related
Mortgage Loan under the terms of the Mortgage Loan Purchase and Sale Agreement,
correct such condition or repurchase such Mortgage Loan at the Repurchase Price
within 90 days after receipt of such notice by the Mortgage Loan Seller
(provided that, if (x) such condition cannot be corrected within 90 days of
receipt of such notice and (y) such failure does not
73
constitute a failure of the Mortgage Loan to be a Qualified Mortgage by reason
of the breach of a representation or warranty set forth in Section 2.3(b) of
the Mortgage Loan Purchase and Sale Agreement or by reason of missing or
defective documentation, so long as the Mortgage Loan Seller (i) has commenced
and is diligently proceeding with the correction of such failure and (ii) has
delivered to the Trustee an Officer's Certificate (A) describing the measures
being taken to cure such breach and (B) stating that the Mortgage Loan Seller
believes that such failure will be cured within an additional 90 days, the
Mortgage Loan Seller will be obligated to correct such condition or repurchase
such Mortgage Loan at the Repurchase Price within 180 days after receipt of
such notice), all pursuant to and as more particularly described in the
Mortgage Loan Purchase and Sale Agreement; it being understood and agreed that
none of such Persons has an obligation to conduct any investigation with
respect to such matters (except, in the case of the Trustee Mortgage Files, to
the extent provided in Sections 2.1 and 2.2).
(e) Upon receipt by the Master Servicer from the Mortgage
Loan Seller of the Repurchase Price for a repurchased Mortgage Loan, the Master
Servicer shall deposit such amount in the Collection Account, and the Trustee,
pursuant to Section 3.13, shall, upon receipt of a certificate of a Servicing
Officer certifying as to the receipt by the Master Servicer of the Repurchase
Price and the deposit of the Repurchase Price into the Collection Account
pursuant to this Section 2.3(e), release or cause to be released to the
Mortgage Loan Seller the related Trustee Mortgage File and shall execute and
deliver such instruments of transfer or assignment, in each case without
recourse, representation or warranty, as shall be prepared by the Master
Servicer to vest in the Mortgage Loan Seller any Mortgage Loan released
pursuant hereto, and any rights of the Depositor in, to and under the Mortgage
Loan Purchase and Sale Agreement, as such agreement related to such Mortgage
Loan that were initially transferred to the Trust Fund under Section 2.1, and
the Trustee, the Special Servicers and the Master Servicer shall have no
further responsibility with regard to such Trustee Mortgage File or the related
Mortgage Loan.
(f) In the event that the Mortgage Loan Seller incurs any
expense in connection with curing a breach of a representation or warranty
pursuant to Section 2.3(d) which also constitutes a default under the related
Mortgage Loan, the Mortgage Loan Seller shall have a right, and the Mortgage
Loan Seller shall be subrogated to the rights of the Trustee, as successor to
the mortgagee, to recover the amount of such expenses from the related
Borrower. At the expense of the Mortgage Loan Seller, the Master Servicer or
Special Servicer, as applicable, shall use reasonable efforts in recovering, or
assisting the Mortgage Loan Seller in recovering, from such Borrower
74
the amount of any such expenses. No such expense shall be an expense of the
Trust Fund.
(g) In the event that any litigation is commenced which
alleges facts which, in the judgment of the Depositor, could constitute a
breach of any of the Depositor's representations and warranties relating to the
Mortgage Loans, the Depositor hereby reserves the right to conduct the defense
of such litigation at its expense, except to the extent such action would
materially and adversely affect the interests of the Certificateholders.
(h) The Master Servicer shall use its best efforts, in
accordance with the Servicing Standard, to enforce the obligations of the
Mortgage Loan Seller to cure or repurchase any Mortgage Loan which is
discovered to be a "Defective Mortgage Loan" (as such term is defined in the
Mortgage Loan Purchase and Sale Agreement) under the terms of the Mortgage Loan
Purchase and Sale Agreement.
SECTION 2.4. Representations, Warranties and
Covenants of the Master Servicer and
Each Special Servicer.
(a) The Master Servicer hereby represents, warrants and
covenants that as of the Closing Date:
(i) The Master Servicer is a limited partnership, duly
organized, validly existing and in good standing
under the laws of the State of Missouri and has all
licenses necessary to carry on its business as now
being conducted and is in compliance with the laws
of each state in which any Mortgaged Property is
located to the extent necessary to ensure the
enforceability of each Mortgage Loan in accordance
with the terms of this Agreement;
(ii) The Master Servicer has the full partnership power,
authority and legal right to execute and deliver
this Agreement and to perform in accordance
herewith; the execution and delivery of this
Agreement by the Master Servicer and its performance
and compliance with the terms of this Agreement do
not violate any law, governmental rule, regulation,
judgment, decree or binding on the Master Servicer
or its properties, the Master Servicer's certificate
of limited partnership or constitute a default (or
an event which, with notice or lapse of time, or
both, would
75
constitute a default) under, or result in the breach
of, any material contract, agreement or other
instrument to which the Master Servicer is a party
or which may be applicable to the Master Servicer or
any of its assets, which violation, default or
breach would have consequences that would materially
and adversely affect the financial condition or
operations of the Master Servicer or its properties
taken as a whole or impair the ability of the Trust
Fund to realize on the Mortgage Loans;
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Master Servicer and,
assuming due authorization, execution and delivery
by the other parties hereto, constitutes a legal,
valid and binding obligation of the Master Servicer,
enforceable against it in accordance with the terms
of this Agreement, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization,
liquidation, receivership, moratorium or other laws
relating to or affecting creditors' rights
generally, or by general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iv) The Master Servicer is not in violation of, and the
execution and delivery of this Agreement by the
Master Servicer and its performance and compliance
with the terms of this Agreement will not constitute
a violation with respect to, any order or decree of
any court or any order, regulation of any federal,
state, municipal or governmental agency having
jurisdiction, or result in the creation or
imposition of any lien, charge or encumbrance which,
in any such event, would have consequences that
would materially and adversely affect the financial
condition or operations of the Master Servicer or
its properties taken as a whole or impair the
ability of the Trust Fund to realize on the Mortgage
Loans;
(v) There is no action, suit or proceeding pending or,
to the knowledge of the Master Servicer, threatened,
against the Master Servicer which, either in any one
instance or in the aggregate, would result in any
material adverse change in the business, operations
or financial condition of the Master Servicer or
would, if adversely determined, materially impair
the
76
ability of the Master Servicer to perform under the
terms of this Agreement or which would draw into
question the validity of this Agreement or the
Mortgage Loans or of any action taken or to be taken
in connection with the obligations of the Master
Servicer contemplated herein; and
(vi) No consent, approval, authorization or order of, or
registration or filing with, or notice to any court
or governmental agency or body is required for the
execution, delivery and performance by the Master
Servicer of, or compliance by the Master Servicer
with, this Agreement or, if required, such approval
has been obtained prior to the Cut-off Date, except
to the extent that the failure of the Master
Servicer to be qualified as a foreign limited
partnership or licensed in one or more states is not
necessary for the enforcement of the Mortgage Loans.
(b) Each Special Servicer hereby represents, warrants
and covenants that as of the Closing Date:
(i) It is a limited partnership, duly organized, validly
existing and in good standing under the laws of the
state of its organization and has all licenses
necessary to carry on its business as now being
conducted or is in compliance with the laws of each
state in which any Mortgaged Property as to which it
may be required hereunder to act as a Special
Servicer is located to the extent necessary to
ensure the enforceability of each such Specially
Serviced Mortgage Loan in accordance with the terms
of this Agreement;
(ii) It has the full partnership power, authority and
legal right to execute and deliver this Agreement
and to perform in accordance herewith; the execution
and delivery of this Agreement by it as a Special
Servicer and its performance and compliance with the
terms of this Agreement do not violate any law,
governmental rule, regulation, judgment, decree or
binding on the Master Servicer or its properties,
its certificate of limited partnership or constitute
a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under,
or result in the breach of, any material contract,
agreement or other instrument to which it is a party
or which
77
may be applicable to it or any of its assets, which
violation, default or breach would have consequences
that would materially and adversely affect its
condition (financial or otherwise) or operations or
its properties, taken as a whole, or impair the
ability of the Trust Fund to realize on the
Specially Serviced Mortgage Loans that it may be
required to specially service hereunder;
(iii) It has duly and validly authorized, executed and
delivered this Agreement and, assuming due
authorization, execution and delivery by the other
parties hereto, this Agreement constitutes its
legal, valid and binding obligation, enforceable
against it in accordance with the terms of this
Agreement, except as such enforcement may be limited
by bankruptcy, insolvency, reorganization,
liquidation, receivership, moratorium or other laws
relating to or affecting creditors' rights
generally, or by general principles of equity
(regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iv) It is not in violation of, and its execution and
delivery of this Agreement and its performance and
compliance with the terms of this Agreement will not
constitute a violation with respect to, any order or
decree of any court or any order or regulation of
any federal, state, municipal or governmental agency
having jurisdiction, or result in the creation or
imposition of any lien, charge or encumbrance,
which, in any such event, would have consequences
that would materially and adversely affect its
condition (financial or otherwise) or operations or
its properties taken as a whole or impair the
ability of the Trust Fund to realize on the
Specially Serviced Mortgage Loans that it may be
required to service hereunder;
(v) There is no action, suit or proceeding pending or,
to its knowledge, threatened, against it which,
either in any one instance or in the aggregate, is
reasonably likely to result in any material adverse
change in its business, operations or financial
condition, materially impair its ability to perform
under the terms of this Agreement or draw into
question the validity of this Agreement or the
Specially Serviced Mortgage Loans that it may be
required to service hereunder or of any action taken
78
or to be taken in connection with its obligations
contemplated herein; and
(vi) No consent, approval, authorization or order of, or
registration or filing with, or notice to any court
or governmental agency or body is required for the
execution, delivery and performance by it of, or
compliance by it with, this Agreement or, if
required, such approval has been obtained prior to
the Cut-off Date, except to the extent that its
failure to be qualified as a foreign limited
partnership or licensed in one or more states is not
necessary for the enforcement of the Specially
Serviced Mortgage Loans that it may be required to
servicer hereunder.
(c) It is understood and agreed that the representations and
warranties set forth in this Section shall survive delivery of the Trustee
Mortgage Files to the Trustee or the Custodian on behalf of the Trustee until
the termination of this Agreement, and shall inure to the benefit of the
Trustee on behalf of the Certficateholders and the Depositor. Upon discovery by
the Depositor, the Master Servicer, a Special Servicer or a Responsible Officer
of the Trustee (or upon written notice thereof from any Certificateholder) of a
breach of any of the representations and warranties set forth in this Section
which materially and adversely affects the interests of the Certificateholders,
the Master Servicer, the applicable Special Servicer or the Trustee with
respect to any Mortgage Loan, the party discovering such breach shall give
prompt written notice to the other parties hereto and to the Rating Agencies.
SECTION 2.5. Execution and Delivery of Certificates;
Issuance of REMIC I and REMIC II
Interests.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery to it of the Trustee Mortgage Files to the Custodian (to
the extent the documents constituting the Trustee Mortgage Files are actually
delivered to the Custodian), subject to the provisions of Section 2.1 and
Section 2.2 and, concurrently with such delivery, (i) acknowledges the issuance
of and hereby declares that it holds the REMIC I Interests on behalf of REMIC
II; (ii) acknowledges the issuance of and hereby declares that it holds the
REMIC II Interests on behalf of REMIC III and the Holders of the Regular
Certificates and the Class R-III Certificates; and (iii) has caused to be
executed and caused to be authenticated and delivered to or upon the order of
the Depositor, or as directed by the terms of this Agreement, Class A-1, Class
A-2, Class A-3, Class A-4, Class IO, Class B, Class C, Class D, Class E, Class
F-1, Class F-2, Class G, Class R-I, Class R-II and Class R-III Certificates in
authorized
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denominations, in each case registered in the names set forth in such order of
the Depositor or as so directed in this Agreement and duly authenticated by the
Authenticating Agent, which Certificates evidence ownership of the entire Trust
Fund.
SECTION 2.6. Miscellaneous REMIC Provisions.
(a) The REMIC I Interests and the Transferable Servicing
Interest are each hereby designated as a "regular interest" in REMIC I within
the meaning of Section 860G(a)(1) of the Code, and the Class R-I Certificates
are hereby designated as the sole class of "residual interests" in REMIC I
within the meaning of Section 860G(a)(2) of the Code. The Class A-1-II, Class
A-2-II, Class A-3-II, Class A-4-II, Class B-II, Class C-II, Class D-II, Class
E-II, Class F-1-II, Class F-2-II and Class G-II Interests are hereby designated
as "regular interests" in REMIC II within the meaning of Section 860G(a)(1) of
the Code, and the Class R-II Certificates are hereby designated as the sole
class of "residual interests" in REMIC II within the meaning of Section
860G(a)(2) of the Code. The Class A-1, Class A-2, Class A-3, Class A-4, Class
B, Class C, Class D, Class E, Class F-1, Class F-2 and Class G Certificates and
each of Component A- 1-II, Component A-2-II, Component A-3-II, Component B-II,
Component C-II, Component D-II, Component E-II and Component F/G-II, are hereby
designated as "regular interests" in REMIC III within the meaning of Section
860G(a)(1) of the Code and the Class R-III Certificates are hereby designated
as the sole class of "residual interests" in REMIC III within the meaning of
Section 860G(a)(2) of the Code. The Closing Date is hereby designated as the
"Startup Day" of REMIC I, REMIC II and REMIC III within the meaning of Section
860G(a)(9) of the Code. The "latest possible maturity date" of the REMIC I
Interests, the REMIC II Interests and the Regular Certificates for purposes of
Code Section 860G(a)(1) is the Scheduled Final Distribution Date.
(b) None of the Depositor, Trustee, Fiscal Agent, Special
Servicer or Master Servicer shall enter into any arrangement by which the Trust
Fund will receive a fee or other compensation for services other than as
specifically contemplated herein.
SECTION 2.7. Documents Not Delivered to Custodian.
All original documents relating to the Mortgage Loans which
are part of the Master Servicer Mortgage File are and shall be held by the
Master Servicer, in trust for the benefit of the Trustee on behalf of the
Certificateholders. The legal ownership of all records and documents with
respect to each Mortgage Loan prepared
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by or which come into the possession of the Master Servicer shall immediately
vest in the Trustee, in trust for the benefit of the Certificateholders.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.1. Master Servicer to Act as Master Servicer
of the Group 1 Mortgage Loan; Group 1
Special Servicer to Act as Special Servicer
of the Group 1 Mortgage Loan; Administration
of the Group 1 Mortgage Loan.
(a) The Master Servicer and the Group 1 Special Servicer,
each as an independent contractor, shall service and administer the Group 1
Mortgage Loan (or, in the case of the Group 1 Special Servicer, the Group 1
Mortgage Loan if it becomes a Specially Serviced Mortgage Loan and the Group 1
Mortgage Loan if it becomes an REO Mortgage Loan) on behalf of, and solely in
the best interests of, the Trust Fund and all of the Certificateholders and the
Trustee (as trustee for the Certificateholders) and, to the extent provided in
the ▇▇▇▇▇▇ Servicing Agreement, the holder of the ▇▇▇▇▇▇ Class B Note in
accordance with the terms of this Agreement and the ▇▇▇▇▇▇ Servicing Agreement.
The Master Servicer shall be obligated and liable to the Trustee and
Certificateholders for the servicing and administering of the Group 1 Mortgage
Loan (for so long as it is not a Specially Serviced Mortgage Loan) in
accordance with the provisions of the ▇▇▇▇▇▇ Servicing Agreement as if the
Master Servicer were servicing and administering the Group 1 Mortgage Loan
under the ▇▇▇▇▇▇ Servicing Agreement alone. The Master Servicer shall be
responsible for monitoring and enforcing the ▇▇▇▇▇▇ Servicer's duties and
obligations under the ▇▇▇▇▇▇ Servicing Agreement, and pursuant to the terms of
the ▇▇▇▇▇▇ Servicing Agreement (including Section 9.11 thereof), the Master
Servicer, without limitation, (i) shall provide the ▇▇▇▇▇▇ Servicer with
directions, consents and instructions in accordance with the ▇▇▇▇▇▇ Servicing
Agreement as and to the same extent as if the Master Servicer were the ▇▇▇▇▇▇
Class A Noteholder thereunder, (ii) shall give such notices and take such
actions upon a ▇▇▇▇▇▇ Event of Default in accordance with the ▇▇▇▇▇▇ Servicing
Agreement and to the same extent as if the Master Servicer were the ▇▇▇▇▇▇
Class A Noteholder thereunder, (iii) shall make Property Advances in respect of
the Group 1 Mortgage Loan to the extent required by the ▇▇▇▇▇▇ Servicing
Agreement and not made by the ▇▇▇▇▇▇ Servicer, subject to the limitations set
forth in
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Section 3.24 hereof, and (iv) shall require the ▇▇▇▇▇▇ Servicer to service the
Group 1 Mortgage Loan in a manner consistent with the REMIC Provisions. In
furtherance of, and to the extent consistent with, the foregoing, and except to
the extent that this Agreement or the ▇▇▇▇▇▇ Servicing Agreement provides for a
contrary specific course of action and except as otherwise provided in the next
succeeding paragraph, the Master Servicer and the Group 1 Special Servicer
shall service and administer the Group 1 Mortgage Loan, in accordance with
procedures (including collection procedures) that the ▇▇▇▇▇▇ Servicer
customarily employs and exercises in servicing and administering mortgage loans
and REO Properties for its own account and which are in accordance with
customary mortgage servicing practices of prudent lending institutions for
properties of a similar type but without regard to:
(i) any relationship that the ▇▇▇▇▇▇ Servicer, the Master Servicer or
the Group 1 Special Servicer or any Affiliate of any thereof may have
with the Borrower or any Affiliate of the Borrower;
(ii) the ▇▇▇▇▇▇ Servicer's obligation to make Property Advances or the
Master Servicer's obligation to make Advances;
(iii) the ▇▇▇▇▇▇ Servicer's, Master Servicer's or Group 1 Special
Servicer's right to receive compensation for servicing and
administering the Group 1 Mortgage Loan hereunder or under the ▇▇▇▇▇▇
Servicing Agreement; or
(iv) the ▇▇▇▇▇▇ Servicer's interest in the Class B Note.
The standards set forth above with respect to the conduct of
the Master Servicer and the Group 1 Special Servicer in the performance of
their respective obligations with respect to the Group 1 Mortgage Loans under
this Agreement is herein referred to as the "Group 1 Servicing Standard."
The Master Servicer's or the Group 1 Special Servicer's
liability for actions and omissions in its capacity as Master Servicer or Group
1 Special Servicer, as the case may be, hereunder is limited as provided herein
(including, without limitation, pursuant to Section 6.3). To the extent
consistent with the foregoing and subject to any express limitations set forth
in this Agreement and the ▇▇▇▇▇▇ Servicing Agreement, each of the Master
Servicer and the Group 1 Special Servicer shall use its best efforts to seek to
maximize the timely recovery of principal and interest on the Group 1 Mortgage
Loan; provided, however, that nothing herein contained shall be construed as an
express or implied guarantee by the Master Servicer or the Group 1 Special
Servicer of the collectability of the Group 1 Mortgage Loan. Subject only to
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the above-described Group 1 Servicing Standard and the terms of this Agreement
and the ▇▇▇▇▇▇ Servicing Agreement and of the Group 1 Mortgage Loan, the Master
Servicer and the Group 1 Special Servicer shall have full power and authority,
acting alone, through the ▇▇▇▇▇▇ Servicer or through other sub-servicers
(subject to paragraph (c) of this Section 3.1 and to Section 3.3), to do or
cause to be done any and all things in connection with such servicing and
administration of the Group 1 Mortgage Loans which they may deem necessary or
desirable.
(b) To the extent that the ▇▇▇▇▇▇ Servicing Agreement and any
provision of this Agreement conflict, the Master Servicer and the Group 1
Special Servicer shall not have any liability hereunder if the Master Servicer
or the Group 1 Special Servicer, if applicable, act or omit to act in a manner
consistent with the Group 1 Servicing Standard and the terms of the ▇▇▇▇▇▇
Servicing Agreement. To the extent that no provision of the ▇▇▇▇▇▇ Servicing
Agreement prescribes an action or directs that an action not be taken, the
Master Servicer and the Group 1 Special Servicer in servicing and administering
the Group 1 Mortgage Loan shall act or refrain from acting as provided in this
Agreement with respect to the duties of the Master Servicer, the Group 2
Special Servicer or the NOM Special Servicer as they relate to the Group 2
Mortgage Loans. Notwithstanding the foregoing, neither the Master Servicer nor
the Group 1 Special Servicer shall, or permit the ▇▇▇▇▇▇ Servicer or any
sub-servicer to, modify, amend, waive or otherwise consent to the change of the
stated Maturity Date of the Group 1 Mortgage Loan, the payment of principal of,
or interest or Default Interest on, the Group 1 Mortgage Loan, or any other
term of the Group 1 Mortgage Loan (including by releasing all or a portion of
the related Mortgaged Property), unless (a) such modification, amendment,
waiver or consent is not a "significant modification" under Section 1001 of the
Code, including proposed, temporary or final Treasury regulations thereunder,
or Treasury Regulations Section 1.860G-2(b)(3) (other than clause (i) thereof),
(b) to the extent such modification, amendment, waiver or consent would
constitute a "significant modification" under the preceding clause (a), the
Group 1 Mortgage Loan is in default or a default with respect thereto is
reasonably foreseeable or (c) permitted by Section 3.12; provided, however,
that (i) each such modification, amendment, waiver or consent shall be
consistent with the Group 1 Servicing Standard and (ii) neither the Master
Servicer nor the Group 1 Special Servicer may agree to any retroactive
modification, amendment, waiver or consent.
(c) The Master Servicer, on behalf of the ▇▇▇▇▇▇ Class A
Noteholder, shall have the right to agree to or consent to amendments and
modifications of the ▇▇▇▇▇▇ Servicing Agreement; provided that the Master
Servicer shall not agree or consent to any amendment or modification of the
▇▇▇▇▇▇ Servicing Agreement unless
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each of the Rating Agencies shall have confirmed in writing that such
modification or amendment shall not, in and of itself, result in the
downgrading, withdrawal or qualification of the rating then assigned such
Rating Agency to any Class of Certificates.
(d) The Master Servicer or the Group 1 Special Servicer may
enter into sub-servicing agreements with third parties with respect to any of
their respective obligations hereunder in respect of the Group 1 Mortgage Loan,
provided that (1) any such agreement shall be consistent with the provisions of
this Agreement and the ▇▇▇▇▇▇ Servicing Agreement and (2) no sub-servicer
retained by the Master Servicer or the Group 1 Special Servicer shall grant any
modification, waiver or amendment to any Mortgage Loan without the approval of
the Master Servicer or the Group 1 Special Servicer, as applicable, and (3)
such agreement shall be consistent with the Group 1 Servicing Standards set
forth in Section 3.1(a). Any such sub-servicing agreement may permit the
sub-servicer to delegate its duties to agents or subcontractors so long as the
related agreements or arrangements with such agents or subcontractors are
consistent with the provisions of this Section 3.1(c).
Any sub-servicing agreement entered into by the Master
Servicer or the Group 1 Special Servicer in respect of the Group 1 Mortgage
Loan shall provide that it may be assumed or terminated by the Trustee if the
Trustee or a successor Master Servicer or Group 1 Special Servicer has assumed
the duties of the Master Servicer or the Group 1 Special Servicer, as
applicable, without cost or obligation to the assuming or terminating party or
the Trust Fund, upon the assumption by the Trustee or a successor Master
Servicer or Group 1 Special Servicer of the obligations of the Master Servicer
or the Group 1 Special Servicer, as applicable, pursuant to Section 7.2.
Any sub-servicing agreement in respect of the Group 1
Mortgage Loan, and any other transactions or services relating to the Group 1
Mortgage Loan involving a sub-servicer, shall be deemed to be between the
Master Servicer or the Group 1 Special Servicer, as applicable, and such
sub-servicer alone, and the Trustee and the Certificateholders shall not be
deemed parties thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the sub-servicer, including the Depositor acting in
such capacity, except as set forth in Section 3.1(d). Any payments with respect
to the Group 1 Mortgage Loan received by any sub-servicer shall be deemed to
have been received by the Master Servicer or the Group 1 Special Servicer, as
applicable.
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(e) If the Trustee or any successor Master Servicer or Group
1 Special Servicer assumes the obligations of the Master Servicer or the Group
1 Special Servicer, as applicable, in respect of the Group 1 Mortgage Loan in
accordance with Section 7.2, the Trustee or such successor Master Servicer or
Group 1 Special Servicer, to the extent necessary to permit the Trustee or such
successor Master Servicer or Group 1 Special Servicer to carry out the
provisions of Section 7.2, shall, without act or deed on the part of the
Trustee or such successor Master Servicer or Group 1 Special Servicer, succeed
to all of the rights and obligations of the Master Servicer or Group 1 Special
Servicer under any sub-servicing agreement entered into by the Master Servicer
or Group 1 Special Servicer pursuant to Section 3.1(c), subject to the right of
termination by the Trustee set forth in Section 3.1(c). In such event, the
Trustee or such successor Master Servicer or Group 1 Special Servicer shall be
deemed to have assumed all of the Master Servicer's or Group 1 Special
Servicer's interest therein (but not any liabilities or obligations in respect
of acts or omissions of the Master Servicer or Group 1 Special Servicer prior
to such deemed assumption) and to have replaced the Master Servicer or the
Group 1 Special Servicer, as applicable, as a party to such sub-servicing
agreement to the same extent as if such sub-servicing agreement had been
assigned to the Trustee or such successor Master Servicer or the Group 1
Special Servicer, except that the Master Servicer or the Group 1 Special
Servicer shall not thereby be relieved of any liability or obligations under
such sub-servicing agreement that accrued prior to the assumption of duties
hereunder by the Trustee or such successor Master Servicer or Group 1 Special
Servicer.
In the event that the Trustee or any successor Master
Servicer or Group 1 Special Servicer assumes the servicing obligations of the
Master Servicer or the Group 1 Special Servicer, as the case may be, upon
request of the Trustee or such successor Master Servicer or Group 1 Special
Servicer, as the case may be, the Master Servicer or such Group 1 Special
Servicer shall, at its own expense, deliver to the Trustee or such successor
Master Servicer or Group 1 Special Servicer (as the case may be) all documents
and records relating to any sub-servicing agreement and the Group 1 Mortgage
Loan then being serviced thereunder and an accounting of amounts collected and
held by it, if any, and the Master Servicer will otherwise use its best efforts
to effect the orderly and efficient transfer of any sub-servicing agreement to
the Trustee or such successor Master Servicer.
(f) Notwithstanding any sub-servicing agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer or Group 1 Special Servicer and any Person acting as
sub-servicer (or its agents or subcontractors) or any reference to actions
taken through any Person acting
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as sub-servicer or otherwise, the Master Servicer or Group 1 Special Servicer,
as applicable, shall remain obligated and liable to the Trustee and
Certificateholders for the servicing and administering of the Group 1 Mortgage
Loan in accordance with the provisions of this Agreement without diminution of
such obligation or liability by virtue of such sub-servicing agreements or
arrangements or by virtue of indemnification from the Depositor or any Person
acting as sub-servicer (or its agents or subcontractors), to the same extent
and under the same terms and conditions as if the Master Servicer or Group 1
Special Servicer, as applicable, were servicing and administering the Group 1
Mortgage Loan alone. The Master Servicer or the Group 1 Special Servicer, as
applicable, shall be entitled to enter into an agreement with any sub-servicer
providing for indemnification of the Master Servicer or the Group 1 Special
Servicer, as applicable, by such sub-servicer, and nothing contained in this
Agreement shall be deemed to limit or modify such indemnification, but no such
agreement for indemnification shall be deemed to limit or modify this
Agreement.
(g) In the event that the ▇▇▇▇▇▇ Servicer shall be removed or
resign at any time, the Trustee, as the holder of the ▇▇▇▇▇▇ Class A Note,
shall appoint Midland Loan Services, L.P. as successor ▇▇▇▇▇▇ Servicer or, if
Midland Loan Services, L.P. does not accept such appointment or is not
acceptable to the holder of the ▇▇▇▇▇▇ Class B Note or otherwise does not
qualify pursuant to the ▇▇▇▇▇▇ Servicing Agreement, shall use its reasonable
efforts to appoint another entity acceptable to the holder of the ▇▇▇▇▇▇ Class
B Note and the Group 2 Special Servicer, meeting the requirements of the ▇▇▇▇▇▇
Servicing Agreement and Section 6.4 of this Agreement.
(h) For all purposes of this Section 3.1, the ▇▇▇▇▇▇ Servicer
shall not be considered to be a "sub-servicer" and the ▇▇▇▇▇▇ Servicing
Agreement shall not be considered to be a "sub-servicing agreement".
SECTION 3.2. Master Servicer to Act as Master Servicer
of Group 2 Mortgage Loans; Group 2 and
NOM Special Servicers to Act as Special
Servicers of the Group 2 Mortgage Loans;
Administration of the Group 2 Mortgage
Loans.
(a) The Master Servicer, as an independent contractor, shall
service and administer the Group 2 Mortgage Loans (other than any such Mortgage
Loans that are Specially Serviced Mortgage Loans or REO Mortgage Loans); the
Group 2 Special Servicer, as an independent contractor, shall service and
administer the Group 2 Mortgage Loans that are Specially-Serviced Mortgage
Loans (other than
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the NOM Loan) and any REO Properties acquired in respect thereof; and the NOM
Special Servicer, as an independent contractor, shall service and administer
the NOM Loan (if it is a Specially-Serviced Mortgage Loan) and any REO Property
acquired in respect thereof. The Master Servicer, the Group 2 Special Servicer
and the NOM Special Servicer shall service and administer the applicable
Mortgage Loans and REO Properties on behalf of the Trust Fund solely in the
best interests of, and for the benefit of, all of the Certificateholders and
the Trustee (as trustee for the Certificateholders) in accordance with the
terms of this Agreement and the respective Group 2 Mortgage Loans. In
furtherance of, and to the extent consistent with, the foregoing, and except to
the extent that this Agreement provides for a contrary specific course of
action and except as otherwise provided in the next succeeding paragraph, each
of the Master Servicer, the Group 2 Special Servicer and the NOM Special
Servicers shall service and administer each Group 2 Mortgage Loan (x) in the
same manner in which, and with the same care, skill, prudence and diligence
with which, it services and administers similar mortgage loans for other
third-party portfolios, giving due consideration to customary and usual
standards of practice of prudent institutional commercial mortgage loan
servicers used with respect to loans comparable to the Group 2 Mortgage Loans,
or (y) in the same manner in which, and with the same care, skill, prudence and
diligence with which, it services and administers similar mortgage loans which
it owns, whichever standard of care is higher, and taking into account its
other obligations hereunder, but without regard to:
(i) any other relationship that the Master Servicer, the
Group 2 Special Servicer, the NOM Special Servicer,
any subservicer or any Affiliate of the Master
Servicer, the Group 2 Special Servicer, the NOM
Special Servicer or any subservicer may have with
the related Borrower or any Affiliate of such
Borrower;
(ii) the ownership of any Certificate by the Master
Servicer, the Group 2 Special Servicer, the NOM
Special Servicer or any Affiliate of either;
(iii) the Master Servicer's, the Trustee's or the Fiscal
Agent's obligation to make P&I Advances or Property
Advances or to incur servicing expenses with respect
to such Mortgage Loan;
(iv) the Master Servicer's, the Group 2 Special
Servicer's, the NOM Special Servicer's or any
sub-servicer's right to receive
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compensation for its services hereunder or with
respect to any particular transaction; or
(v) the ownership or servicing or management for others
by the Master Servicer, the Group 2 Special
Servicer, the NOM Special Servicer or any
sub-servicer, of any other mortgage loans or
property.
The standards set forth above with respect to the conduct of
the Master Servicer, the Group 2 Special Servicer and the NOM Special Servicer
in the performance of their respective obligations with respect to the Group 2
Mortgage Loans under this Agreement is herein referred to as the "Group 2
Servicing Standard."
The Master Servicer's, the Group 2 Special Servicer's or the
NOM Special Servicer's liability for actions and omissions in its capacity as
Master Servicer, Group 2 Special Servicer or NOM Special Servicer, as the case
may be, hereunder is limited as provided herein (including, without limitation,
pursuant to Section 6.3). To the extent consistent with the foregoing and
subject to any express limitations set forth in this Agreement, each of the
Master Servicer, the Group 2 Special Servicer and the NOM Special Servicer
shall use its reasonable efforts to seek to maximize the timely and complete
recovery of principal and interest on the Group 2 Mortgage Loans; provided,
however, that nothing herein contained shall be construed as an express or
implied guarantee by the Master Servicer, the Group 2 Special Servicer or the
NOM Special Servicer of the collectability of the Group 2 Mortgage Loans.
Subject only to the above-described Group 2 Servicing Standard and the terms of
this Agreement and of the respective Group 2 Mortgage Loans, the Master
Servicer, the Group 2 Special Servicer and the NOM Special Servicer shall have
full power and authority, acting alone or through sub-servicers (subject to
paragraph (c) of this Section 3.2 and to Section 3.3), to do or cause to be
done any and all things in connection with such servicing and administration of
the Group 2 Mortgage Loans which they may deem necessary or desirable. Without
limiting the generality of the foregoing, the Master Servicer, the Group 2
Special Servicer and the NOM Special Servicer shall, and each is hereby
authorized and empowered by the Trustee to, with respect to each applicable
Group 2 Mortgage Loan and the related Mortgaged Property, prepare, execute and
deliver, on behalf of the Certificateholders and the Trustee or any of them,
any and all financing statements, continuation statements and other documents
or instruments necessary to maintain the lien on the related Mortgaged Property
and related collateral; any modifications, waivers, consents or amendments to
or with respect to any applicable Group 2 Mortgage Loan or any documents
contained in the related Mortgage File; and any and all instruments of
satisfaction or cancellation, or of partial
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or full release or discharge, and all other comparable instruments, if, in its
reasonable judgment, such action is in the best interests of the
Certificateholders and is in accordance with, or is required by, this
Agreement. Notwithstanding the foregoing, neither the Master Servicer, the
Group 2 Special Servicer nor the NOM Special Servicer shall, or permit any
sub-servicer to, modify, amend, waive or otherwise consent to the change of the
stated Maturity Date of any Group 2 Mortgage Loan, the payment of principal of,
or interest or Default Interest on, any Group 2 Mortgage Loan, or any other
term of a Group 2 Mortgage Loan (including by releasing all or a portion of the
related Mortgaged Property), unless (a) such modification, amendment, waiver or
consent is not a "significant modification" under Section 1001 of the Code,
including proposed, temporary or final Treasury regulations thereunder, or
Treasury Regulations Section 1.860G-2(b)(3) (other than clause (i) thereof),
(b) to the extent such modification, amendment, waiver or consent would
constitute a "significant modification" under the preceding clause (a), such
Group 2 Mortgage Loan is in default or a default with respect thereto is
reasonably foreseeable, (c) permitted by Section 3.12; provided, however, that
(i) each such modification, amendment, waiver or consent shall be consistent
with the Group 2 Servicing Standard, (ii) none of the Master Servicer, the
Group 2 Special Servicer nor the NOM Special Servicer may agree to any
retroactive modification, amendment, waiver or consent, (iii) the NOM Special
Servicer shall not, without the consent of the Group 2 Special Servicer, permit
the release of any property securing the NOM Loan or reduce the Principal
Amount thereof by more than the excess, if any, of the Certificate Balance of
the Class F-1 Certificates over $2,000,000, (iv) if the NOM Loan has become a
Specially Serviced Mortgage Loan and, on the basis of any Updated Appraisal,
the NOM Expected Loss equals or exceeds the excess, if any, of the Certificate
Balance of the Class F-1 Certificates over $1,000,000 but is less than 150% of
the Certificate Balance of the Class (which Certificate Balance shall be
confirmed in writing by the Trustee), without the consent of the Group 2
Special Servicer, the NOM Special Servicer may not, nor may it permit any
sub-servicer to, permit a modification, waiver or amendment or grant a waiver
with respect to the NOM Mortgage Loan that would result in a decrease in the
Mortgage Rate thereon or defer payments for a period in excess of the period
preceding the next scheduled Updated Appraisal, reduce the Principal Amount
thereof by more than the amount equal to the Certificate Balance of the Class
F-1 Certificates minus $2,000,000 (which Certificate Balance shall be confirmed
in writing by the Trustee), and (v) prior to agreeing to or permitting any
modification, amendment, waiver or consent with respect to the NOM Mortgage
Loan, the NOM Special Servicer shall notify the Group 2 Special Servicer and
offer the Group 2 Special Servicer an opportunity during a period equal to the
longer of three Business Days or five calendar days prior to taking any such
action to confer with them as to advisability of such action (it being
understood that, except as otherwise provided in
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clause (iii) of this proviso, the NOM Special Servicer shall not have any
obligation to follow any instructions or directions given to them by the Group
2 Special Servicer with respect to such actions). The Master Servicer, the
Group 2 Special Servicer and the NOM Special Servicer shall service and
administer the Group 2 Mortgage Loans in accordance with applicable state and
federal law and shall provide to the Borrowers any reports required to be
provided to them thereby. Subject to Section 3.13, the Trustee shall, upon the
receipt of a written request of a Servicing Officer, execute and deliver to the
Master Servicer, the Group 2 Special Servicer and the NOM Special Servicer any
powers of attorney and other documents prepared by the Master Servicer, the
Group 2 Special Servicer or the NOM Special Servicer and necessary or
appropriate (as certified in such written request) to enable the Master
Servicer, the Group 2 Special Servicer and the NOM Special Servicer to carry
out their servicing and administrative duties hereunder; provided, however,
that none of the Trustee, its officers, directors, employees or any Person who
controls the Trustee within the meaning of the 1934 Act shall not be liable for
any actions of the Master Servicer, the Group 2 Special Servicer or NOM Special
Servicer under any such powers of attorney.
(b) Unless otherwise provided in the related Note, the Master
Servicer shall apply any partial Principal Prepayment received on a Group 2
Mortgage Loan on a date other than a Due Date to the principal balance of such
Group 2 Mortgage Loan as of the Due Date immediately following the date of
receipt of such partial Principal Prepayment.
(c) The Master Servicer, the Group 2 Special Servicer or the
NOM Special Servicer may enter into sub-servicing agreements with third parties
with respect to any of its respective obligations hereunder in respect of the
Group 2 Mortgage Loans, provided that (1) any such agreement shall be
consistent with the provisions of this Agreement and (2) no sub-servicer
retained by the Master Servicer, the Group 2 Special Servicer or the NOM
Special Servicer shall grant any modification, waiver or amendment to any
Mortgage Loan without the approval of the Master Servicer, the Group 2 Special
Servicer or the NOM Special Servicer, as applicable, and (3) such agreement
shall be consistent with the Group 2 Servicing Standards set forth in Section
3.2(a). Any such sub-servicing agreement may permit the sub-servicer to
delegate its duties to agents or subcontractors so long as the related
agreements or arrangements with such agents or subcontractors are consistent
with the provisions of this Section 3.2(c).
Any sub-servicing agreement entered into by the Master
Servicer, the Group 2 Special Servicer or the NOM Special Servicer in respect
of the Group 2
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Mortgage Loans (other than an Initial Sub-Servicing Agreement) shall provide
that it may be assumed or terminated by the Trustee if the Trustee or a
successor Master Servicer, Group 2 Special Servicer or NOM Special Servicer has
assumed the duties of the Master Servicer, the Group 2 Special Servicer or the
NOM Special Servicer, as applicable, without cost or obligation to the assuming
or terminating party or the Trust Fund, upon the assumption by the Trustee or a
successor Master Servicer, Group 2 Special Servicer or NOM Special Servicer of
the obligations of the Master Servicer, the Group 2 Special Servicer or the NOM
Special Servicer, as applicable, pursuant to Section 7.2. In the case of an
Initial Sub-Servicing Agreement, upon the assumption by the Trustee or a
successor Master Servicer of the obligations of the Master Servicer pursuant to
Section 7.2, unless an Initial Sub-Servicer Event of Default shall have
occurred under the applicable Initial Sub-Servicing Agreement, the Trustee or
the successor Master Servicer shall assume such Initial Sub-Servicing
Agreement.
Any sub-servicing agreement in respect of the Group 2
Mortgage Loans, and any other transactions or services relating to the Group 2
Mortgage Loans involving a sub-servicer, shall be deemed to be between the
Master Servicer or a Special Servicer, as applicable, and such sub-servicer
alone, and the Trustee and the Certificateholders shall not be deemed parties
thereto and shall have no claims, rights, obligations, duties or liabilities
with respect to the sub-servicer, including the Depositor acting in such
capacity, except as set forth in Section 3.2(d).
(d) If the Trustee or any successor Master Servicer, Group 2
Special Servicer or NOM Special Servicer assumes the obligations of the Master
Servicer, the Group 2 Special Servicer or the NOM Special Servicer, as
applicable, in respect of the Group 2 Mortgage Loans in accordance with Section
7.2, the Trustee or such successor Master Servicer, Group 2 Special Servicer or
NOM Special Servicer, to the extent necessary to permit the Trustee or such
successor Master Servicer, Group 2 Special Servicer or NOM Special Servicer to
carry out the provisions of Section 7.2, shall, without act or deed on the part
of the Trustee or such successor Master Servicer, Group 2 Special Servicer or
NOM Special Servicer, succeed to all of the rights and obligations of the
Master Servicer, Group 2 Special Servicer or NOM Special Servicer under any
sub-servicing agreement entered into by the Master Servicer, Group 2 Special
Servicer or NOM Special Servicer pursuant to Section 3.2(c), subject to the
right of termination by the Trustee set forth in Section 3.2(c). In such event,
the Trustee or such successor Master Servicer, Group 2 Special Servicer or NOM
Special Servicer shall be deemed to have assumed all of the Master Servicer's,
Group 2 Special Servicer's or NOM Special Servicer's interest therein (but not
any liabilities or obligations in respect of acts or omissions of the Master
Servicer, Group 2 Special Servicer or NOM Special Servicer prior to such deemed
assumption)
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and to have replaced the Master Servicer, the Group 2 Special Servicer or the
NOM Special Servicer, as applicable, as a party to such sub-servicing agreement
to the same extent as if such sub-servicing agreement had been assigned to the
Trustee or such successor Master Servicer, Group 2 Special Servicer or NOM
Special Servicer, except that the Master Servicer, the Group 2 Special Servicer
or the NOM Special Servicer shall not thereby be relieved of any liability or
obligations under such sub-servicing agreement that accrued prior to the
assumption of duties hereunder by the Trustee or such successor Master
Servicer, Group 2 Special Servicer or NOM Special Servicer.
In the event that the Trustee or any successor Master
Servicer, Group 2 Special Servicer or NOM Special Servicer assumes the
servicing obligations of the Master Servicer, the Group 2 Special Servicer or
the NOM Special Servicer, as the case may be, upon request of the Trustee or
such successor Master Servicer or Special Servicer, as the case may be, the
Master Servicer or such Special Servicer shall, at its own expense, deliver to
the Trustee or such successor Master Servicer, Group 2 Special Servicer or NOM
Special Servicer (as the case may be) all documents and records relating to any
sub-servicing agreement and the Group 2 Mortgage Loans then being serviced
thereunder and an accounting of amounts collected and held by it, if any, and
the Master Servicer will otherwise use its best efforts to effect the orderly
and efficient transfer of any sub-servicing agreement to the Trustee or such
successor Master Servicer.
SECTION 3.3. Liability of the Master Servicer and
Special Servicers in Respect of Group 2
Mortgage Loans.
Notwithstanding any sub-servicing agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Master Servicer, Group 2 Special Servicer or NOM Special Servicer and any
Person acting as sub-servicer (or its agents or subcontractors) or any
reference to actions taken through any Person acting as sub-servicer or
otherwise, the Master Servicer, Group 2 Special Servicer or NOM Special
Servicer, as applicable, shall remain obligated and liable to the Trustee and
Certificateholders for the servicing and administering of the Group 2 Mortgage
Loans in accordance with the provisions of this Agreement without diminution of
such obligation or liability by virtue of such sub-servicing agreements or
arrangements or by virtue of indemnification from the Depositor or any Person
acting as sub-servicer (or its agents or subcontractors) ,to the same extent
and under the same terms and conditions as if the Master Servicer, Group 2
Special Servicer or NOM Special Servicer, as applicable, were servicing and
administering the Mortgage Loans for which it is responsible alone. The Master
Servicer, the Group 2 Special Servicer or the NOM Special Servicer, as
applicable, shall be entitled to enter into an
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agreement with any sub-servicer providing for indemnification of the Master
Servicer, the Group 2 Special Servicer or the NOM Special Servicer, as
applicable, by such sub-servicer, and nothing contained in this Agreement shall
be deemed to limit or modify such indemnification, but no such agreement for
indemnification shall be deemed to limit or modify this Agreement.
SECTION 3.4. Collection of Certain Mortgage Loan
Payments in Respect of Group 2 Mortgage
Loans.
The Master Servicer, the Group 2 Special Servicer and the NOM
Special Servicers shall each use reasonable efforts to collect all payments
called for under the terms and provisions of the Group 2 Mortgage Loans for
which it is responsible when the same shall be due and payable, and shall
follow such collection procedures as are consistent with the Group 2 Servicing
Standard, including, in the case of the Group 2 Special Servicer, using its
reasonable efforts in accordance with the Group 2 Servicing Standard to collect
income statements and rent rolls from the Borrowers under the Group 2 Mortgage
Loans as required by the related Mortgage Loan Documents and providing (in the
case of the Master Servicer only) reasonable advance notice to such Borrowers
of Balloon Payments due with respect to such Group 2 Mortgage Loans. Consistent
with the foregoing, the Master Servicer, the Group 2 Special Servicer or the
NOM Special Servicer, as applicable, may in its discretion waive any late
payment charge, Default Interest or penalty fees in connection with any
delinquent Monthly Payment or Balloon Payment with respect to any Mortgage
Loan.
SECTION 3.5. Collection of Taxes, Assessments and
Similar Items in Respect of Group 2
Mortgage Loans.
(a) With respect to each Group 2 Mortgage Loan (other than
REO Mortgage Loans), the Master Servicer shall maintain accurate records with
respect to each related Mortgaged Property reflecting the status of taxes,
assessments and other similar items that are or may become a lien on such
related Mortgaged Property, the status of payments of insurance premiums for
insurance policies required to be maintained by the related Borrower under the
terms of the Mortgage Loan and the amounts of Escrow Payments, if any, required
in respect thereof and the status of payments of any ground rents. From time to
time, the Master Servicer shall (i) obtain all bills for the payment of such
items (including renewal premiums), and (ii) effect payment of all such bills
with respect to each such Mortgaged Property prior to the applicable penalty or
termination date, in each case employing for such purpose
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Escrow Payments as allowed under the terms of such Mortgage Loan. If a Borrower
fails to make any such Escrow Payment on a timely basis or collections from
such Borrower are insufficient to pay any such item before the applicable
penalty or termination date as a result of the Borrower's failure to make
required payments, the Master Servicer shall (in accordance with Section 3.10
with respect to the payment of insurance premiums) advance the amount necessary
to effect payment of any such item, unless the Master Servicer, in its good
faith business judgment, determines that such Advance would be a Nonrecoverable
Advance. With respect to any Group 2 Mortgage Loan as to which the related
Borrower is not required to make Escrow Payments, if such Borrower fails to
effect payment of any such ▇▇▇▇ when required to do so, then, the Master
Servicer shall (in accordance with Section 3.10 with respect to the payment of
insurance premiums) advance the amount necessary to effect payment of any such
▇▇▇▇ on or before the applicable penalty or termination date; provided, that,
with respect to the payment of taxes and assessments, the Master Servicer shall
make such advance within five Business Days after the Master Servicer has
received confirmation that such item has not been paid. The Master Servicer
shall be entitled to reimbursement of Property Advances that it makes pursuant
to the preceding sentence, with interest thereon at the Reimbursement Rate,
from amounts received on or in respect of the Group 2 Mortgage Loan respecting
which such Property Advance was made or if such Property Advance has become a
Nonrecoverable Advance, to the extent permitted by Section 3.7 of this
Agreement.
(b) The Master Servicer shall segregate and hold all funds
collected and received pursuant to any Group 2 Mortgage Loan constituting
Escrow Payments separate and apart from any of its own funds and general assets
and shall establish and maintain one or more segregated custodial accounts
(each, an "Escrow Account") into which all Escrow Payments shall be deposited
within one (1) Business Day after receipt. The Master Servicer shall also
deposit into each Escrow Account any amounts representing losses on Permitted
Investments in which amounts on deposit in such Escrow Account have been
invested pursuant to Section 3.9(b) and any Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds which are required to be applied to the
restoration or repair of the related Mortgaged Property pursuant to the related
Mortgage Loan. Escrow Accounts shall be entitled, "Midland Loan Services, L.P.,
as Master Servicer, in trust for LaSalle National Bank, as Trustee in trust for
Holders of Commercial Mortgage Acceptance Corp. Commercial Mortgage
Pass-Through Certificates, Series 1997-ML1, and Various Borrowers." Each Escrow
Account shall be an Eligible Account to the extent consistent with the related
Mortgage Loan Documents. Withdrawals from an Escrow Account may be made by the
Master Servicer only:
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(i) to effect timely payments of items with respect to
which Escrow Payments are required pursuant to the
related Mortgage;
(ii) to transfer funds to the Collection Account to
reimburse the Fiscal Agent, the Trustee, the Master
Servicer, the Group 2 Special Servicer or the NOM
Special Servicer, as applicable, in that order for
any Advance relating to Escrow Payments, but only
from amounts received with respect to the related
Group 2 Mortgage Loan which represent late
collections of Escrow Payments thereunder;
(iii) for application to the restoration or repair of the
related Mortgaged Property in accordance with the
related Mortgage Loan and the Group 2 Servicing
Standard;
(iv) to clear and terminate such Escrow Account upon the
termination of this Agreement;
(v) to pay from time to time to the Master Servicer any
interest or investment income earned on funds
deposited in such Escrow Account pursuant to Section
3.9(b) to the extent (a) permitted by law and (b)
not required to be paid to the related Borrower
under the terms of the related Group 2 Mortgage Loan
or by law, or to pay such interest or income to the
related Borrower if such income is required to paid
to the related Borrower under law or by the terms of
the related Mortgage Loan; and
(vi) to remove any funds deposited in such Escrow Account
that were not required to be deposited therein.
SECTION 3.6. Collection Account; Distribution Accounts.
(a) The Master Servicer shall establish and maintain the
Collection Account in the Trustee's name, for the benefit of the
Certificateholders. The Collection Account shall be established and maintained
as an Eligible Account. The Master Servicer shall deposit or cause to be
deposited in the Collection Account within one Business Day following receipt
the following payments and collections received or made by it on or with
respect to the Mortgage Loans:
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(i) all amounts received from the ▇▇▇▇▇▇ Servicer with
respect to the Group 1 Mortgage Loan in accordance
with the ▇▇▇▇▇▇ Servicing Agreement (including,
without limitation, all distributions of principal,
interest and other amounts received from the
Borrower and the proceeds of any repurchase of the
Group 1 Mortgage Loan by the ▇▇▇▇▇▇ Servicer
pursuant to Section 2.2 of the ▇▇▇▇▇▇ Servicing
Agreement);
(ii) all payments on account of principal on the Group 2
Mortgage Loans;
(iii) all payments on account of interest (other than
Default Interest) on the Group 2 Mortgage Loans and
all Prepayment Premiums with respect thereto;
(iv) any amounts required to be deposited pursuant to
Section 3.9(b) in connection with losses realized on
Permitted Investments with respect to funds held in
the Collection Account;
(v) (x) all Net REO Proceeds transferred from an REO
Account relating to a Group 2 Mortgage Loan pursuant
to Section 3.18(b) and (y) all Condemnation
Proceeds, Insurance Proceeds and Net Liquidation
Proceeds not required to be applied to the
restoration or repair of the related Mortgaged
Property or released to the related Borrower in
accordance with the Group 2 Servicing Standard;
(vi) any amounts received from Borrowers relating to
Group 2 Mortgage Loans which represent recoveries of
Property Advances made pursuant to Section 3.5; and
(vii) any other amounts required by the provisions of this
Agreement to be deposited into the Collection
Account by the Master Servicer or a Special
Servicer, including, without limitation, proceeds of
any purchase or repurchase of a Mortgage Loan
pursuant to Section 2.3(d) or (e), Section 3.20 or
Section 9.1.
The foregoing requirements for deposits in the Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the
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foregoing, payments in the nature of late payment charges, late fees, Default
Interest, NSF check charges, Assumption Fees, loan modification fees, loan
service transaction fees, extension fees, demand fees, beneficiary statement
charges and similar fees need not be deposited in the Collection Account by the
Master Servicer and, to the extent permitted by applicable law and subject to
the REMIC Provisions, the Master Servicer or the related Special Servicer, as
applicable, shall be entitled to retain any such charges and fees received with
respect to the Mortgage Loans. In the event that the Master Servicer deposits
in the Collection Account any amount not required to be deposited therein, the
Master Servicer may at any time withdraw such amount from the Collection
Account, any provision herein to the contrary notwithstanding.
(b) The Trustee shall establish and maintain the REMIC I
Distribution Account, the REMIC II Distribution Account and the REMIC III
Distribution Account in the name of the Trustee, in trust for the benefit of
the Certificateholders. The Distribution Accounts may be established and
maintained as a single Eligible Account.
(c) Funds in the Collection Account and the Distribution
Accounts may be invested in Permitted Investments in accordance with the
provisions of Section 3.9. The Master Servicer shall give written notice to the
Trustee of the location and account number of the Collection Account and shall
notify the Trustee in writing prior to any subsequent change thereof.
SECTION 3.7. Permitted Withdrawals from the Collection
Account.
The Master Servicer may make withdrawals from the Collection
Account only as described below (the order set forth below not constituting an
order of priority for such withdrawals):
(i) to remit to the Trustee, for deposit in the REMIC I
Distribution Account, the amounts required to be
deposited in the REMIC I Distribution Account
pursuant to Section 3.7;
(ii) to pay or reimburse the Fiscal Agent, the Trustee,
the Master Servicer and the Special Servicers (in
that order) for Advances and for the portion of the
Advance Interest Amount related to such Advances
being reimbursed (to the extent that such portion of
such Advance Interest Amount exceeds Default
Interest retained by the Master Servicer, the
Special Servicers, the Trustee or the Fiscal Agent,
as the case may be); provided,
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however, the right of the Master Servicer, the
Trustee, the Fiscal Agent or a Special Servicer to
reimburse themselves pursuant to this clause (ii)
being limited to either (x) any collections on or in
respect of the particular Mortgage Loan or REO
Property respecting which each such Advance was
made, or (y) any other amounts in the Collection
Account in the event that such Advances have been
deemed to be Nonrecoverable Advances or are not
recovered from recoveries in respect of the related
Mortgage Loan or REO Property after a Final Recovery
Determination; provided further, however, that, in
the case of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan, amounts
recoverable with respect to Property Advances and
related Advance Interest Amounts pursuant to clauses
(x) and (y) shall be limited to the Trust Fund's
proportionate share (taking into account the
outstanding principal amount of the Additional
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note, if any);
(iii) to pay on or before each Remittance Date to the
Master Servicer and each Special Servicer, as
applicable, as compensation, the unpaid Servicing
Fee and Special Servicing Fee, respectively, to be
paid, in the case of the Servicing Fee, from
interest received on the related Mortgage Loans, and
to pay from time to time, to the Master Servicer any
interest or investment income earned on funds
deposited in the Collection Account, and to pay to
the Master Servicer or each Special Servicer, as
applicable, any other amounts constituting Servicing
Compensation payable thereto (it being understood
that any Special Servicing Fee with respect to the
Group 1 Mortgage Loan will be payable first from
payments to the ▇▇▇▇▇▇ B Note and then from the
Trust Fund);
(iv) to pay on or before each Distribution Date to the
Depositor, the Mortgage Loan Seller, a purchaser of
any Specially Serviced Mortgage Loan or REO Property
pursuant to Section 3.20, the Master Servicer or a
Special Servicer, as the case may be, with respect
to each Mortgage Loan or REO Property that has
previously been purchased or repurchased by it
pursuant to Section 2.3(d), 2.3(e), Section 3.20 or
Section 9.1, all amounts received thereon during the
related Collection Period and subsequent to the
effective date of such purchase or repurchase.
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(v) to the extent not reimbursed or paid pursuant to any
other clause of this Section 3.7, to reimburse or
pay the Master Servicer, each Special Servicer, the
Trustee, the Depositor and the Fiscal Agent for
unpaid items incurred by or on behalf of such Person
pursuant to Section 3.12, Section 3.14(c), Section
3.19(a), (b) and (c), Section 3.20(a), 6.3, 7.4,
8.5(d) or Section 10.7, or any other provision of
this Agreement pursuant to which such Person is
entitled to reimbursement or payment from the Trust
Fund, in each case only to the extent reimbursable
under such Section, it being acknowledged that this
clause (v) shall not be deemed to modify the
substance of any such Section, including the
provisions of such Section that set forth the extent
to which one of the foregoing Persons is or is not
entitled to payment or reimbursement;
(vi) to deposit in one or more separate, non-interest
bearing accounts any amount reasonably determined by
the Trustee to be necessary to pay any applicable
federal, state or local taxes imposed on REMIC I,
REMIC II and REMIC III under the circumstances and
to the extent described in Section 4.7;
(vii) to withdraw any amount deposited into the Collection
Account that was not required to be deposited
therein or that is expressly payable therefrom
(without duplication);
(viii) to pay or reimburse the Fiscal Agent, the Trustee
and the Master Servicer (in that order) for P&I
Advances (without interest) made with respect to any
Mortgage Loan on any Determination Date to the
extent that all or a portion of the payment of
principal of or interest on such Mortgage Loan as to
which such P&I Advance was made is collected on or
prior to the related Remittance Date;
(ix) to pay on or before each Remittance Date to the
Trustee for deposit into the REMIC I Distribution
Account an amount equal to the Trustee Fee; or
(x) to clear and terminate the Collection Account
pursuant to Section 9.1.
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The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan-by-Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Collection Account pursuant to subclauses
(ii) - (viii) above.
The Master Servicer shall pay to the Trustee, the Fiscal
Agent or the Special Servicers from the Collection Account (to the extent
permitted by clauses (i)-(viii) above) amounts permitted to be paid to the
Trustee, the Fiscal Agent or the Special Servicers therefrom, promptly upon
receipt of a certificate of a Responsible Officer of the Trustee, an officer of
the Fiscal Agent or a Servicing Officer of a Special Servicer, as applicable,
describing the item and amount to which the Trustee, the Fiscal Agent or the
applicable Special Servicer is entitled. The Master Servicer may rely
conclusively on any such certificate and shall have no duty to recalculate the
amounts stated therein.
The Trustee, the Fiscal Agent, the Special Servicer and the
Master Servicer shall in all cases have a right prior to the Certificateholders
to any funds on deposit in the Collection Account from time to time for the
reimbursement or payment of Servicing Compensation, the Trustee Fee, Advances
(subject to the limitation set forth in Section 3.7(ii)) and their respective
expenses (including Advance Interest Amounts) hereunder to the extent such
expenses are to be reimbursed or paid from amounts on deposit in the Collection
Account pursuant to this Agreement.
SECTION 3.8. Remittance of Special Reporting and
Inspection Fee.
The Master Servicer shall remit from amounts paid to it as
the Servicing Fee to the Group 2 Special Servicer on or before each Remittance
Date, the unpaid Special Reporting and Inspection Fee; provided that, the
obligation of the Master Servicer to remit such Special Reporting and
Inspection Fee shall be limited to the extent that the Master Servicer shall
have received its Servicing Fee with respect to the applicable Mortgage Loan on
such Remittance Date. In the event that the Master Servicer shall not have
received all of its Servicing Fee on or prior to a Remittance Date the
obligation of the Master Servicer to remit such Special Reporting and
Inspection Fee shall be reduced in the same proportion as the due and unpaid
Servicing Fee bears to the Servicing Fee payable with respect to such
Remittance Date. Upon the receipt of any Servicing Fee that was unpaid on the
Remittance Date when due, the Master Servicer shall pay to the Group 2 Special
Servicer its proportionate share of the amounts so received.
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SECTION 3.9. Investment of Funds in the Collection
Account and the Reserve Accounts.
(a) The Master Servicer (or with respect to any REO Account,
the applicable Special Servicer) may direct any depository institution
maintaining the Collection Account, any REO Account or (subject to applicable
laws and the related Mortgage Loan Documents) any Reserve Accounts (each, for
purposes of this Section 3.9, an "Investment Account") to invest the funds in
such Investment Account in one or more Permitted Investments that bear interest
or are sold at a discount, and that mature, unless payable on demand, no later
than the Business Day preceding the date on which such funds are required to be
withdrawn from such Investment Account pursuant to this Agreement. Any
direction by the Master Servicer (or with respect to an REO Account, the
applicable Special Servicer) to invest funds on deposit in an Investment
Account shall be in writing and shall certify that the requested investment is
a Permitted Investment which matures at or prior to the time required hereby or
is payable on demand. In the case of any Reserve Account, the Master Servicer
shall act upon the written request of the related Borrower or Manager to the
extent the Master Servicer is required to do so under the terms of the related
Mortgage Loan, provided that in the absence of appropriate written instructions
from such Borrower or Manager meeting the requirements of this Section 3.9, the
Master Servicer shall have no obligation to, but will be entitled to, direct
the investment of funds in such Reserve Accounts. In no event shall the Trust
Fund have any right to funds in a Reserve Account or earnings thereon except as
a secured party. All such Permitted Investments shall be held to maturity,
unless payable on demand. Any investment of funds in an Investment Account
shall be made in the name of the Trustee (in its capacity as such) or in the
name of a nominee of the Trustee. The Trustee shall have sole control (except
with respect to investment direction which shall be in the sole control of the
Master Servicer or the applicable Special Servicer, as applicable, as an
independent contractor to the Trust Fund) over each such investment and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the Trustee or its agent (which shall initially be the
Master Servicer), together with any document of transfer, if any, necessary to
transfer title to such investment to the Trustee or its nominee. The Trustee
shall have no responsibility or liability with respect to the investment
directions of the Master Servicer or the applicable Special Servicer or any
losses resulting therefrom, whether from Permitted Investments or otherwise. In
the event amounts on deposit in an Investment Account are at any time invested
in a Permitted Investment payable on demand, the Master Servicer or the
applicable Special Servicer, as applicable, shall:
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(x) consistent with any notice required to be
given thereunder, demand that payment
thereon be made on the last day such
Permitted Investment may otherwise mature
hereunder in an amount equal to the lesser
of (1) all amounts then payable thereunder
and (2) the amount required to be withdrawn
on such date; and
(y) demand payment of all amounts due
thereunder promptly upon determination by
the Master Servicer or the applicable
Special Servicer, as applicable, that such
Permitted Investment would not constitute a
Permitted Investment in respect of funds
thereafter on deposit in the related
Investment Account.
(b) All income and gain realized from investment of funds
deposited in the Collection Account shall be for the benefit of the Master
Servicer and all income and gain realized from investment of funds deposited in
any REO Account shall be for the benefit of the applicable Special Servicer and
may be withdrawn by the Master Servicer or the applicable Special Servicer, as
applicable, from time to time in accordance with Section 3.7 and Section
3.18(b), as applicable. The Master Servicer shall deposit from its own funds in
the Collection Account the amount of any loss incurred in respect of any such
Permitted Investment immediately upon realization of such loss and each Special
Servicer shall deposit from its own funds in any REO Account maintained thereby
the amount of any loss incurred in respect of any such Permitted Investment
immediately upon realization of such loss. The income and gain realized from
investment of funds deposited in any Reserve Account shall be applied from time
to time in accordance with the terms of the Mortgage Loan or applicable law
and, in the event the related Mortgage Loan Documents provide that the lender
or mortgagee thereunder is entitled to receive or retain such income and gain,
the Master Servicer shall be entitled to receive and retain such income or gain
as additional servicing compensation.
(c) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may, and upon the request of Holders of
Certificates representing a majority of the aggregate Voting Rights of any
Class shall, take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
proceedings. In the event the Trustee takes any such action, the Trust Fund
shall pay or reimburse the Trustee for all reasonable
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out-of-pocket expenses, disbursements and advances incurred or made by the
Trustee in connection therewith. In the event that the Trustee does not take
any such action, the Master Servicer may take such action at its own cost and
expense.
SECTION 3.10. Maintenance of Insurance Policies and
Errors and Omissions and Fidelity
Coverage in Respect of Group 2 Mortgage
Loans.
(a) The Master Servicer on behalf of the Trustee, as
mortgagee, shall use its best efforts in accordance with the Group 2 Servicing
Standard to cause the related Borrower to maintain for each Group 2 Mortgage
Loan (other than REO Mortgage Loans), and if the Borrower does not so maintain,
shall itself maintain (subject to the provisions of this Agreement concerning
Nonrecoverable Advances) to the extent the Trustee as mortgagee has an
insurable interest and to the extent available at commercially reasonable
rates, (A) fire and hazard insurance with extended coverage on the related
Mortgaged Property in an amount which is at least equal to the lesser of (i)
100% of the then "full replacement cost" of the improvements and equipment
(excluding foundations, footings and excavation costs), without deduction for
physical depreciation, and (ii) the outstanding principal balance of the
related Mortgage Loan (or, in the case of the Franklin Mill Loan, the ▇▇▇▇▇▇▇▇
▇▇▇▇▇ Loan together with the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note) (but in any event
no less than such other amount as is necessary to prevent any reduction in such
policy by reason of the application of co-insurance and to prevent the Trustee
thereunder from being deemed to be a co-insurer), in each case with a
replacement cost rider, (B) insurance providing coverage against 18 months of
rent interruptions (except that in the case of the Mortgage Loans bearing Loan
Numbers 1, 2, 3, 4, 5, 6, 7, 11, 12 and 13, such insurance shall provide
coverage against 12 months of rent interruptions and, in the case of the
Mortgage Loans bearing Loan Numbers 8, 9 and 10, such insurance shall provide
coverage against 24 months of rent interruptions) and (C) such other insurance
(including windstorm, earthquake and public liability insurance), in each case
as required in the related Mortgage Loan Documents. The Group 2 Special
Servicer or NOM Special Servicer, as applicable, shall obtain, to the extent
available at commercially reasonable rates, fire and hazard insurance from a
Qualified Insurer with extended coverage on each REO Property relating to a
Group 2 Mortgage Loan in an amount which is at least equal to 100% of the then
"full replacement cost" of the improvements and equipment (excluding
foundations, footings and excavation costs), without deduction for physical
depreciation. The Group 2 Special Servicer or NOM Special Servicer, as
applicable, shall with respect to each REO Property relating to a Group 2
Mortgage Loan, obtain from a Qualified Insurer, to the extent available at
commercially reasonable rates, (A) public liability insurance providing such
coverage
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against such risks as the Master Servicer, the Group 2 Special Servicer or the
NOM Special Servicer, as applicable, determines, consistent with the related
Mortgage and the Group 2 Servicing Standard, to be in the best interests of the
Trust Fund, and shall cause to be maintained with respect to each REO Property
(B) insurance providing coverage against 18 months of rent interruptions, and
(C) such other insurance, in each case as required in the related Group 2
Mortgage Loan. In the case of any insurance otherwise required to be maintained
pursuant to this section that is not being so maintained because the Master
Servicer, the Group 2 Special Servicer or the NOM Special Servicer, as
applicable, has deemed that it is not available at commercially reasonable
rates, the Master Servicer, the Group 2 Special Servicer or the NOM Special
Servicer, as applicable, shall deliver an Officer's Certificate to the Trustee
detailing the steps that the Master Servicer, the Group 2 Special Servicer or
the NOM Special Servicer, as applicable, took in seeking such insurance and the
factors which led to its determination that such insurance is not so available.
Any amounts collected by the Master Servicer, the Group 2 Special Servicer or
the NOM Special Servicer, as applicable, under any such policies (other than
amounts to be applied to the restoration or repair of the related Mortgaged
Property or amounts to be released to the Borrower in accordance with the terms
of the related Mortgage) shall be deposited into the Collection Account
pursuant to Section 3.6, subject to withdrawal pursuant to Section 3.7. It is
understood and agreed that no windstorm, earthquake or other additional
insurance other than flood insurance is to be required of any Borrower or to be
maintained by the Master Servicer, the Group 2 Special Servicer or the NOM
Special Servicer unless the terms of the related Mortgage Loan Documents
require the related Borrower to maintain such other insurance or if otherwise
required by such applicable laws and regulations as shall at any time be in
force. If the Mortgaged Property related to a Group 2 Mortgage Loan is located
in a federally designated special flood hazard area, the Master Servicer will
use its best efforts in accordance with the Group 2 Servicing Standard to
cause the related Borrower, to the extent required under the related Mortgage
Loan Documents, to maintain or, if such Borrower defaults in its obligation to
do so, will itself obtain (subject to the provisions of this Agreement
concerning Nonrecoverable Advances) flood insurance in respect thereof to the
extent available at commercially reasonable rates. Such flood insurance shall
be in an amount equal to the lesser of (i) the unpaid principal balance of the
related Group 2 Mortgage Loan and (ii) the maximum amount of such insurance
required by the terms of the related Mortgage and as is available for the
related property under the national flood insurance program (assuming that the
area in which such property is located is participating in such program). If
an REO Property is located in a federally designated special flood hazard area,
the Group 2 Special Servicer or the NOM Special Servicer, as applicable, will
obtain flood insurance in respect thereof providing substantially the same
coverage as described in the preceding
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sentences. If at any time during the term of this Agreement a recovery under a
flood or fire and hazard insurance policy in respect of an REO Property is not
available but would have been available if such insurance were maintained
thereon in accordance with the standards applied to Mortgaged Properties
described herein but the applicable Special Servicer has not arranged for such
insurance, the Group 2 Special Servicer or the NOM Special Servicer, as
applicable, shall either (i) immediately deposit into the Collection Account
from its own funds the amount that would have been recovered or (ii) apply to
the restoration and repair of the property from its own funds the amount that
would have been recovered, if such application would be consistent with the
Group 2 Servicing Standard; provided, however, that the Group 2 Special
Servicer and the NOM Special Servicer shall not be responsible for any amount
specified in clause (i) or (ii) of this sentence resulting from (x) an
insurer's refusal or inability to pay a claim or (y) the failure of the Master
Servicer to make any Property Advance for the costs of maintaining such
insurance (whether due to a determination that such a Property Advance would be
a Nonrecoverable Advance or otherwise) . Costs to the Master Servicer of
maintaining insurance policies pursuant to this Section 3.10 shall be paid by
the Master Servicer as a Property Advance if, in the case of an REO Mortgage
Loan, they cannot be paid out of available income from the related REO Property
and shall be reimbursable to the Master Servicer with interest at the
Reimbursement Rate to the extent provided in Section 3.7.
Each of the Master Servicer, the Group 2 Special Servicer and
the NOM Special Servicer agrees to prepare and present, on behalf of itself,
the Trustee and the Certificateholders, claims under each related insurance
policy maintained by it pursuant to this Section 3.10(a) in a timely fashion in
accordance with the terms of such policy and to take such reasonable steps as
are necessary to receive payment or to permit recovery thereunder.
The Master Servicer (or with respect to any REO Property
relating to a Group 2 Mortgage Loan, the Group 2 Special Servicer or NOM
Special Servicer, as applicable) shall require that all insurance policies
required hereunder shall name the Trustee or the Master Servicer (or, with
respect to any REO Property relating to a Group 2 Mortgage Loan, the Group 2
Special Servicer or NOM Special Servicer, as applicable), on behalf of the
Trustee as the mortgagee, as loss payee (or with respect to any REO Property
relating to a Group 2 Mortgage Loan, as named insured) and that all such
insurance policies require that 30 days' notice be given to the Master Servicer
or the applicable Special Servicer before termination to the extent required by
the related Mortgage Loan Documents.
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(b) (i) If the Master Servicer, Group 2 Special Servicer or
NOM Special Servicer, as applicable, obtains and maintains a blanket insurance
policy with a Qualified Insurer at its own expense insuring against fire and
hazard losses, insurance providing coverage against 18 months of rent
interruptions (or 12-month rent interruptions in the case of the Mortgage Loans
bearing Loan Numbers 1, 2, 3, 4, 5, 6, 7, 11, 12 and 13 (unless the related
Mortgaged Property has become an REO Property in which event 18-month rent
interruption coverage shall be provided) or 24-month rent interruptions in the
case of the Mortgage Loans bearing Loan Numbers 8, 9 and 10) or other required
insurance on all of the Group 2 Mortgage Loans serviced or specially serviced
by it, it shall conclusively be deemed to have satisfied its obligations
concerning the maintenance of such insurance coverage set forth in Section
3.10(a), it being understood and agreed that such policy may contain a
deductible clause, in which case the Master Servicer, Group 2 Special Servicer
or NOM Special Servicer, as applicable, shall, in the event that (i) there
shall not have been maintained on one or more of the related Mortgaged
Properties a policy otherwise complying with the provisions of Section 3.10(a),
and (ii) there shall have been one or more losses which would have been covered
by such a policy had it been maintained, immediately deposit into the
Collection Account from its own funds the amount not otherwise payable under
the blanket policy because of such deductible clause to the extent that any
such deductible exceeds the deductible limitation that pertained to the related
Mortgage Loan, or, in the absence of such deductible limitation, the deductible
limitation which is consistent with the Servicing Standard. In connection with
its activities as Master Servicer, Group 2 Special Servicer or NOM Special
Servicer hereunder, as applicable, the Master Servicer, the Group 2 Special
Servicer and the NOM Special Servicer each agrees to prepare and present, on
behalf of itself, the Trustee and Certificateholders, claims under any such
blanket policy which it maintains in a timely fashion in accordance with the
terms of such policy and to take such reasonable steps as are necessary to
receive payment or permit recovery thereunder.
(ii) If the Master Servicer, the Group 2 Special Servicer or
the NOM Special Servicer, as applicable, causes any Mortgaged Property or REO
Property related to a Group 2 Mortgage Loan to be covered by a master force
placed insurance policy, which policy is issued by a Qualified Insurer and
provides no less coverage in scope and amount for such Mortgaged Property or
REO Property than the insurance required to be maintained pursuant to Section
3.10(a), the Master Servicer, Group 2 Special Servicer or NOM Special Servicer
shall conclusively be deemed to have satisfied its obligations to maintain
insurance pursuant to Section 3.10(a). Such policy may contain a deductible
clause, in which case the Master Servicer, Group 2 Special Servicer or NOM
Special Servicer, as applicable, shall, in the event that (i) there shall not
have been maintained on the related Mortgaged Property or REO
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Property a policy otherwise complying with the provisions of Section 3.10(a),
and (ii) there shall have been one or more losses which would have been covered
by such a policy had it been maintained, immediately deposit into the
Collection Account from its own funds the amount not otherwise payable under
such policy because of such deductible to the extent that any such deductible
exceeds the deductible limitation that pertained to the related Group 2
Mortgage Loan, or, in the absence of any such deductible limitation, the
deductible limitation which is consistent with the Group 2 Servicing Standard.
(c) Each of the Master Servicer, Group 2 Special Servicer and
NOM Special Servicer shall maintain with a Qualified Insurer a fidelity bond in
the form and amount that would meet the servicing requirements of prudent
institutional commercial mortgage loan servicers. The Master Servicer, Group 2
Special Servicer or NOM Special Servicer, as applicable, shall be deemed to
have complied with this provision if one of its respective Affiliates has such
fidelity bond coverage and, by the terms of such fidelity bond, the coverage
afforded thereunder extends to the Master Servicer, the Group 2 Special
Servicer or the NOM Special Servicer, as applicable. In addition, each of the
Master Servicer, the Group 2 Special Servicer and the NOM Special Servicer
shall keep in force during the term of this Agreement a policy or policies of
insurance with a Qualified Insurer covering loss occasioned by the errors and
omissions of its officers and employees in connection with its obligations to
service the Group 2 Mortgage Loans hereunder in the form and amount that would
meet the servicing requirements of prudent institutional commercial mortgage
loan servicers. Each of the Master Servicer, the Group 2 Special Servicer and
the NOM Special Servicer shall cause each and every sub-servicer for it to
maintain, or cause to be maintained by any agent or contractor servicing any
Mortgage Loan on behalf of such subservicer, a fidelity bond and an errors and
omissions insurance policy which satisfy the requirements for the fidelity bond
and the errors and omissions policy to be maintained by the Master Servicer,
the Group 2 Special Servicer or the NOM Special Servicer pursuant to this
Section 3.10(c). All fidelity bonds and policies of errors and omissions
insurance obtained under this Section 3.10(c) shall be issued by a Qualified
Insurer.
SECTION 3.11. Enforcement of Due-On-Sale Clauses;
Assumption Agreements in Respect of
Group 2 Mortgage Loans.
(a) If any Group 2 Mortgage Loan contains a provision in the
nature of a "due-on-sale" clause, which, by its terms:
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(i) provides that such Group 2 Mortgage Loan shall (or
may at the related mortgagee's option) become due
and payable upon the sale or other transfer of an
interest in the related Mortgaged Property, or
(ii) provides that such Group 2 Mortgage Loan may not be
assumed without the consent of the related mortgagee
in connection with any such sale or other transfer,
then, for so long as such Group 2 Mortgage Loan is included in the Trust Fund,
the Master Servicer, the Group 2 Special Servicer or the NOM Special Servicer,
as applicable, on behalf of the Trust Fund, shall enforce such provision to the
extent permitted under the terms of such Group 2 Mortgage Loan, applicable law
and governmental regulations, unless such provision is not enforceable under
applicable law or such enforcement is reasonably likely to result in
meritorious legal action by the related Borrower or except to the extent that
the Master Servicer, the Group 2 Special Servicer or the NOM Special Servicer,
as applicable, acting in accordance with the Group 2 Servicing Standard,
determines that such enforcement would not be in the best interests of the
Trust Fund. Subject to the foregoing, the Master Servicer, the Group 2 Special
Servicer or the NOM Special Servicer, as applicable, is authorized to take or
enter into an assumption agreement from or with the Person to whom such
Mortgaged Property has been or is about to be conveyed, or to release the
original related Borrower from liability upon such Mortgage Loan and substitute
the new Borrower as obligor thereon. Prior to waiving any "due-on-sale" clause,
taking or entering into any assumption agreement or permitting the release of a
Borrower and substitution of a new Borrower with respect to any Mortgage Loan,
the Master Servicer or NOM Special Servicer , as applicable, shall notify the
Group 2 Special Servicer and offer the Group 2 Special Servicer a opportunity
during a ten-day period prior to taking any such action to confer with them as
to advisability of such action (it being understood that neither the Master
Servicer nor the NOM Special Servicer shall have any obligation to follow any
instructions or directions given to them by the Group 2 Special Servicer with
respect to such actions). To the extent permitted by law, the Master Servicer,
the Group 2 Special Servicer or the NOM Special Servicer, as applicable, shall
enter into an assumption or substitution agreement only if the credit status of
the prospective new Borrower is in compliance with (x) the Master Servicer's,
the Group 2 Special Servicer's or the NOM Special Servicer's, as applicable,
regular commercial mortgage origination or servicing standards and criteria,
(y) the terms of the related Group 2 Mortgage Loan and (z) the Group 2
Servicing Standard. The Master Servicer, the Group 2 Special Servicer or the
NOM Special Servicer, as applicable, shall notify the Trustee that any such
assumption or
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substitution agreement has been completed by forwarding to the Trustee the
original of such agreement, which document shall be added to the related
Mortgage File and shall, for all purposes, be considered a part of such
Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. In connection with any such assumption or
substitution agreement, the Mortgage Rate, principal amount and other material
payment terms (including any cross-collateralization and cross-default
provisions) of such Group 2 Mortgage Loan pursuant to the related Note and
Mortgage shall not be changed, other than in connection with a default or
reasonably foreseeable default with respect to the Mortgage Loan. Assumption
Fees collected by the Master Servicer, the Group 2 Special Servicer or the NOM
Special Servicer, as applicable, for entering into an assumption or
substitution agreement will be retained by the Master Servicer, the Group 2
Special Servicer or the NOM Special Servicer, as applicable, as additional
servicing compensation but only if collection of such fees will not result in
the Mortgage Loan failing to qualify as a "qualified mortgage" under the REMIC
Provisions. Notwithstanding the foregoing, the Master Servicer, Group 2 Special
Servicer or NOM Special Servicer may consent to the assumption of a Mortgage
Loan by a prospective new Borrower imposed by a court having jurisdiction in a
bankruptcy proceeding involving the related Mortgaged Property.
(b) If any Group 2 Mortgage Loan contains a provision
in the nature of a "due-on-encumbrance" clause, which, by its terms:
(i) provides that such Group 2 Mortgage Loan shall (or
may at the related mortgagee's option) become due
and payable upon the creation of any lien or other
encumbrance on such Mortgaged Property, or
(ii) requires the consent of the related mortgagee to the
creation of any such lien or other encumbrance on
such Mortgaged Property,
then, for so long as such Group 2 Mortgage Loan is included in the Trust Fund,
the Master Servicer, the Group 2 Special Servicer or the NOM Special Servicer,
as applicable, on behalf of the Trust Fund, shall enforce such provision and in
connection therewith shall (x) accelerate the payments due on such Mortgage
Loan, or (y) withhold its consent to the creation of any such lien or other
encumbrance, as applicable, except, in each case, to the extent that the Master
Servicer, the Group 2 Special Servicer or the NOM Special Servicer, as
applicable, acting in accordance with the Group 2 Servicing Standard,
determines that such enforcement would not be in the best interests of the
Trust Fund. Notwithstanding the foregoing, the Master Servicer,
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the Group 2 Special Servicer or the NOM Special Servicer, as applicable, may
forbear from enforcing any due-on-encumbrance provision in connection with any
junior or senior lien on the Mortgaged Property imposed by a court having
jurisdiction in connection with any bankruptcy proceeding involving the
Mortgaged Property. Prior to determining not to enforce any
"due-on-encumbrance" clause with respect to any Mortgage Loan, the Master
Servicer or NOM Special Servicer , as applicable, shall notify the Group 2
Special Servicer and offer the Group 2 Special Servicer a opportunity during a
ten-day period prior to taking such action to confer with them as to
advisability of such action (it being understood that neither the Master
Servicer nor the NOM Special Servicer shall have any obligation to follow any
instructions or directions given to them by the Group 2 Special Servicer with
respect to such action).
(c) Nothing in this Section 3.11 shall constitute a waiver of
the Trustee's right, as the mortgagee of record, to receive notice of any
assumption of a Group 2 Mortgage Loan, any sale or other transfer of the
related Mortgaged Property or the creation of any lien or other encumbrance
with respect to such Mortgaged Property.
(d) In connection with the taking of, or the failure to take,
any action pursuant to this Section 3.11, the Master Servicer, the Group 2
Special Servicer or the NOM Special Servicer, as applicable, shall not agree to
modify, waive or amend, and no assumption or substitution agreement entered
into pursuant to Section 3.11(a) shall contain any terms that are different
from, any term of any Group 2 Mortgage Loan or the related Note or Mortgage.
SECTION 3.12. Realization Upon Group 2 Mortgage Loans.
(a) With respect to any Group 2 Mortgage Loan that becomes a
Specially Serviced Mortgage Loan, subject to any other applicable terms of this
Agreement, the applicable Special Servicer shall determine, in accordance with
the Group 2 Servicing Standard, whether to grant a modification, waiver or
amendment of the terms of such Specially Serviced Mortgage Loan, commence
foreclosure proceedings or attempt to sell such Specially Serviced Mortgage
Loan with reference to which course of action is reasonably likely to produce a
greater recovery on a present value basis with respect to such Specially
Serviced Mortgage Loan. Contemporaneously with the Mortgage Loan becoming a
Required Appraisal Loan, the Group 2 Special Servicer, in the case of a Group 2
Mortgage Loan other than the NOM Loan, or the Master Servicer, in the case of
the NOM Loan, shall promptly order an Updated Appraisal of the Mortgaged
Property securing such Mortgage Loan, except to the extent such appraisal had
been previously obtained within the prior 12
110
months. The Group 2 Special Servicer shall provide the Master Servicer with a
copy of the Updated Appraisal obtained in respect of a Group 2 Mortgage Loan
other than the NOM Loan (promptly after the Group 2 Special Servicer's receipt
thereof). The Master Servicer shall provide the Group 2 Special Servicer and
the NOM Special Servicer with copies of any Updated Appraisal obtained in
respect of the NOM Loan (promptly after the Master Servicer's receipt thereof).
Following a default by a Borrower in the payment of a Balloon
Payment, the Special Servicer may grant successive extensions; provided,
however, the Special Servicer shall not grant any extension that would extend
the Maturity Date beyond the date occurring on or after December 15, 2027.
(b) In connection with any foreclosure or other acquisition
with respect to a Group 2 Mortgage Loan, the Master Servicer shall, at the
direction of applicable Special Servicer, pay the costs and expenses in any
such proceedings as an Advance unless the Master Servicer determines, in its
good faith judgment, that such Advance would constitute a Nonrecoverable
Advance, and the applicable Special Servicer shall in no event be in default
hereunder by reason of any failure to perform its duties because the Master
Servicer failed to make any such Advance. The Master Servicer shall be entitled
to reimbursement of Advances (with interest at the Reimbursement Rate) made
pursuant to the preceding sentence to the extent permitted by Section 3.7(ii).
If the applicable Special Servicer elects to proceed with a
non-judicial foreclosure in accordance with the laws of the state where the
related Mortgaged Property is located, such Special Servicer shall not be
required to pursue a deficiency judgment against the related Borrower or any
other liable party if the laws of such state do not permit such a deficiency
judgment after a non-judicial foreclosure or if such Special Servicer
determines, in its best judgment, that the likely recovery if a deficiency
judgment is obtained will not be sufficient to warrant the cost, time, expense
and/or exposure of pursuing such a deficiency judgment and such determination
is evidenced by an Officer's Certificate delivered to the Trustee.
In the event that title to any Mortgaged Property is acquired
in foreclosure or by deed in lieu of foreclosure, the deed or certificate of
sale shall be issued to the Trustee, or to its nominee (which shall not include
the Master Servicer or a Special Servicer) or a separate trustee or co-trustee
on behalf of the Trustee as holder of the REMIC I Regular Interests and
Certificateholders. Notwithstanding any such acquisition of title and
cancellation of the related Group 2 Mortgage Loan, such Group 2 Mortgage Loan
shall (except for purposes of Section 9.1) be considered to be
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a Mortgage Loan held in the Trust Fund until such time as the related REO
Property shall be sold by the Trust Fund and the Scheduled Principal Amount of
each REO Mortgage Loan shall be reduced by any Net REO Proceeds allocated to
principal. Consistent with the foregoing, for purposes of all calculations
hereunder, so long as such Mortgage Loan shall be considered to be an
outstanding Mortgage Loan:
(i) it shall be assumed that, notwithstanding that the
indebtedness evidenced by the related Note shall
have been discharged, such Note and, for purposes of
determining the Scheduled Principal Amount thereof,
the related amortization schedule in effect at the
time of any such acquisition of title, remain in
effect; and
(ii) Net REO Proceeds received in any month shall be
applied to amounts that would have been payable
under the related Note in accordance with the terms
of such Note. In the absence of such terms, Net REO
Proceeds shall be deemed to have been received first
in payment of the accrued interest that remained
unpaid on the date that the related REO Property was
acquired by the Trust Fund; second in respect of the
delinquent principal installments that remained
unpaid on such date; and thereafter, Net REO
Proceeds received in any month shall be applied to
the payment of installments of principal and accrued
interest on such Mortgage Loan deemed to be due and
payable in accordance with the terms of such Note
and such amortization schedule. If such Net REO
Proceeds exceed the Monthly Payment then payable,
the excess shall be treated as a Principal
Prepayment received in respect of such Mortgage
Loan.
(c) Notwithstanding any provision to the contrary, neither
the Group 2 Special Servicer nor the NOM Special Servicer shall acquire for the
benefit of the Trust Fund any personal property pursuant to this Section 3.12
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 such Special Servicer for the
benefit of the Trust Fund; or
(ii) such Special Servicer shall have requested and
received an Opinion of Counsel (which opinion shall
be an expense of the Trust Fund) to the effect that
the holding of such personal property by REMIC I
will not cause the imposition of a tax on
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REMIC I, REMIC II or REMIC III under the REMIC
Provisions or cause REMIC I, REMIC II or REMIC III
to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(d) Notwithstanding any provision to the contrary in this
Agreement, neither the Group 2 Special Servicer nor the NOM Special Servicer
shall, on behalf of the Trust Fund, obtain title to any direct or indirect
partnership interest or other equity interest in any Borrower pledged pursuant
to any pledge agreement unless such Special Servicer shall have requested and
received an Opinion of Counsel (which opinion shall be an expense of the Trust
Fund) to the effect that the holding of such partnership or other equity
interest by the Trust Fund will not cause the imposition of a tax on REMIC I,
REMIC II or REMIC III under the REMIC Provisions or cause REMIC I, REMIC II or
REMIC III to fail to qualify as a REMIC at any time that any Certificate is
outstanding.
(e) Notwithstanding any provision to the contrary contained
in this Agreement, neither the Group 2 Special Servicer nor the NOM Special
Servicer shall, on behalf of the Trust Fund, obtain title to a Mortgaged
Property as a result of or in lieu of foreclosure or otherwise obtain title to
any direct or indirect partnership interest or other equity interest in any
Borrower pledged pursuant to a pledge agreement and thereby be the beneficial
owner of a Mortgaged Property, and shall not otherwise acquire possession of,
or take any other action with respect to, any Mortgaged Property if, as a
result of any such action, the Trustee, for the Trust Fund or the
Certificateholders, would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless such Special Servicer has previously determined
in accordance with the Servicing Standard, based on an updated environmental
assessment report prepared by an Independent Person who regularly conducts
environmental audits, that:
(A) such Mortgaged Property is in compliance with
applicable environmental laws or, if not, after consultation with an
environmental consultant, that it would be in the best economic
interest of the Trust Fund to take such actions as are necessary to
bring such Mortgaged Property in compliance therewith, and
(B) there are no circumstances present at such
Mortgaged Property relating to the use, management or disposal of any
Hazardous
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Materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any currently
effective federal, state or local law or regulation, or that, if any
such Hazardous Materials are present for which such action could be
required, after consultation with an environmental consultant, it
would be in the best economic interest of the Trust Fund to take such
actions with respect to such Mortgaged Property.
In the event that the environmental assessment first obtained
or updated by such Special Servicer with respect to a Mortgaged Property
indicates that such Mortgaged Property may not be in compliance with applicable
environmental laws or that Hazardous Materials may be present but does not
definitively establish such fact, such Special Servicer shall cause such
further environmental tests as such Special Servicer shall deem prudent to
protect the interests of Certificateholders to be conducted by an Independent
Person who regularly conducts such tests. Any such tests shall be deemed part
of the environmental assessment obtained by such Special Servicer for purposes
of this Section 3.12.
(f) The environmental assessment contemplated by Section
3.12(e) shall be prepared by any Independent Person who regularly conducts
environmental audits for purchasers of commercial properties located in the
same general area as the Mortgaged Property with respect to which the Group 2
Special Servicer or the NOM Special Servicer, as applicable, is ordering such
environmental assessment, as determined by such Special Servicer in a manner
consistent with the Group 2 Servicing Standard. The Master Servicer shall at
the direction of such Special Servicer advance the cost of preparation of such
environmental assessments unless the Master Servicer determines, in its good
faith judgment, that such Advance would be a Nonrecoverable Advance. The
applicable Special Servicer shall in no event be in default hereunder by reason
of any failure to perform its duties because the Master Servicer fails to make
any such Advance. The Master Servicer shall be entitled to reimbursement of
Advances (with interest at the Reimbursement Rate) made pursuant to the
preceding sentence to the extent permitted pursuant to Section 3.7.
(g) If the Group 2 Special Servicer or NOM Special Servicer,
as applicable, determines pursuant to Section 3.12(e)(A) that a Mortgaged
Property is not in compliance with applicable environmental laws but that it is
in the best economic interest of the Trust Fund to take such actions as are
necessary to bring such Mortgaged Property into compliance therewith, or if
such Special Servicer determines pursuant to Section 3.12(e)(B) that the
circumstances referred to therein relating to Hazardous Materials are present
but that it is in the best economic interest of the Trust Fund to take such
action with respect to the containment, clean-up or remediation of
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Hazardous Materials affecting such Mortgaged Property as is required by law or
regulation, such Special Servicer shall take such action as it deems to be in
the best economic interest of the Trust Fund (with due consideration to the
avoidance of "mortgagee-in-possession," "owner" or "operator" status, as set
forth in Section 3.12(e)), but only if the Trustee has mailed notice to the
Holders of the Regular Certificates of such proposed action, which notice shall
be prepared by the Special Servicer, and only if the Trustee does not receive,
within 30 days of such notification, instructions from the Holders of a
majority of the aggregate Voting Rights of such Classes directing the
applicable Special Servicer not to take such action. None of the Trustee, the
Master Servicer or the applicable Special Servicer shall be obligated to take
any action or not take any action pursuant to this Section 3.12(g) at the
direction of the Certificateholders unless the Certificateholders agree to
indemnify the Trustee, the Master Servicer and the applicable Special Servicer
with respect to such action or inaction. None of the Group 2 Special Servicer,
the NOM Special Servicer, the Master Servicer, the Trustee or the Fiscal Agent
shall be required to advance the cost of any such compliance, containment,
clean-up or remediation and such expense shall be an expense of the Trust Fund
payable out of the Collection Account.
(h) The Group 2 Special Servicer or NOM Special Servicer, as
applicable, shall report to the IRS and to the related Borrower, in the manner
required by applicable law, the information required to be reported regarding
any Mortgaged Property which is abandoned or foreclosed. Such Special Servicer
shall deliver a copy of any such report to the Trustee.
(i) The costs of any Updated Appraisal obtained pursuant to
this Section 3.12 shall be paid by the Master Servicer as an Advance and shall
be reimbursable (with interest thereon at the Reimbursement Rate) from the
Collection Account pursuant to Section 3.7.
SECTION 3.13. Trustee to Cooperate; Release of
Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt
by the Master Servicer of a notification that payment in full has been escrowed
in a manner customary for such purposes, the Master Servicer shall immediately
notify the Trustee and the Custodian by a certification (which certification
shall include a statement to the effect that all amounts received or to be
received in connection with such payment which are required to be deposited in
the Collection Account pursuant to Section 3.6(a) have been or will be so
deposited) of a Servicing Officer and shall request delivery to it of the
Mortgage File. No expenses incurred in connection with any
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instrument of satisfaction or deed of reconveyance shall be chargeable to the
Trust Fund.
From time to time upon request of the Master Servicer or the
applicable Special Servicer, and delivery to the Trustee and the Custodian of a
Request for Release, the Trustee shall promptly cause the Custodian to release
the Mortgage File (or any portion thereof) designated in such Request for
Release to the Master Servicer or the Special Servicer, as applicable. Upon
receipt of (a) such Mortgage File (or portion thereof) by the Custodian from
the Master Servicer or such Special Servicer, as applicable, or (b) in the
event of a liquidation or conversion of the related Mortgage Loan into an REO
Property, a certificate of a Servicing Officer stating that such Mortgage Loan
was liquidated and that all amounts received or to be received in connection
with such liquidation which are required to be deposited into the Collection
Account or Distribution Account have been so deposited, or that such Mortgage
Loan has become an REO Property, the Custodian shall return the Request for
Release to the Master Servicer or such Special Servicer, as applicable.
Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the applicable Special Servicer any court
pleadings, requests for trustee's sale or other documents prepared by such
Special Servicer, its agents or attorneys, necessary to the foreclosure or
trustee's sale in respect of the Mortgaged Property or to any legal action
brought to obtain judgment against any Borrower on the related Note or Mortgage
or to obtain a deficiency judgment, or to enforce any other remedies or rights
provided by such Note or Mortgage or otherwise available at law or in equity.
Each such certification shall include a request that such pleadings or
documents be executed by the Trustee and a statement as to the reason such
documents or pleadings are required and that the execution and delivery thereof
by the Trustee will not invalidate or otherwise affect the lien of the related
Mortgage, except for the termination of such a lien upon completion of the
foreclosure or trustee's sale.
SECTION 3.14. Servicing Compensation.
(a) As compensation for its activities hereunder, the Master
Servicer shall be entitled to the Servicing Fee, which shall be payable solely
from receipts on the related Mortgage Loans, and may be withheld from payments
on account of interest prior to deposit in the Collection Account, or may be
withdrawn from amounts on deposit in the Collection Account as set forth in
Section 3.7(iii). In addition, the Master Servicer shall be entitled to
receive, as additional servicing compensation, to the extent permitted by
applicable law and the related Notes and Mortgages, any late payment charges,
late fees, Default Interest, NSF check charges
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(including with respect to Specially Serviced Mortgage Loans), demand fees,
Assumption Fees, loan modification fees, extension fees, loan service
transaction fees, beneficiary statement charges, or similar items (but not
including any Prepayment Premiums), in each case to the extent received, with
respect to any Mortgage Loan that is not a Specially Serviced Mortgage Loan or
REO Mortgage Loan and not required to be deposited or retained in the
Collection Account pursuant to Section 3.6. The Master Servicer shall also be
entitled pursuant to, and to the extent provided in, Section 3.9(b) to withdraw
from the Collection Account and to receive from the Reserve Accounts (to the
extent not required to be paid to the related Borrower pursuant to the related
Mortgage Loan Documents or applicable law) any interest or other income earned
on deposits therein.
(b) The Master Servicer's rights to the portion of the
Servicing Fee equal to the Retained Servicing Interest 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. Any or all of
the Master Servicer's rights, title and interest to the Transferable Servicing
Interest (subject to the rights of the Trustee to reduce such Transferable
Servicing Interest as provided in the definition thereof) may be retained by
Midland Loan Services, L.P. or transferred to any third party at any time and
Midland Loan Services, L.P. or such third party, as applicable, shall be
entitled to receive payment thereof from the Master Servicer to the extent and
at such times as the Master Servicer is entitled to receive payment of the
Servicing Fee under this Agreement.
Except as otherwise provided herein, the Master Servicer
shall pay all expenses incurred by it in connection with its servicing
activities hereunder and the Trustee shall pay all expenses incurred by it in
connection with its activities hereunder. In addition, the Mortgage Loan Seller
shall be obligated to pay the ongoing surveillance fees of the Rating Agencies
with respect to maintaining the ratings on the Certificates.
(c) As compensation for its activities hereunder, each
Special Servicer shall be entitled to the Special Servicing Fee with respect to
each Specially Serviced Mortgage Loan for which it acts as Special Servicer,
which shall be payable from any amounts on deposit in the Collection Account as
set forth in Section 3.7(iii). Each Special Servicers' rights to the Special
Servicing Fees and the Group 2 Special Servicer's rights to its Special
Reporting and Inspection Fee may not be transferred in whole or in part except
in connection with the transfer of all of such Special Servicer's
responsibilities and obligations under this Agreement. Each Special Servicer
shall also be entitled pursuant to, and to the extent provided in, Section
3.9(b) to withdraw from
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any REO Account maintained thereby any interest or other income earned on
deposits therein.
In addition, each Special Servicer shall be entitled to
receive, as additional Servicing Compensation, to the extent permitted by
applicable law and the related Notes and Mortgages, any late payment charges,
late fees, demand fees, Default Interest, Assumption Fees, loan modification
fees, extension fees, loan service transaction fees, beneficiary statement
charges, or similar items (but not including any Prepayment Premiums), in each
case to the extent received with respect to any Specially Serviced Mortgage
Loan specially serviced by it and not required to be deposited or retained in
the Collection Account pursuant to Section 3.5.
Furthermore, the Group 2 Special Servicer and the NOM Special Servicer
shall be entitled to receive, as additional Servicing Compensation, a Principal
Recovery Fee (the "Principal Recovery Fee") equal to the product of 0.25% and
all amounts received while any applicable Group 2 Mortgage Loan was a Specially
Serviced Mortgage Loan specially serviced by it and allocable as a recovery of
principal.
Except as otherwise provided herein, the Special Servicer
shall pay all expenses incurred by it in connection with its servicing
activities hereunder.
(d) The Master Servicer, the Special Servicers and the
Trustee shall be entitled to reimbursement from the Trust Fund for the cost and
expenses specifically set forth herein as reimbursable by the Trust Fund and
for the unanticipated costs and expenses incurred by them in the performance of
their duties under this Agreement which are "unanticipated expenses incurred by
the REMIC" within the meaning of Treasury Regulations Section
1.860G-1(b)(3)(ii). Such expenses shall include, by way of example and not by
way of limitation, environmental assessments, appraisals in connection with
foreclosure, the fees and expenses of any administrative or judicial proceeding
and expenses expressly identified as reimbursable in Section 3.7(v).
(e) No provision of this Agreement or of the Certificates
shall require the Master Servicer, a Special Servicer, the Trustee or the
Fiscal Agent to expend or risk their own funds or otherwise incur any financial
liability in the performance of any of their duties hereunder or thereunder, or
in the exercise of any of their rights or powers, if, in the good faith
business judgment of the Master Servicer, the applicable Special Servicer,
Trustee or the Fiscal Agent, as the case may be, repayment of such funds would
not be ultimately recoverable from late payments, Insurance Proceeds,
Condemnation Proceeds, Net Liquidation Proceeds and other
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collections on or in respect of the Mortgage Loans, or from adequate indemnity
from other assets comprising the Trust Fund against such risk or liability.
If the Master Servicer, any Special Servicer or the Trustee
receives a request or inquiry from a Borrower, any Certificateholder or any
other Person the response to which would, in the Master Servicer's, such
Special Servicer's or the Trustee's good faith business judgment, require the
assistance of Independent legal counsel or other consultant to the Master
Servicer, any Special Servicer or the Trustee, the cost of which would not be
an expense of the Trust Fund hereunder, then the Master Servicer, any Special
Servicer or the Trustee, as the case may be, shall not be required to take any
action in response to such request or inquiry unless such Borrower or such
Certificateholder or such other Person, as applicable, makes arrangements for
the payment of the Master Servicer's, any Special Servicer's or the Trustee's
expenses associated with such counsel or other consultant (including, without
limitation, posting an advance payment for such expenses) satisfactory to the
Master Servicer, any Special Servicer or the Trustee, as the case may be, in
its sole discretion. Unless such arrangements have been made, the Master
Servicer, any Special Servicer or the Trustee, as the case may be, shall have
no liability to any Person for the failure to respond to such request or
inquiry.
SECTION 3.15. Reports to the Trustee; Collection
Account Statements.
(a) The Master Servicer shall deliver to the Paying Agent,
with a copy to the Trustee, the Group 2 Special Servicer, the Fiscal Agent and
each Rating Agency, no later than the third Business Day following each
Determination Date, (i) the Master Servicer Remittance Report with respect to
such Determination Date (which shall include, without limitation, the amount of
the Available Distribution Amount for the related Distribution Date) and (ii) a
written statement of required P&I Advances for the related Determination Date
together with the certificate and documentation required by the definition of
Nonrecoverable Advance related to any determination that any such P&I Advance
would constitute a Nonrecoverable Advance made as of such Determination Date.
(b) For so long as the Master Servicer makes deposits into
and withdrawals from the Collection Account, not later than fifteen days after
each Distribution Date, the Master Servicer shall forward to the Trustee a
statement prepared by the Master Servicer setting forth the status of the
Collection Account as of the close of business on the last Business Day of the
related Collection Period showing the aggregate amount of deposits into and
withdrawals from the Collection
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Account for each category of deposit specified in Section 3.6 and each category
of withdrawal specified in Section 3.7 for such Collection Period.
(c) The Trustee shall be entitled to rely conclusively on and
shall not be responsible for the content or accuracy of any information
provided to it by the Master Servicer or a Special Servicer pursuant to this
Agreement.
SECTION 3.16. Annual Statement as to Compliance.
The Master Servicer and each Special Servicer shall deliver
to the Trustee, the Rating Agencies and to the Depositor on or before March 31
of each year, beginning with March 31, 1999, an Officer's Certificate stating,
as to each signatory thereof, (i) that a review of the activities of the Master
Servicer or such Special Servicer, as applicable, during the preceding calendar
year (or such shorter period from the Closing Date to the end of the related
calendar year) and of its performance under this Agreement has been made under
such officer's supervision, (ii) that, to the best of such officer's knowledge,
based on such review, it has fulfilled all of its obligations under this
Agreement throughout such year (or such shorter period), or, if there has been
a default in the fulfillment of any such obligation, specifying each such
default known to such officer, the nature and status thereof and what action it
proposes to take with respect thereto, (iii) that, to the best of such
officer's knowledge, each sub-servicer has fulfilled its obligations under its
sub-servicing agreement in all material respects, or, if there has been a
material default in the fulfillment of such obligations, specifying each such
default known to such officer and the nature and status thereof, and (iv)
whether it has received any notice regarding qualification, or challenging the
status, of REMIC I, REMIC II or REMIC III as a REMIC from the IRS or any other
governmental agency or body.
SECTION 3.17. Annual Independent Public Accountants'
Servicing Report.
On or before March 31 of each year, beginning with March 31,
1999 the Master Servicer and each Special Servicer at its expense shall cause a
nationally recognized firm of Independent public accountants (who may also
render other services to the Master Servicer or such Special Servicer, as
applicable) to furnish to the Trustee, the Depositor and each Rating Agency a
statement to the effect that such firm has examined certain documents and
records, relating to the servicing of mortgage loans substantially similar to
the Mortgage Loans by the Master Servicer or such Special Servicer, as the case
may be, and that such firm is of the opinion that, on the basis of such
examination conducted substantially in compliance with the Uniform
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Single Attestation Program for Mortgage Bankers, such servicing during such
period has been conducted in compliance with agreements substantially similar
to this Agreement, except for such exceptions that, in the opinion of such
firm, the Uniform Single Attestation Program for Mortgage Bankers requires it
to report.
SECTION 3.18. Access to Certain Documentation.
(a) The Master Servicer and each Special Servicer shall
provide to any Certificateholders that are federally insured financial
institutions, the Federal Reserve Board, the FDIC and the OTS and the
supervisory agents and examiners of such boards and such corporations, and any
other governmental or regulatory body to the jurisdiction of which any
Certificateholder is subject, access to the documentation regarding the
Mortgage Loans required by applicable regulations of the Federal Reserve Board,
FDIC, OTS or any such governmental or regulatory body, such access being
afforded without charge but only upon reasonable request and during normal
business hours at the offices of the Master Servicer or the applicable Special
Servicer, as applicable.
(b) Nothing in this Section 3.18 shall detract from the
obligation of the Master Servicer or a Special Servicer to observe any
applicable law or any provisions of the Mortgage Loan Documents prohibiting
disclosure of information with respect to the Borrowers or the Mortgage Loans,
and the failure of the Master Servicer or a Special Servicer, as applicable, to
provide access as provided in this Section 3.18 as a result of such obligation
shall not constitute a breach of this Section 3.18.
SECTION 3.19. Title and Management of REO Properties
related to the Group 2 Mortgage Loans.
(a) In the event that title to any Mortgaged Property related
to the Group 2 Mortgage Loans is acquired for the benefit of Certificateholders
in foreclosure or by deed in lieu of foreclosure or otherwise, the deed or
certificate of sale shall be taken in the name of the Trustee, or its nominee
(which shall not include the Master Servicer, the Group 2 Special Servicer or
NOM Special Servicer), or a separate trustee or co-trustee, on behalf of the
Trust Fund. The applicable Special Servicer shall maintain accurate records
with respect to each related REO Property reflecting the status of taxes,
assessments and other similar items that are or may become a lien on such REO
Property and the status of insurance premiums payable with respect thereto. The
applicable Special Servicer, on behalf of the Trust Fund, shall dispose of any
REO Property by the end of the third year following the year of
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acquisition of such REO Property for purposes of Section 860G(a)(8) of the
Code, unless (i) such Special Servicer, on behalf of REMIC I, has applied for
and received an extension of such three-year period pursuant to Sections
856(e)(3) and 860G(a)(8)(A) of the Code, in which case such Special Servicer
shall sell such REO Property within the applicable extension period or (ii)
such Special Servicer seeks and subsequently receives an Opinion of Counsel
(which opinion shall be an expense of the Trust Fund payable out of the
Collection Account), addressed to such Special Servicer and the Trustee, to the
effect that the holding by the Trust Fund of such REO Property for an
additional specified period will not cause such REO Property to fail to qualify
as "foreclosure property" within the meaning of Section 860G(a)(8) of the Code
(determined without regard to the exception applicable for purposes of Section
860D(a) of the Code) at any time that any Certificate is outstanding, in which
case such Special Servicer shall sell such REO Property within such three-year
period as extended by such additional specified period subject to any
conditions set forth in such Opinion of Counsel. The applicable Special
Servicer, on behalf of the Trust Fund, shall dispose of any REO Property held
by the Trust Fund prior to the last day of the period (taking into account
extensions) within which such REO Property is required to be disposed of
pursuant to the provisions of the immediately preceding sentence in a manner
provided under Section 3.20. The applicable Special Servicer shall manage,
conserve, protect and operate each REO Property for the Certificateholders
solely for the purpose of its disposition and sale in a manner which does not
cause such REO Property to fail to qualify as "foreclosure property" within the
meaning of Section 860G(a)(8) of the Code (determined without regard to the
exception applicable for purposes of Section 860D(a)) of the Code or, except as
contemplated by Section 3.19(d), result in the receipt by REMIC I of any
"income from non-permitted assets" within the meaning of Section 860F(a)(2)(B)
of the Code or in an Adverse REMIC Event in respect of any of the REMICs.
(b) The Group 2 Special Servicer or NOM Special Servicer, as
the case may be, shall have full power and authority, subject only to the
specific requirements and prohibitions of this Agreement, to do any and all
things in connection with any REO Property as are consistent with Group 2
Servicing Standard, all on such terms and for such period as such Special
Servicer deems to be in the best interests of Certificateholders, and, in
connection therewith, the applicable Special Servicer shall agree to the
payment of management fees that are consistent with general market standards.
The Group 2 Special Servicer and the NOM Special Servicer shall each 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
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shall be entitled "LaSalle National Bank, as Trustee, in trust for Holders of
Commercial Mortgage Acceptance Corp., Commercial Mortgage Pass-Through
Certificates, Series 1997-ML1, REO Account." The applicable Special Servicer
shall be entitled to any interest or investment income earned on funds
deposited in an REO Account to the extent provided in Section 3.9(b). The
applicable Special Servicer shall deposit or cause to be deposited in the
related REO Account within one Business Day after receipt all REO Proceeds
received by it with respect to any REO Property (other than Liquidation
Proceeds and Insurance Proceeds that are to be deposited in the Collection
Account), and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of such REO Property, including:
(i) all insurance premiums and ground rents, if any, due
and payable in respect of such REO Property;
(ii) all real estate taxes and assessments in respect of
such REO Property and such other Mortgaged
Properties that may result in the imposition of a
lien thereon; and
(iii) all costs and expenses reasonable and necessary to
protect, maintain, manage, operate, repair and
restore such REO Property and such other Mortgaged
Properties, including any property management fees.
To the extent that such REO Proceeds are insufficient for the
purposes set forth in clauses (i) through (iii) above, the Master Servicer
shall make an Advance equal to the amount of such shortfall unless the Master
Servicer determines, in its good faith judgment, that such Advance would be a
Nonrecoverable Advance. The Master Servicer shall be entitled to reimbursement
of such Advances (with interest at the Reimbursement Rate) made pursuant to the
preceding sentence, to the extent permitted pursuant to Section 3.7. The
applicable Special Servicer shall remit to the Master Servicer from each REO
Account maintained by it for deposit in the Collection Account on a monthly
basis prior to the related Remittance Date the Net REO Proceeds received or
collected from the related REO Property, except that in determining the amount
of such Net REO Proceeds, such Special Servicer may retain in such REO Account
reasonable reserves for repairs, replacements and necessary capital
improvements and other related expenses.
Notwithstanding the foregoing, no Special Servicer shall
(unless permitted pursuant to subsection (c) below):
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(i) permit the Trust Fund to enter into, renew or extend
any New Lease if the New Lease, by its terms, will
give rise to any income that does not constitute
Rents from Real Property;
(ii) permit any amount to be received or accrued under
any New Lease other than amounts that will
constitute Rents from Real Property;
(iii) authorize or permit any construction on any REO
Property, other than the repair or maintenance
thereof or the completion of a building or other
improvement thereon, and then only if more than 10%
of the construction of such building or other
improvement was completed before default on the
related Mortgage Loan became imminent, all within
the meaning of Section 856(e)(4)(B) of the Code; or
(iv) Directly Operate or perform any construction work
on, or allow any Person (other than an Independent
Contractor) to Directly Operate or perform any
construction work on, any REO Property on, any date
more than 90 days after its date of acquisition by
the Trust Fund;
unless, in any such case, the such Special Servicer has requested and received
an Opinion of Counsel addressed to such Special Servicer and the Trustee (which
opinion shall be an expense of the Trust Fund) to the effect that such action
will not cause such REO Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code (determined without regard
to the exception applicable for purposes of Section 860D(a) of the Code) at any
time that it is held by the Trust Fund, in which case such Special Servicer may
take such actions as are specified in such Opinion of Counsel.
The Group 2 Special Servicer or the NOM Special Servicer, as
applicable, shall be required to contract with an Independent Contractor for
the operation and management of any REO Property related to a Group 2 Mortgage
Loan within 90 days of the Trust Fund's acquisition thereof (unless such
Special Servicer shall have provided the Trustee with an Opinion of Counsel
that the operation and management of such REO Property other than through an
Independent Contractor shall not cause such REO Property to fail to qualify as
"foreclosure property" within the meaning of Code Section 860G(a)(8)) (which
opinion shall be an expense of the Trust Fund), provided that:
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(i) the terms and conditions of any such contract shall
be reasonable and customary for the area and type of
property and shall not be inconsistent herewith;
(iv) the terms and conditions of any such contract shall
reflect an agreement reached at arm's length and
shall be consistent with the provisions of Treasury
Regulation section 1.856- 4(b)(5);
(ii) any such contract shall require, or shall be
administered to require, that the Independent
Contractor pay all costs and expenses incurred in
connection with the operation and management of such
REO Property, including those listed above, and
remit all related revenues (net of such costs and
expenses) to the applicable Special Servicer as soon
as practicable, but in no event later than thirty
days following the receipt thereof by such
Independent Contractor but only to the extent
consistent with Section 856 of the Code and Treasury
Regulation 1.856-4(b)(5);
(iii) none of the provisions of this Section 3.19(b)
relating to any such contract or to actions taken
through any such Independent Contractor shall be
deemed to relieve the applicable Special Servicer of
any of its duties and obligations to the Trust Fund
or the Trustee on behalf of the Certificateholders
with respect to the operation and management of any
such REO Property; and
(iv) the applicable 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 Group 2 Special Servicer and the NOM Special Servicer
shall each be entitled to enter into any agreement with any Independent
Contractor performing services for it related to its duties and obligations
hereunder for indemnification of the Special Servicer by such Independent
Contractor, and nothing in this Agreement shall be deemed to limit or modify
such indemnification.
(c) When and as necessary, the applicable Special Servicer
shall send to the Trustee a statement prepared by the Special Servicer setting
forth the
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amount of net income or net loss, as determined for federal income tax
purposes, resulting from the operation and management of a trade or business
on, the furnishing or rendering of a non-customary service to the tenants of,
or the receipt of any other amount not constituting Rents from Real Property in
respect of, any REO Property in accordance with Section 3.19(b).
(d) Prior to the acquisition of title to any Mortgaged
Property securing a defaulted Mortgage Loan, the applicable 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 Fund. If such Special Servicer determines from such review 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"), such
Mortgaged Property may be Directly Operated by such Special
Servicer as REO Property;
(ii) Directly Operating such Mortgaged Property as
an REO Property could result in income from such property
that would be subject to an REO Tax, but that a lease of such
property to another party to operate such property, or the
performance of some services by an Independent Contractor
with respect to such property, or another method of operating
such property would not result in income subject to an REO
Tax, then the such Special Servicer may (provided, that in
the good faith and reasonable judgment of such Special
Servicer, it is commercially reasonable) acquire such
Mortgaged Property as REO Property and so lease or operate
such REO Property; or
(iii) It is reasonable to believe that Directly
Operating such property as REO Property could result in
income subject to an REO Tax and that no commercially
reasonable means exists to operate such property as REO
Property without the Trust Fund incurring or possibly
incurring an REO Tax on income from such property, such
Special Servicer shall make a determination, based on its
analysis of estimates of the income to be derived from the
REO Property and the estimated amount of taxes that the Trust
Fund would be required to pay with respect to each such
source of income either to (A) implement such
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Special Servicer's plan with respect to the disposition of
such Mortgaged Property (after acquiring such Mortgaged
Property as REO Property) or (B) manage and operate such
property in a manner that would not result in the imposition
of an REO Tax on the income derived from such property. Such
Special Servicer's decision as to how each REO Property shall
be managed and operated shall be based in either case on the
good faith and reasonable judgment of such Special Servicer
as to which means would be in the best interest of the
Certificateholders by maximizing (to the extent commercially
feasible) the net after-tax REO Revenues received by the
Trust Fund with respect to such property and, to the extent
consistent with the foregoing, in the same manner as would
prudent mortgage loan servicers and asset managers operating
acquired mortgaged property comparable to the respective
Mortgaged Property. Such Special Servicer may consult with
counsel at the expense of the Trust Fund in connection with
determinations required under this Section 3.19(d). Such
Special Servicer shall not be liable to the
Certificateholders, the Trust Fund, or any of the other
parties hereto for errors in judgment made in its reasonable
business judgment in the exercise of its discretion while
performing its responsibilities under this Section 3.19(d).
(e) Except as provided in Section 3.19(d), 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,
contract or agreement to which the Special Servicer or the Trust Fund may
become a party or 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.
SECTION 3.20. Sale of Specially Serviced Mortgage Loans
and REO Properties related to the Group 2
Mortgage Loans.
(a) With respect to any Specially Serviced Mortgage Loan that
is a Group 2 Mortgage Loan or any REO Property that was related to a Group 2
Mortgage Loan which the Group 2 Special Servicer or the NOM Special Servicer,
as the case may be, has determined to sell in accordance with Section 3.12 or
otherwise, the applicable Special Servicer shall deliver to the Trustee and, in
the case of the NOM
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Loan or any related REO Property, the Group 2 Special Servicer an Officer's
Certificate to the effect that such Special Servicer has determined to sell
such Specially Serviced Mortgage Loan or REO Property in accordance with this
Section 3.20. Such Special Servicer may then offer to sell to any Person such
Specially Serviced Mortgage Loan or such REO Property but shall, in any event,
so offer to sell such REO Property no later than the time determined by such
Special Servicer to be sufficient to result in the sale of such REO Property
within the period specified in Section 3.19(a). Such Special Servicer shall
deliver such Officer's Certificate and give the Trustee and, in the case of the
NOM Loan or related REO Property, the Group 2 Special Servicer not less than
ten Business Days prior written notice of its intention to sell such Specially
Serviced Mortgage Loan or REO Property, in which case such Special Servicer
shall accept any offer received from any Person that is determined by such
Special Servicer to be a fair price, as determined in accordance with Section
3.20(b), for such Specially Serviced Mortgage Loan or REO Property if the
offeror is a Person other than an Interested Person, or is determined to be
such a price by the Trustee if the offeror is an Interested Person; provided,
however, that the Trustee shall be entitled to engage at the expense of the
Trust Fund payable out of the Collection Account, an Independent appraiser to
determine whether the offer is a fair price; and provided, further, that any
offer by an Interested Person in the amount of the Repurchase Price shall be
deemed to be a fair price. Notwithstanding anything to the contrary herein,
neither the Trustee in its individual capacity nor any of its Affiliates, may
make an offer or purchase any Specially Serviced Mortgage Loan or any REO
Property pursuant hereto.
In addition, in the event that the applicable Special
Servicer receives more than one fair offer with respect to any Specially
Serviced Mortgage Loan or REO Property, such Special Servicer may accept an
offer that is not the highest fair offer if it determines, in accordance with
the Group 2 Servicing Standard, that acceptance of such offer would be in the
best interests of the Certificateholders (for example, if the prospective buyer
making the lower offer is more likely to perform its obligations, or the terms
offered by the prospective buyer making the lower offer are more favorable). In
the event that the applicable Special Servicer determines with respect to any
REO Property that the offers being made with respect thereto are not in the
best interests of the Certificateholders and that the end of the three-year
period referred to in Section 3.19(a) with respect to such REO Property is
approaching, the applicable Special Servicer shall seek an extension of such
three-year period in the manner described in Section 3.19(a); provided,
however, that such Special Servicer shall use its best efforts in accordance
with the Group 2 Servicing Standard, to sell any REO Property no later than the
day prior to the Determination Date immediately prior to the Rated Final
Distribution Date.
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(b) In determining whether any offer received represents a
fair price for any Specially Serviced Mortgage Loan or any REO Property, the
Group 2 Special Servicer or the NOM Special Servicer, as applicable, or the
Trustee may conclusively rely on the opinion of an Independent appraiser or
other expert in real estate matters retained by such Special Servicer or the
Trustee at the expense of the Trust Fund. In determining whether any offer
constitutes a fair price for any Specially Serviced Mortgage Loan or any REO
Property, the applicable Special Servicer or the Trustee (or, if applicable,
such appraiser) shall take into account, and any appraiser or other expert in
real estate matters shall be instructed to take into account, the appraisal
obtained pursuant to Section 3.12(a) and, as applicable, among other factors,
the period and amount of any delinquency on such Specially Serviced Mortgage
Loan, the physical (including environmental) condition of the related Mortgaged
Property or such REO Property, the state of the local economy and the Trust
Fund's obligation to dispose of any REO Property within the time period
specified in Section 3.19(a).
(c) Subject to the provisions of Section 3.19, the Group 2
Special Servicer or NOM Special Servicer, as applicable, shall act on behalf of
the Trust Fund in negotiating and taking any other action necessary or
appropriate in connection with the sale of any Specially Serviced Mortgage Loan
or REO Property, including the collection of all amounts payable in connection
therewith. Any sale of a Specially Serviced Mortgage Loan or any REO Property
shall be without recourse to, or representation or warranty by, the Trustee,
the Depositor, the Master Servicer, the Group 2 Special Servicer, the NOM
Special Servicer or the Trust Fund (except that any contract of sale and
assignment and conveyance documents may contain customary warranties of title
and condition, so long as the only recourse for breach thereof is to the Trust
Fund), and, if such sale is consummated in accordance with the duties of the
applicable Special Servicer, the Master Servicer, the Depositor and the Trustee
pursuant to the terms of this Agreement, no such Person who so performed shall
have any liability to the Trust Fund or any Certificateholder with respect to
the purchase price therefor accepted by such Special Servicer or the Trustee.
(d) Net Liquidation Proceeds related to any such sale shall
be promptly, and in any event within one Business Day following receipt
thereof, deposited in the Collection Account in accordance with Section
3.6(a)(iv).
SECTION 3.21. Inspections and Collection of Financial
Statements in Respect of Group 2
Mortgage Loans.
(a) The Group 2 Special Servicer shall inspect or cause to be
inspected (at its own expense) each Mortgaged Property related to a Group 2
Mortgage Loan at
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such times and in such manner as are consistent with the Servicing Standard,
but shall (at its own expense) in any event (i) inspect each Mortgaged Property
at least once every 12 months with the first such inspection being completed
during or prior to December 1998, unless each of the Rating Agencies has
confirmed in writing that a longer period between inspections (which may not
exceed 24 months) shall not result, in and of itself, in a downgrading,
withdrawal or qualification of the rating then assigned by such Rating Agency
to any Class of the Certificates; and (ii) if any Monthly Payment becomes more
than 60 days delinquent (without giving effect to any grace period permitted
under the related Note or Mortgage) on any Group 2 Mortgage Loan, inspect each
related Mortgaged Property as soon as practicable thereafter.
(b) In addition, the Group 2 Special Servicer shall use
reasonable efforts to collect and shall summarize, in its customary format,
financial statements with respect to the Borrowers and Mortgaged Properties
relating to each of the Group 2 Mortgage Loans as provided in the related Loan
Documents. Such financial statements and corresponding summaries shall, in each
case, be provided to the Trustee within 45 days after receipt of the subject
financial statements.
SECTION 3.22. Available Information and Notices.
The Master Servicer or any Special Servicer, if applicable,
shall promptly give notice to the Trustee, who will copy each
Certificateholder, the Group 2 Special Servicer, each Rating Agency, the
Depositor, and the Mortgage Loan Seller of (a) any notice from a Borrower or
insurance company regarding an upcoming voluntary or involuntary prepayment
(including that resulting from a casualty or condemnation) of all or part of
the related Mortgage Loan (provided that a request by a Borrower or other party
for a quotation of the amount necessary to satisfy all obligations with respect
to a Mortgage Loan shall not, in and of itself, be deemed to be such notice);
and (b) of any other occurrence known to it with respect to a Mortgage Loan or
REO Property that the Master Servicer or the applicable Special Servicer
determines, in accordance with the applicable Servicing Standard, would have a
material effect on such Mortgage Loan or REO Property, which notice shall
include an explanation as to the reason for such material effect (provided that
any extension of the term of any Mortgage Loan shall be deemed to have a
material effect).
None of the Trustee, the Fiscal Agent, the Master Servicer or
any Special Servicer shall be responsible for the accuracy or completeness of
any information supplied to it by a Borrower or a third party for inclusion in
any such notice or in any other report or information furnished or provided by
the Master
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Servicer, such Special Servicer or the Trustee hereunder, and the Master
Servicer, the Special Servicers, the Fiscal Agent and the Trustee shall be
indemnified and held harmless by the Trust Fund against any loss, liability or
expense incurred in connection with any legal action relating to any statement
or omission or alleged statement or omission therein, including any liability
related to the inclusion of such information in any report filed with the
Commission.
In addition to the other reports and information made
available and distributed to the Depositor, the Trustee or the
Certificateholders pursuant to other provisions of this Agreement, the Master
Servicer and each Special Servicer shall, in accordance with such reasonable
rules and procedures as it may adopt (which may include the requirement that an
agreement governing the availability, use and disclosure of such information,
and which may provide indemnification to the Master Servicer or the Special
Servicers as applicable, for any liability or damage that may arise therefrom,
be executed to the extent the Master Servicer or any Special Servicer, as
applicable, deems such action to be necessary or appropriate), also make
available any information relating to the Mortgage Loans, the Mortgaged
Properties or the Borrowers for review by the Depositor, the Rating
Agencies, the Trustee, the Certificateholders and any other Persons to whom the
Master Servicer or a Special Servicer, as the case may be, believes such
disclosure is appropriate, in each case except to the extent doing so is
prohibited by applicable law or by any documents related to a Mortgage Loan.
The Trustee shall also make available at its offices
primarily responsible for administration of the Trust Fund, during normal
business hours, for review by the Depositor, the Rating Agencies, any
Certificateholder, any Person identified to the Trustee by a Certificateholder
as a beneficial owner or prospective transferee of a Certificate or any
interest therein and any other Persons to whom the Trustee believes such
disclosure is appropriate, the following items: (i) this Agreement, (ii) all
monthly statements to Certificateholders delivered since the Closing Date
pursuant to Section 4.4, (iii) all annual statements as to compliance delivered
to the Trustee and the Depositor pursuant to Section 3.16, (iv) all annual
Independent accountants' reports delivered to the Trustee and the Depositor
pursuant to Section 3.17, and (v) any reports or information relating to the
Mortgage Loans, the Mortgaged Properties or the Borrowers which the Trustee has
received from the Master Servicer or the Special Servicers. The Master Servicer
or the applicable Special Servicer, as appropriate, shall make available at its
offices during normal business hours, for review by the Depositor, the Trustee,
the Rating Agencies, any Certificateholder, any Person identified to the Master
Servicer or such Special Servicer, as applicable, by a Certificateholder as a
beneficial owner or prospective transferee of a Certificate or an interest
therein and
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any other Persons to whom the Master Servicer or such Special Servicer, as
applicable, believe such disclosure is appropriate, the following items: (i)
the inspection reports prepared by or on behalf of such Special Servicer, as
applicable, in connection with the property inspections conducted by the Group
2 Special Servicer, (ii) any and all modifications, waivers and amendments of
the terms of a Mortgage Loan entered into by the Master Servicer or a Special
Servicer or the ▇▇▇▇▇▇ Servicer, (iii) any financial statements and summaries
thereof collected or prepared by the Group 2 Special Servicer or collected by
the ▇▇▇▇▇▇ Servicer or Group 1 Special Servicer and (iv) any and all Officer's
Certificates and other evidence delivered to the Trustee and the Depositor to
support the Master Servicer's determination that any Advance was, or if made
would be, a Nonrecoverable Advance, in each case except to the extent doing so
is prohibited by applicable laws or by any documents related to a Mortgage
Loan. Copies of any and all of the foregoing items shall be available from the
Master Servicer, the Special Servicers or the Trustee, as applicable, upon
request (subject to the exception in the preceding sentence). The Master
Servicer, the Special Servicers and the Trustee shall be permitted to require
payment (other than from any Rating Agency) of a sum sufficient to cover the
reasonable costs and expenses incurred by it in providing copies of or access
to any information requested in accordance with the previous sentence.
The Master Servicer shall, at the expense of the Depositor,
prepare for filing, execute and properly file with the Commission, any and all
reports, statements and information respecting the Trust Fund and/or the
Certificates required or specifically provided herein to be filed on behalf of
the Trust under the 1934 Act. The Depositor shall promptly file, and exercise
its reasonable best efforts to obtain a favorable response to non-action
requests to, or requests for other appropriate exemptive relief from, the
Commission regarding the usual and customary exemption from certain reporting
requirements granted to issuers of securities similar to the Certificates.
SECTION 3.23. Reserve Accounts.
The Master Servicer shall administer each Reserve Account in
accordance with the related Mortgage Loan Documents. Each Reserve Account shall
be an Eligible Account except to the extent precluded by applicable law and the
related Mortgage Loan Documents. Any Reserve Account shall be beneficially
owned for federal income tax purposes by the Person who is entitled to receive
the reinvestment income or gain thereon in accordance with the related Mortgage
Loan Documents and Section 3.9.
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SECTION 3.24. Property Advances.
(a) The Master Servicer (or, to the extent provided in
Section 3.24(b), the Trustee or the Fiscal Agent) shall make any Property
Advances as and to the extent otherwise required pursuant to the terms hereof.
The Master Servicer shall not be required to make Property Advances with
respect to the Group 1 Mortgage Loan unless the ▇▇▇▇▇▇ Servicer fails to make
an advance pursuant to the ▇▇▇▇▇▇ Servicing Agreement or a Property Advance
that falls within the definition of "Property Advance" under this Agreement.
(b) The Master Servicer shall notify the Trustee, the Fiscal
Agent and the Rating Agencies in writing promptly upon, and in any event within
one Business Day after, becoming aware that it will be financially unable to
make any Property Advance required to be made pursuant to the terms hereof, and
in connection therewith, shall set forth in such notice the amount of such
Property Advance, the Person to whom it should be paid, and the circumstances
and purpose of such Property Advance, and shall set forth therein information
and instructions for the payment of such Property Advance, and, on the date
specified in such notice for the payment of such Property Advance, or, if no
such date is specified or such date has already occurred or such date occurs
within three Business Days of its receipt of such notice, then within three
Business Days following such notice, the Trustee shall pay the amount of such
Property Advance in accordance with such information and instructions. If the
Trustee fails to make any Property Advance required to be made under this
Section 3.24, the Fiscal Agent shall make such Advance on the same day the
Trustee was required to make such Property Advance and, thereby, the Trustee
shall not be in default under this Agreement.
(c) Notwithstanding anything herein to the contrary, none of
the Master Servicer, the Trustee or the Fiscal Agent shall be obligated to make
a Property Advance as to any Mortgage Loan or REO Property if the Master
Servicer, the Trustee or the Fiscal Agent as applicable, determines that such
Property Advance, if made, would be a Nonrecoverable Advance. The Trustee and
the Fiscal Agent shall be entitled to rely, conclusively, on any determination
by the Master Servicer that a Property Advance, if made, would be a
Nonrecoverable Advance. The Trustee and the Fiscal Agent, in determining
whether or not a Property Advance previously made is, or a proposed Property
Advance, if made, would be, a Nonrecoverable Advance shall be subject to the
standards applicable to the Master Servicer hereunder.
(d) The Master Servicer, the Trustee and/or the Fiscal Agent,
as applicable, shall be entitled to, and the Master Servicer hereby covenants
and agrees to
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promptly seek and effect, the reimbursement of Property Advances to the extent
permitted pursuant to Section 3.7(ii) of this Agreement, together with any
related Advance Interest Amount in respect of such Property Advances.
(e) Any Special Servicer may, but is not required to, make a
Property Advance at any time in accordance with the applicable Servicing
Standard. To the extent that the Special Servicer makes a Property Advance, the
Special Servicer shall notify the Master Servicer regarding such Property
Advance and shall be entitled to be reimbursed therefor (with interest thereon
at the Reimbursement Rate) pursuant to a schedule mutually agreed upon by the
Master Servicer and the Special Servicer (but not less often than once per
month), in which event the Master Servicer shall be entitled to be reimbursed
for such Property Advance (with interest thereon at the Reimbursement Rate) as
provided for hereunder as if the Master Servicer initially made such Property
Advance; provided, however, that, in the event that such Property Advance
constitutes a Nonrecoverable Advance, the Special Servicer shall be reimbursed
for such Property Advance (with interest thereon at the Reimbursement Rate)
from amounts on deposit in the Collection Account pursuant to Section 3.7.
Notwithstanding Sections 3.6(b)(ii) and 3.7(ii), each Special Servicer shall be
entitled to reimbursement for any Property Advances made by it (with interest
thereon at the Reimbursement Rate) prior to the reimbursement of the Master
Servicer for Property Advances in the event that the Master Servicer fails to
reimburse such Special Servicer for such Property Advances and such interest
thereon in a timely manner pursuant to the mutually agreed upon schedule
provided for by this Section 3.24(e).
SECTION 3.25. Appointment of Special Servicers.
CRIIMI MAE Services Limited Partnership, a Maryland limited
partnership, is hereby appointed as the initial Group 2 and NOM Special
Servicer hereunder. Midland Loan Services, L.P., a Missouri limited
partnership, is hereby appointed as the initial Group 1 Special Servicer
hereunder.
The Group 2 Special Servicer may be removed without cause and
a successor Special Servicer appointed by the Holders of the majority of the
aggregate Voting Rights of the Controlling Class. The NOM Special Servicer may
be removed without cause and a successor Special Servicer appointed by the
Holders of a majority of the aggregate Voting Rights of the NOM Controlling
Class. The Group 1 Special Servicer may be removed without cause only in
accordance with the ▇▇▇▇▇▇ Servicing Agreement.
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Notwithstanding the foregoing, the removal of a Special
Servicer and the appointment of a successor Special Servicer shall not be
effective until (i) the successor Special Servicer has assumed in writing all
of the responsibilities, duties and liabilities of such removed Special
Servicer hereunder pursuant to an agreement satisfactory to the Trustee and
(ii) unless the Group 2 Special Servicer is replacing the NOM Special Servicer,
each of the Rating Agencies confirms to the Trustee in writing that such
appointment and assumption shall not result, in and of itself, in a
downgrading, withdrawal or qualification of the rating then assigned by such
Rating Agency to any Class of Certificates.
SECTION 3.26. Designation of Special Servicers by the
Applicable Controlling Class.
The Holder or Holders of the Certificates evidencing a
majority of the Voting Rights allocated to the Controlling Class and the NOM
Controlling Class may at any time and from time to time designate a Person
meeting the requirements set forth in Section 3.25 to serve as Group 2 Special
Servicer and NOM Special Servicer, respectively, hereunder and to replace any
existing Group 2 Special Servicer or NOM Special Servicer, as the case may be,
or any Special Servicer that has resigned or otherwise ceased to serve as Group
2 Special Servicer or NOM Special Servicer, as the case may be. Such Holder or
Holders may also select a representative (the "Controlling Class
Representative") from whom the applicable Special Servicer will seek advice and
approval and take direction under certain circumstances, as described herein.
Such Holder or Holders shall so designate a Person to so serve by the delivery
to the Trustee, the Master Servicer and the applicable existing Special
Servicer of a written notice stating such designation. The Trustee shall,
promptly after receiving any such notice, deliver to the Rating Agencies an
executed Notice and Acknowledgement in the form attached hereto as Exhibit I-1.
If such Holders have not replaced the applicable Special Servicer within 30
days of such Special Servicer's resignation or the date such Special Servicer
has ceased to serve in such capacity the Trustee shall use its reasonable
efforts to designate a successor Group 2 Special Servicer or NOM Special
Servicer, as the case may be, meeting the requirements set forth in Section
3.25. The designated Person shall become the Group 2 Special Servicer or NOM
Special Servicer, as the case may be, on the date that the Trustee shall have
received written confirmation from both Rating Agencies that the appointment of
such Person will not result in the qualification, downgrading or withdrawal of
the rating or ratings assigned to one or more Classes of the Certificates,
except that no such Rating Agency confirmation shall be required if the Group 2
Special Servicer is replacing the NOM Special Servicer. The appointment of such
designated Person as Group 2 Special Servicer or NOM Special Servicer, as
applicable, shall also be subject to receipt by the
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Trustee of (i) an Acknowledgement of Proposed Special Servicer in the form
attached hereto as Exhibit I-2, executed by the designated Person and (ii) an
Opinion of Counsel (at the expense of the Person designed to become Group 2
Special Servicer or NOM Special Servicer, as applicable) to the effect that the
designation of such Person to serve as such Special Servicer is in compliance
with this Section 3.26, that upon the execution and delivery of the
Acknowledgment of Proposed Special Servicer the designated Person shall be
bound by the terms of this Agreement and that this Agreement shall be
enforceable against the designated Person in accordance with its terms. Any
existing Group 2 Special Servicer or NOM Special Servicer, as applicable, shall
be deemed to have resigned simultaneously with such designated Person's
becoming the Group 2 Special Servicer or NOM Special Servicer, as applicable,
hereunder; provided, however, that the resigning Group 2 Special Servicer or
NOM Special Servicer, as applicable, 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 Property Advances or
otherwise, and it shall continue to be entitled to the benefits of Section 6.3
notwithstanding any such resignation. Such resigning Group 2 Special Servicer
or NOM Special Servicer shall cooperate with the Trustee and the replacement
Group 2 Special Servicer or NOM Special Servicer, as the case may be, in
effecting the termination of the resigning Group 2 Special Servicer or NOM
Special Servicer's responsibilities and rights hereunder, including, without
limitation, the transfer within two Business Days to the replacement Group 2
Special Servicer or NOM Special Servicer for administration by it of all cash
amounts that shall at the time be or should have been credited by the Group 2
Special Servicer or NOM Special Servicer to the REO Account or delivered to the
Master Servicer or that are thereafter received with respect to Specially
Serviced Mortgage Loans and REO Properties.
SECTION 3.27. The Controlling Class Representatives.
Each Controlling Class Representative shall be entitled to
advise the related Special Servicer with respect to the following actions of
such Special Servicer, and the related Special Servicer will not be permitted
to take any of the following actions unless such Controlling Class
Representative has approved such action in writing within five Business Days
(provided that if such written notice has not been received by the related
Special Servicer within five Business Days, then such Controlling Class
Representative's approval will be deemed to have been given):
(i) any foreclosure upon or comparable conversion (which may
include acquisitions of an REO Property) of the ownership of properties
securing such
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of the Specially Serviced Mortgage Loans for which the related Special Servicer
is responsible as come into and continue in default;
(ii) any modification of a monetary term of a Mortgage Loan
for which the related Special Servicer is responsible other than a modification
consisting of the extension of the maturity date of such a Mortgage Loan for
one year or less;
(iii) any proposed sale of a defaulted Mortgage Loan or REO
Property for which the related Special Servicer is responsible (other than in
connection with the termination of the Trust Fund);
(iv) any determination to bring an REO Property for which the
related Special Servicer is responsible into compliance with applicable
environmental laws;
(v) any acceptance of substitute or additional collateral for
a Mortgage Loan for which the related Special Servicer is responsible;
(vi) any waiver of a "due-on-sale" or "due-on-encumbrance"
clause with respect to a Mortgage Loan for which the related Special Servicer
is responsible; and
(vii) any acceptance of an assumption agreement releasing a
borrower from liability under a Montage Loan for which the related Special
Servicer is responsible.
In addition, each Controlling Class Representative may direct
the related Special Servicer to take, or to refrain from taking, such other
actions as such Controlling Class Representative may deem advisable or as to
which provision is otherwise made herein; provided that no such direction or
approval rights provided in this Section 3.27 may require or cause the related
Special Servicer to violate any provision of this Agreement or the REMIC
Provisions, including such Special Servicer's obligation to act in accordance
with the Servicing Standards or expose the Master Servicer, such Special
Servicer, the Trust Fund or the Trustee to liability, or materially expand the
scope of such Special Servicer's responsibilities hereunder or cause such
Special Servicer to act, or fail to act, in a manner which in the reasonable
judgment of such Special Servicer is not in the best interests of the
Certificateholders.
Each Controlling Class Representative shall have no liability
to the Certificateholders for any action taken, or for refraining from the
taking of any action,
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in good faith pursuant to this Agreement, or for errors in judgment; provided,
however, that neither Controlling Class Representative will 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. By its acceptance of a
Certificate, each Certificateholder confirms its understanding that the
Controlling Class Representatives may have special relationships and interests
that conflict with those of holders of some Classes of the Certificates and
agrees to take no action against the Controlling Class Representatives, or any
of their officers, directors, employees, principals or agents as a result of
such special relationship or conflict.
SECTION 3.28. Transfer of Servicing Between Master
Servicer and Special Servicers; Record
Keeping.
(a) Upon determining that any Mortgage Loan has become a
Specially Serviced Mortgage Loan, the Master Servicer shall immediately give
notice thereof, together with a copy of the related Mortgage File, to the
applicable Special Servicer and shall use its best efforts to provide such
Special Servicer with all information, documents (but excluding the original
documents constituting such Mortgage File) and records (including records
stored electronically on computer tapes, magnetic discs and the like) relating
to such Mortgage Loan and reasonably requested by such Special Servicer to
enable it to assume its duties hereunder with respect thereto without acting
through a sub-servicer. The Master Servicer shall use its best efforts to
comply with the preceding sentence within five Business Days of the date such
Mortgage Loan became a Specially Serviced Mortgage Loan and in any event shall
continue to act as Master Servicer and administrator of such Mortgage Loan
until the applicable Special Servicer has commenced the servicing of such
Mortgage Loan, which shall occur upon the receipt by such Special Servicer of
the information, documents and records referred to in the preceding sentence.
With respect to each Mortgage Loan that becomes a Specially Serviced Mortgage
Loan, the Master Servicer shall instruct the related Borrower to continue to
remit all payments in respect of such Mortgage Loan to the Master Servicer.
Upon determining that a Specially Serviced Mortgage Loan has
become a Corrected Mortgage Loan, the applicable Special Servicer shall
immediately give notice thereof to the Master Servicer and upon giving such
notice, such Mortgage Loan shall cease to be a Specially Serviced Mortgage Loan
pursuant to the applicable proviso to the definition of Specially Serviced
Mortgage Loan, the applicable Special Servicer's obligation to service such
Mortgage Loan shall terminate and the obligations of the Master Servicer to
service and administer such Mortgage Loan as a Mortgage
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Loan that is not a Specially Serviced Mortgage Loan shall resume. In addition,
if the related Borrower has been instructed, pursuant to the last sentence of
the preceding paragraph, to make payments to the applicable Special Servicer,
upon such determination, such Special Servicer shall instruct such Borrower to
remit all payments in respect of such Mortgage Loan that is no longer a
Specially Serviced Mortgage Loan directly to the Master Servicer.
(b) In servicing any Specially Serviced Mortgage Loan, the
applicable Special Servicer shall provide to the Trustee originals of documents
included within the definition of "Mortgage File" for inclusion in the related
Mortgage File (to the extent such documents are in the possession of such
Special Servicer) and copies of any additional related Mortgage Loan
information, including correspondence with the related Borrower, and applicable
Special Servicer shall provide copies of the foregoing to the Master Servicer.
(c) Not later than the Business Day preceding each date on
which the Master Servicer is required to furnish a report under Section 3.15(a)
to the Trustee, the applicable Special Servicer shall deliver to the Master
Servicer, to the extent relevant to such report, a written statement
describing, on a Mortgage Loan-by-Mortgage Loan basis, the amount of all
payments on account of interest received on each Specially Serviced Mortgage
Loan during the related Collection Period; the amount of all payments on
account of principal, including Principal Prepayments, on each Specially
Serviced Mortgage Loan during the related Collection Period; the amount of
Insurance Proceeds and Liquidation Proceeds received with respect to each
Specially Serviced Mortgage Loan during the related Collection Period; and the
amount of net income or net loss for the related Collection Period, as
determined for management of a trade or business on, or the furnishing or
rendering of a non-customary service to the tenants of, each REO Property that
previously secured a Specially Serviced Mortgage Loan, in each case in
accordance with Section 3.19(d).
(d) Notwithstanding the provisions of the preceding
subsection (c), the Master Servicer shall maintain ongoing payment records with
respect to each of the Specially Serviced Mortgage Loans and shall provide the
applicable Special Servicer with any information in the Master Servicer's
possession or reasonably available to it and which is reasonably required by
such Special Servicer to perform its duties under this Agreement. The Special
Servicer shall provide the Master Servicer with any information in such Special
Servicer's possession or reasonably available to it and which is reasonably
required by the Master Servicer to perform its duties under this Agreement.
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SECTION 3.29. Additional Servicing Provisions for
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan.
All amounts collected with respect to the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan
and the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note shall be applied (i) in accordance with
the applicable Mortgage Loan Documents and the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Intercreditor
Agreement, and (ii) to the extent that such documents do not make provision for
application of such amounts, shall be applied first to repayment of any
Property Advances (with interest thereon at the Reimbursement Rate) or
Additional Trust Fund Expenses with respect to the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Note
and the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note and thereafter to the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Trust Note and the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note based on the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Pro Rata Allocation. All expenses related to the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan or the
related Mortgaged Property that reduce the amount distributable to the holders
of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Note and the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note, and
all Realized Losses or Additional Trust Fund Expenses with respect to the
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Note and the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note and such
Mortgaged Property shall be allocated to reduce the amount distributable with
respect to the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Note and the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note
based on the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Pro Rata Allocation.
The Master Servicer or the Group 2 Special Servicer, as
applicable, shall, in accordance with paragraph 4 of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Intercreditor Agreement but subject to the Group 2 Servicing Standard and the
other terms hereof, exercise the rights of the holder of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Trust Note on behalf of the Trust Fund and act as sole representative of the
holders of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Note and the Additional ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Note
in negotiations with the Borrower under the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan (subject to the
rights of the holder of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Additional Note to withhold its
consent to any modification of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Loan affecting the principal
balance thereof, interest rate thereon, release of the related Mortgaged
Property or other collateral therefor or the postponement of the date of
payment of any interest or principal thereon). The Master Servicer, on behalf
of the Trust Fund, shall use its best efforts, in accordance with the Group 2
Servicing Standard, to enforce the obligations of the Mortgage Loan Seller
(and its successors or assigns as the holders of the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Additional
Note) under the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Intercreditor Agreement.
SECTION 3.30. Updated Appraisals with respect to
NOM Mortgage Loan.
Upon the NOM Mortgage Loan becoming a Specially Serviced
Mortgage Loan, the Master Servicer shall within 30 days order an Updated
Appraisal.
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Within 30 days following the first anniversary of the NOM Mortgage Loan being a
Specially Serviced Mortgage Loan, the Master Servicer shall order a second
Updated Appraisal and within 30 days of each six-month period, so long as the
NOM Mortgage Loan remains a Specially Serviced Mortgage Loan, another Updated
Appraisal shall be ordered by the Master Servicer.
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.1. Distributions from the REMIC I
Distribution Account.
On each Distribution Date, the Trustee shall withdraw from the REMIC I
Distribution Account, (a) the amount required to pay itself the Trustee Fee and
(b) an aggregate amount equal to the Available Distribution Amount and shall
distribute the amount described in this clause (b) to the REMIC II Distribution
Account in the following order of priority satisfying in full, to the extent
required and possible, each priority before making any distribution with
respect to any succeeding priority:
(i) from the portion of the Available Distribution Amount
attributable to interest collected or deemed collected or advanced on
or with respect to each Mortgage Loan, Separate Loan Advance, or REO
Property, Distributable Certificate Interest to each corresponding
REMIC I Interest for such Distribution Date and, to the extent not
previously paid, for all prior Distribution Dates;
(ii) from the portion of the Available Distribution Amount
attributable to principal collected or deemed collected or advanced on
or with respect to each Mortgage Loan, Separate Loan Advance or REO
Property, principal to the corresponding REMIC I Interest, until the
Certificate Balance thereof is reduced to zero;
(iii) any remaining funds, to reimburse any Realized Losses
and Additional Trust Fund Expenses previously allocated first, to the
REMIC I Interest related to the Mortgage Loan, Separate Loan Advance
or REO Property from which such funds are derived and then to the
other REMIC I
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Interests (pro rata in proportion to any Realized Losses previously
allocated thereto and not reimbursed); and
(iv) thereafter, to the Class R-I Certificateholders.
SECTION 4.2. Distributions from the REMIC II Distribution Account.
(a) On each Distribution Date (other than a Distribution Date
on which the condition set forth in Section 4.2 (c) or (d) has been met), the
Trustee shall withdraw from the REMIC II Distribution Account an amount equal
to the Group 1 Available Distribution Amount and shall distribute such amount
to the REMIC III Distribution Account as follows:
(i) to pay Distributable Certificate Interest for
such Distribution Date on the Class A-4-II Interest;
(ii) to pay amounts remaining unpaid from prior
Distribution Dates in respect of Distributable Certificate Interest on
the Class A-4- II Interest, and in the event that the Group 2
Available Distribution Amount is not sufficient to pay the amounts
specified in Section 4.2(b)(i), to pay any shortfall in such amounts
as (i) Distributable Certificate Interest on the Class A-1-II
Interest, (ii) Distributable Certificate Interest on the Class A-2-II
Interest, (iii) Distributable Certificate Interest on the Class A-
3-II Interest, (iv) the Component B-II Fraction of Distributable
Certificate Interest on the Class B-II Interest; (v) the Component
C-II Fraction of Distributable Certificate Interest on the Class C-II
Interest; (vi) the Component D-II Fraction of Distributable
Certificate Interest on the Class D-II Interest; (vii) the Component
E-II Fraction of Distributable Certificate Interest on the Class E-II
Interest; (viii) the Component F-1-II, Component F-2-II, and Component
G-II Fractions of Distributable Certificate Interest on the Class
F-II-1, Class F-II-2, and Class G-II Interests on such Distribution
Date;
(iii) to distributions of principal to the Class A-4-II
Interest in an amount equal to the lesser of the then outstanding
Certificate Balance of the Class A-4-II Interest and the Group 1
Principal Distribution Amount for such Distribution Date; and
(iv) any remaining amounts to the REMIC II
Distribution Account.
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(b) On each Distribution Date (other than a Distribution Date
on which the condition set forth in Section 4.2 (c) or (d) has been met), the
Trustee shall withdraw from the REMIC II Distribution Account an amount equal
to the Group 2 Available Distribution Amount and shall distribute such amount
to the REMIC III Distribution Account as follows:
(i) to pay in respect of such Distribution Date (i)
Distributable Certificate Interest on the Class A-1-II Interest, (ii)
Distributable Certificate Interest on the Class A-2-II Interest; (iii)
Distributable Certificate Interest on the Class A-3-II Interest, (iv)
the Component B-II Fraction of Distributable Certificate Interest on
the Class B-II Interest; (v) the Component C-II Fraction of
Distributable Certificate Interest on the Class C-II Interest; (vi)
the Component D-II Fraction of Distributable Certificate Interest on
the Class D-II Interest; (vii) the Component E-II Fraction of
Distributable Certificate Interest on the Class E-II Interest; (viii)
the Component F-1-II, Component F-2-II and Component G-II Fractions of
Distributable Certificate Interest on the Class F-I-II, F-2-II and
G-II Interests and (ix) in the event that the Group 1 Available
Distribution Amount is not sufficient to pay Distributable Certificate
Interest on the Class A-4-II Interest, any shortfall in such amount;
(ii) to pay amounts remaining unpaid from prior
Distribution Dates in respect of (i) Distributable Certificate
Interest on the Class A-1-II Interest, (ii) Distributable Certificate
Interest on the Class A-2-II Interest; (iii) Distributable Certificate
Interest on the Class A-3-II Interest, (iv) the Component B-II
Fraction of Distributable Certificate Interest on the Class B-II
Interest; (v) the Component C-II Fraction of Distributable Certificate
Interest on the Class C-II Interest; (vi) the Component D-II Fraction
of Distributable Certificate Interest on the Class D-II Interest;
(vii) the Component E-II Fraction of Distributable Certificate
Interest on the Class E-II Interest;and (viii) the Component F-1-II,
Component F-2-II and Component G-II Fractions of Distributable
Certificate Interest on the Class F-I-II, F-2-II and G-II Interests;
(iii) to distributions of principal to the Class
A-1-II Interest in an amount equal to the lesser of the then outstanding
Certificate Balance of the Class A-1-II Interest and the Group 2 Principal
Distribution Amount for such Distribution Date;
(iv) to distributions of principal to the Class
A-2-II Interest in an amount equal to the lesser of the then
outstanding Certificate Balance of
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the Class A-2-II Interest and the Group 2 Principal Distribution
Amount for such Distribution Date, less any portion thereof
distributed in respect of the Class A-1-II Interest;
(v) to distributions of principal to the Class
A-3-II Interest in an amount equal to the lesser of the then
outstanding Certificate Balance of the Class A-3-II Interest and the
Group 2 Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed in respect of the Class A-1-II and
Class A-2-II Interests;
(vi) to distributions to the Class A-1-II, Class
A-2-II and Class A-3-II Interests, to reimburse the amount of Realized
Losses and Additional Trust Fund Expenses, if any, previously
allocated to such Classes of REMIC II Interests for which no
reimbursement has previously been distributed, pro rata in proportion
to such loss and expense allocations;
(vii) if the Certificate Balance of the Class A-4-II
Interest is greater than zero (after application of the Group 1
Available Distribution Amount on such Distribution Date), to
distributions to the Class A-4-II Interests equal to the lesser of the
then outstanding Certificate Balance of the Class A-4-II Interest and
the Group 2 Principal Distribution Amount for such Distribution Date,
less any portion thereof distributed in respect of the Class A-1-II,
Class A-2-II and Class A-3-II Interests;
(viii) to pay first, the Class B-II Fraction of
Distributable Certificate Interest on the Class B-II Interest for such
Distribution Date and second, any portion of such Class B-II Fraction
of Distributable Certificate Interest on the Class B-II Interest
remaining unpaid from prior Distribution Dates,
(ix) after the Certificate Balances of the Class
A-1-II, Class A-2-II, Class A-3-II and Class A-4-II Interests have
been reduced to zero, to distributions of principal to the Class B-II
Interest in an amount equal to the lesser of the then outstanding
Certificate Balance of the Class B-II Interest and the Group 2
Principal Distribution Amount for such Distribution Date, less any
portion thereof distributed in respect of the Class A-1-II, Class
A-2-II, Class A-3-II and Class A-4-II Interests;
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(x) to distributions to the Class B-II Interest to
reimburse the amount of Realized Losses and Additional Trust Fund
Expenses, if any, previously allocated to such Class of REMIC II
Interests for which no reimbursement has previously been distributed;
(xi) to pay first, the Class C-II Fraction of
Distributable Certificate Interest on the Class C-II Interest for such
Distribution Date and second, any portion of such Class C-II Fraction
of Distributable Certificate Interest on the Class C-II Interest
remaining unpaid from prior Distribution Dates;
(xii) after the Certificate Balances of the Class
A-1-II, Class A-2-II, Class A-3-II, Class A-4-II and Class B-II
Interests have been reduced to zero, to distributions of principal to
the Class C-II Interest in an amount equal to the lesser of the then
outstanding Certificate Balance of the Class C-II Interest and the
Group 2 Principal Distribution Amount for such Distribution Date, less
any portion thereof distributed pursuant to clauses (i) through (xi);
(xiii) to distributions to the Class C-II Interest
to reimburse the amount of Realized Losses and Additional Trust Fund
Expenses, if any, previously allocated to such Class of REMIC II
Interests for which no reimbursement has previously been distributed;
(xiv) to pay first, the Class D-II Fraction of
Distributable Certificate Interest on the Class D-II Interest for such
Distribution Date and second, any portion of such Class D-II Fraction
of Distributable Certificate Interest on the Class D-II Interest
remaining unpaid from prior Distribution Dates;
(xv) after the Certificate Balances of the Class
A-1-II, Class A-2-II, Class A-3-II, Class A-4-II, Class B-II and Class
C-II Interests have been reduced to zero, to distributions of
principal to the Class D-II Interest in an amount equal to the lesser
of the then outstanding Certificate Balance of the Class D-II Interest
and the Group 2 Principal Distribution Amount for such Distribution
Date, less any portion thereof distributed pursuant to clauses (i)
through (xiv);
(xvi) to distributions to the Class D-II Interest to
reimburse the amount of Realized Losses and Additional Trust Fund
Expenses, if any,
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previously allocated to such Class of REMIC II Interests for which no
reimbursement has previously been distributed;
(xvii) to pay first, the Class E-II Fraction of
Distributable Certificate Interest on the Class E-II Interest for such
Distribution Date and second, any portion of such Class E-II Fraction
of Distributable Certificate Interest on the Class E-II Interest
remaining unpaid from prior Distribution Dates;
(xviii) after the Certificate Balances of the Class
A-1-II, Class A-2-II, Class A-3-II, Class A-4-II, Class B-II, Class
C-II and Class D-II Interests have been reduced to zero, to
distributions of principal to the Class E-II Interest in an amount
equal to the lesser of the then outstanding Certificate Balance of the
Class E-II Interest and the Group 2 Principal Distribution Amount for
such Distribution Date, less any portion thereof distributed pursuant
to clauses (i) through (xvii);
(xix) to distributions to the Class E-II Interest to
reimburse Realized Losses and Additional Trust Fund Expenses, if any,
previously allocated to such Class of REMIC II Interests for which no
reimbursement has previously been distributed;
(xx) to pay first, the Class F-1-II Fraction of
Distributable Certificate Interest on the Class F-1-II Interest for
such Distribution Date and second, any portion of such Class F-1-II
Fraction of Distributable Certificate Interest on the Class F-1-II
Interest remaining unpaid from prior Distribution Dates, reduced, in
either case, by any Realized Losses (and any Additional Trust Fund
Expenses) allocated to reduce such unpaid Distributable Certificate
Interest as otherwise provided herein and provided, that if and to the
extent that interest on the NOM Loan has neither been paid nor
advanced (a "NOM Interest Shortfall") for the related Collection
Period and any previous Collection Period, the Class F-1-II Fraction
of Distributable Certificate Interest and overdue Distributable
Certificate Interest on the Class F-1-II Interest shall not be paid
currently to the extent of the NOM Interest Shortfall and overdue
Distributable Certificate Interest payable on the next succeeding
Distribution Date shall be increased to the extent that such
Distributable Certificate Interest is so deferred;
(xxi) after the Certificate Balances of the Class
A-1-II, Class A-2-II, Class A-3-II, Class A-4-II, Class B-II, Class
C-II, Class D-II and Class
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E-II Interests have been reduced to zero, to distributions of
principal to the Class F-1-II Interest in an amount equal to the
lesser of the Net Cumulative NOM Principal Collections and the Group 2
Principal Distribution Amount for such Distribution Date, less any
portion thereof distributed pursuant to clauses (i) through (xx) (but
in no event more than the then outstanding Certificate Balance of the
Class F-I-II Interest reduced by any Realized Losses and Additional
Trust Fund Expenses with respect to the NOM Mortgage Loan allocated to
the Class F-1-II Interests on such Distribution Date);
(xxii) to pay first, the Class F-2-II Fraction of
Distributable Certificate Interest on the Class F-2-II Interest for
such Distribution Date and second, any portion of such Class F-2-II
Fraction of Distributable Certificate Interest on the Class F-2-II
Interest remaining unpaid from prior Distribution Dates;
(xxiii) after the Certificate Balances of the Class
A-1-II, Class A-2-II, Class A-3-II, Class A-4-II, Class B-II, Class
C-II, Class D-II and Class E-II Interests have been reduced to zero,
to distributions of principal to the Class F-2-II Interest in an
amount equal to the lesser of the then outstanding Certificate Balance
of the Class F-2-II Interest and the Group 2 Principal Distribution
Amount for such Distribution Date, less any portion thereof
distributed pursuant to clauses (i) through (xxii);
(xxiv) to distributions to the Class F-II-2 Interest
to reimburse the amount of Realized Losses and Additional Trust Fund
Expenses, if any, previously allocated to such Class of REMIC II
Interests for which no reimbursement has previously been distributed;
(xxv) to pay first, the Class G-II Fraction of
Distributable Certificate Interest on the Class G-II Interest for such
Distribution Date and second, any portion of such Class G-II Fraction
of Distributable Certificate Interest on the Class G-II Interest
remaining unpaid from prior Distribution Date;
(xxvi) after the Certificate Balances of the Class
A-1-II, Class A-2-II, Class A-3-II, Class A-4-II, Class B-II, Class
C-II, Class DII, Class E-II and Class F-2-II Interests have been
reduced to zero, to distributions of principal to the Class G-II
Interest in an amount equal to the lesser of the then outstanding
Certificate Balance of the Class G-II Interest and the Group 2
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Principal Distribution Amount for such Distribution Date, less any
portion thereof distributed pursuant to clauses (i) through (xxv);
(xxvii) to distributions to the Class G-II Interest
to reimburse the amount of Realized Losses and Additional Trust Fund
Expenses, if any, previously allocated to such Class of REMIC II
Interests for which no reimbursement has previously been distributed;
(xxviii) to distributions to the Class F-1-II
Interest to reimburse the amount of Realized Losses and Additional
Trust Fund Expenses, if any, previously allocated to such Class of
REMIC II Interests for which no reimbursement has previously been
distributed;
(xxix) any remaining amount to the holders of the
Class R-II Certificates.
(c) At any time when (i) the Class A-1-II Interests, the
Class A-2-II Interests or the Class A-3-II Interests are outstanding, (ii) the
amount available to pay the Group 2 Principal Distribution Amount is less than
the Group 2 Principal Distribution Amount and (iii) the condition in Section
4.2(d) has not been met, such sum, together with the Group 1 Principal
Distribution Amount, shall be applied to the reduction of the Certificate
Balances of the outstanding Class A-1-II Interests, the Class A-2-II Interests,
Class A-3-II Interests and Class A-4-II Interests on a pro rata basis.
(d) If at any time the remaining principal balance of the
Mortgage Loans is less than the aggregate Certificate Balance of the
outstanding Class A-1-II Interests, the Class A-2-II Interests, Class A-3-II
Interests and the Class A-4-II Interests, all amounts in the REMIC II
Distribution Account shall be distributed in the following order of priority
satisfying in full, to the extent required and possible, each priority before
making any distribution with respect to any succeeding priority:
(i) to pay pro rata (i) Distributable Certificate
Interest on the Class A-1-II Interest, (ii) Distributable Certificate
Interest on the Class A-2-II Interest; (iii) Distributable Certificate
Interest on the Class A-3-II Interest, (iv) Distributable Certificate
Interest on the Class A-4-II Interest; (v) the Component B-II Fraction
of Distributable Certificate Interest on the Class B-II Interest; (vi)
the Component C-II Fraction of Distributable Certificate Interest on
the Class C-II Interest; (vii) the Component D-II Fraction of
Distributable
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Certificate Interest on the Class D-II Interest; (viii) the Component
E-II Fraction of Distributable Certificate Interest on the Class E-II
Interest; and (ix) the Component F/G-II Fraction of Distributable
Certificate Interest on the Class F/G-II Interest;
(ii) to pay pro rata amounts remaining unpaid from
prior Distribution Dates in respect of (i) Distributable Certificate
Interest on the Class A-1-II Interest, (ii) Distributable Certificate
Interest on the Class A-2- II Interest; (iii) Distributable
Certificate Interest on the Class A-3-II Interest; (iv) Distributable
Certificate Interest on the Class A-4-II Interest; (v) the Component
B-II Fraction of Distributable Certificate Interest on the Class B-II
Interest; (vi) the Component C-II Fraction of Distributable
Certificate Interest on the Class C-II Interest; (vii) the Component
D-II Fraction of Distributable Certificate Interest on the Class D-II
Interest; (viii) the Component E-II Fraction of Distributable
Certificate Interest on the Class E-II Interest; and (ix) the
Component F/G-II Fraction of Distributable Certificate Interest on the
Class F-1-II, F-2-II, and G-II Interests;
(iii) to the Class A-1-II Interests, the Class
A-2-II Interests, the Class A-3-II Interests and the Class A-4-II
Interests pro rata in reduction of their Certificate Balances.
(e) (i) Each Prepayment Premium received in the related
Collection Period with respect to the Group 2 Mortgage Loans shall be
distributed to the holders of the Class A-1-II, Class A-2-II, Class A-3-II,
Class B-II, Class CII, Class D-II, Class E-II, Class F-1-II, Class F-2-II and
Class G-II Interests outstanding on such Distribution Date, in the following
amounts and order of priority:
(A) to each of the Class A-1-II, Class A-2-II,
Class A-3- II, Class B-II, Class C-II,
Class D-II, Class E-II, Class F-1-II, Class
F-2-II and Class G-II Interests, an amount
equal to the applicable Prepayment Premium
Allocation Amount; and
(B) any remaining Prepayment Premiums following
the distribution in clause (A) shall be
allocated to the Component A-1-II,
Component A-2-II, Component A- 3-II,
Component B-II, Component C-II, Component
D-II, Component E-II, Component F-1-II,
Component F-2-II and Component G-II, as the
case may be, in proportion to the portion
of the Prepayment Premium Allocation Amount
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applicable to the Class A-1-II, Class
A-2-II, Class A-3-II, Class B-II, Class
C-II, Class D-II, Class E-II, Class F-1-II,
Class F-2-II or Class G-II Interest, as the
case may be, corresponding to such
Component.
(f) Any Prepayment Premiums received in the related
Collection Period with respect to the Group 1 Mortgage Loan shall be
distributed to the Class A-4-II Interests outstanding on such Distribution
Date.
SECTION 4.3. Distributions from the REMIC III Distribution
Account.
(a) On each Distribution Date, the Trustee shall withdraw
from the REMIC III Distribution Account all amounts on deposit therein and
shall distribute such amounts as follows:
(i) to pay to the Class A-1 Certificates an amount
equal to the amounts distributed to the Class A-1-II Interests
pursuant to Section 4.2 (net of the amount distributed with respect to
the Component A-1-II);
(ii) to pay to the Class A-2 Certificates an amount
equal to the amounts distributed to the Class A-2-II Interests
pursuant to Section 4.2 (net of the amount distributed with respect to
the Component A-2-II);
(iii) to pay to the Class A-3 Certificates an amount
equal to the amounts distributed to the Class A-3-II Interests
pursuant to Section 4.2 (net of the amount distributed with respect to
the Component A-3-II);
(iv) to pay to the Class A-4 Certificates an amount
equal to the amounts distributed to the Class A-4-II Interests
pursuant to Section 4.2;
(v) to pay to the Class IO Certificates an amount
equal to the amounts distributed in respect of (A) the Component
A-I-II, A-2-II and A-3- II Fractions of Distributable Certificate
Interest on the Class A-1-II, A-2-II and A-3-II Interests,
respectively; (B) the Component B-II Fraction of Distributable
Certificate Interest on the Class B-II Interest; (C) the Component
C-II Fraction of Distributable Certificate Interest on the Class C-II
Interest; (D) the Component D-II Fraction of Distributable Certificate
Interest on the Class D-II Interest; (E) the Component E-II Fraction
of Distributable Certificate Interest on the Class E-II Interest; and
(F) the Component F-1-II, Component F-2-II
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and Component G-II Fractions of Distributable Certificate Interest on
the Class F/G-II Interest, in each case, pursuant to Section 4.2;
(vi) to pay to the Class B Certificates an amount
equal to the amounts distributed to the Class B-II Interests pursuant
to Section 4.2 (net of the amount distributed with respect to the
Component B-II);
(vii) to pay to the Class C Certificates an amount
equal to the amounts distributed to the Class C-II Interests pursuant
to Section 4.2 (net of the amount distributed with respect to the
Component C-II);
(viii) to pay to the Class D Certificates an amount
equal to the amounts distributed to the Class D-II Interests pursuant
to Section 4.2 (net of the amount distributed with respect to the
Component D-II);
(ix) to pay to the Class E Certificates an amount
equal to the amounts distributed to the Class E-II Interests pursuant
to Section 4.2 (net of the amount distributed with respect to the
Component E-II);
(x) to pay to the Class F-1 Certificates an amount
equal to the amounts distributed to the Class F-1-II Interests
pursuant to Section 4.2 (net of the amount distributed with respect to
the Component F-1-II);
(xi) to pay to the Class F-2 Certificates an amount
equal to the amounts distributed to the Class F-2-II Interests
pursuant to Section 4.2 (net of the amount distributed with respect to
the Component F-2-II); and
(xii) to pay to the Class G Certificates an amount
equal to the amounts distributed to the Class G-II Interests pursuant
to Section 4.2 (net of the amount distributed with respect to the
Component G-II).
(b) Principal distributed to each Class shall be paid to the
Holders of such Class pro rata in the proportion that the Certificate Balance
of each Certificate of such Class bears to the aggregate Certificate Balance of
all Certificates of such Class.
(c) (i) Each Prepayment Premium received in the related Collection
Period with respect to the Group 2 Mortgage Loans shall be distributed to the
holders of the Group 2 Certificates outstanding on such Distribution Date, in
the following amounts and order of priority:
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(A) to each of the Group 2 Certificates (other than the
Class IO Certificates), an amount equal to
applicable Prepayment Premium Allocation Amount; and
(B) any remaining Prepayment Premiums following the
distribution in clause (A) immediately above, shall
be allocated to the Components of the Class IO
Certificates in proportion to the portion of the
Prepayment Premium Allocation Amount applicable to
the Class of Group 2 Certificates corresponding to
each such Component.
(ii) Any Prepayment Premiums received in the related
Collection Period with respect to the Group 1 Mortgage Loan shall be
distributed to the holders of the Class A-4 Certificates outstanding on such
Distribution Date.
(d) Notwithstanding the foregoing, Prepayment Premiums shall
be distributed on any Distribution Date only to the extent they are received in
respect of the Mortgage Loans in the related Collection Period.
SECTION 4.4. Statements to Rating Agencies and
Certificateholders; Available Information.
On each Distribution Date, the Trustee shall prepare and
forward by mail to each Rating Agency and each Holder of a Certificate, with
copies to the Depositor, the Paying Agent, the Master Servicer and each Special
Servicer, a statement setting forth:
(i) the Group 1 Principal Distribution Amount and the
amount included in the Available Distribution Amount
which is allocable to principal and the allocation
thereof by Class of Certificates;
(ii) the Group 2 Principal Distribution Amount and the
amount included in the Available Distribution Amount
which is allocable to principal and the allocation
thereof by Class of Certificates;
(iii) the Distributable Certificate Interest for each
Class of Regular Certificates and the amount of the
Available Distribution Amount allocable thereto,
together with any interest shortfall allocable to
such Class;
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(iv) the amount of any P&I Advances by the Master
Servicer, the Trustee or the Fiscal Agent included
in the amounts distributed to the
Certificateholders;
(v) the Certificate Balance of each Class of Regular
Certificates (other than the Class IO Certificates)
after giving effect to the distribution of amounts
in respect of the applicable Principal Distribution
Amount on such Distribution Date;
(vi) Realized Losses and their allocation to the
Certificate Balance of any Class of Regular
Certificates (other than the Class IO Certificates);
(vii) the Principal Amount of the Mortgage Loans as of the
Determination Date preceding such Distribution Date;
(viii) the number and aggregate principal balance of
Mortgage Loans (A) delinquent one month, (B)
delinquent two months, (C) delinquent three or more
months, (D) as to which foreclosure proceedings have
been commenced and (E) that otherwise constitute
Specially Serviced Mortgage Loans, and, with respect
to each Specially Serviced Mortgage Loan, the amount
of Property Advances made during the related
Collection Period, the amount of the P&I Advance
made on such Distribution Date, the aggregate amount
of Property Advances theretofore made that remain
unreimbursed and the aggregate amount of P&I
Advances theretofore made that remain unreimbursed;
(ix) with respect to any Mortgage Loan that became an REO
Mortgage Loan during the preceding calendar month,
the principal balance of such Mortgage Loan as of
the date it became an REO Mortgage Loan;
(x) as to any REO Property sold during the related
Collection Period, the date on which the Master
Servicer made a Final Recovery Determination and the
amount of the proceeds of such sale deposited into
the Collection Account, and the aggregate amount of
REO Proceeds and Net REO Proceeds (in each case
other than Liquidation Proceeds) and other revenues
collected by a Special Servicer with respect to each
REO Property during
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the related Collection Period and credited to the
Collection Account, in each case identifying such
REO Property by name;
(xi) the outstanding principal balance of each REO
Mortgage Loan as of the close of business on the
immediately preceding Due Date and the appraised
value of the related REO Property per the most
recent Updated Appraisal obtained;
(xii) the amount of `the Servicing Compensation paid to the
Master Servicer with respect to such Distribution
Date, and the amount of the additional servicing
compensation described in Section 3.14(a) that was
paid to the Master Servicer with respect to such
Distribution Date;
(xiii) the amount of any Special Servicing Fee or Principal
Recovery Fee paid to each Special Servicer with
respect to such Distribution Date; and
(xiv) the amount of Prepayment Premiums, if any, received
during the related Collection Period and the
allocation thereof by Class.
In the case of information furnished pursuant to subclauses
(i), (ii), (iii), (vi) and (xiv) above, the amounts shall be expressed as a
dollar amount in the aggregate for all Certificates of each applicable Class
and for each Class of Certificates for a denomination of $1,000 initial
Certificate Balance or Notional Amount.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Holder of a Certificate (except for a Class R-I, Class
R-II or Class RIII Certificate) and to each Rating Agency a statement
containing the information set forth in subclauses (i), (ii) and (iii) above,
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that it provided substantially
comparable information pursuant to any requirements of the Code as from time to
time in force.
On each Distribution Date, the Trustee shall forward to each
Holder of a Class R-I, Class R-II or Class R-III Certificate a copy of the
reports forwarded to the other Certificateholders on such Distribution Date and
a statement setting forth the
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amounts, if any, actually distributed with respect to the Class R-I, Class R-II
or Class R-III Certificates on such Distribution Date.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each Person who at any time during
the calendar year was a Holder of a Class R-I, Class R-II or Class R-III
Certificate a statement containing the information provided pursuant to the
previous paragraph aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of
the Trustee shall be deemed to have been satisfied to the extent that it
provided substantially comparable information pursuant to any requirements of
the Code as from time to time in force.
In addition to the reports required to be delivered pursuant
to this Section 4.4(a), the Trustee shall make available upon request to each
proposed transferee of a Privately Placed Certificate or interest therein such
additional information, if any, required to be delivered under Rule 144A(d)(4)
and in its possession or provided to it by the Depositor, the Master Servicer
or a Special Servicer pursuant to the next succeeding sentence so as to permit
the proposed transfer to be effected pursuant to Rule 144A. The Depositor, the
Master Servicer and each Special Servicer shall cooperate with the Trustee in
the provision of any required information in their possession or otherwise
available to them.
SECTION 4.5. Compliance with Withholding Requirements.
Notwithstanding any other provision of this Agreement, the
Paying Agent shall comply with all federal withholding requirements with
respect to payments to Certificateholders of interest or original issue
discount that the Paying Agent reasonably believes are applicable under the
Code. The consent of Certificateholders shall not be required for any such
withholding. The Paying Agent agrees that it will not withhold with respect to
payments of interest or original issue discount in the case of a
Certificateholder that is a non-U.S. Person that has furnished or caused to be
furnished (i) an effective Form W-8 or Form W-9 or an acceptable substitute
form or a successor form and who has informed the Trustee in writing that it is
not a "10-percent shareholder" within the meaning of Code Section 871(h)(3)(B)
or a "controlled foreign corporation" described in Code Section 881(c)(3)(C)
with respect to the Trust Fund or the Depositor, or (ii) an effective Form 4224
or an acceptable substitute form or a successor form. In the event the Paying
Agent or its agent withholds any amount from interest or original issue
discount payments or advances thereof to any Certificateholder pursuant to
federal withholding requirements, the Paying Agent shall indicate the
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amount withheld to such Certificateholder. Any amount so withheld shall be
treated as having been distributed to such Certificateholder for all purposes
of this Agreement.
SECTION 4.6. REMIC Compliance.
(a) The parties intend that each of REMIC I, REMIC II and
REMIC III shall constitute, and that the affairs of each of REMIC I, REMIC II
and REMIC III shall be conducted so as to qualify it as, a "real estate
mortgage investment conduit" as defined in, and in accordance with, the REMIC
Provisions, and the provisions hereof shall be interpreted consistently with
this intention. In furtherance of such intention, the Trustee shall, to the
extent permitted by applicable law, act as agent, and is hereby appointed to
act as agent, of each of REMIC I, REMIC II and REMIC III and shall on behalf of
each of REMIC I, REMIC II and REMIC III: (i) prepare, sign and file, or cause
to be prepared and filed, all required Tax Returns for each of REMIC I, REMIC
II and REMIC III, using a calendar year as the taxable year for each of REMIC
I, REMIC II and REMIC III, when and as required by the REMIC Provisions and
other applicable federal, state or local income tax laws; (ii) make an
election, on behalf of each of REMIC I, REMIC II and REMIC III to be treated as
a REMIC on Form 1066 for its first taxable year, in accordance with the REMIC
Provisions; (iii) prepare and forward, or cause to be prepared and forwarded,
to the Certificateholders and the Internal Revenue Service and applicable state
and local tax authorities all information reports as and when required to be
provided to them in accordance with the REMIC Provisions; (iv) if the filing or
distribution of any documents of an administrative nature not addressed in
clauses (i) through (iii) of this Section 4.6 is then required by the REMIC
Provisions in order to maintain the status of REMIC I, REMIC II or REMIC III as
a REMIC or is otherwise required by the Code, prepare, sign and file or
distribute, or cause to be prepared and signed and filed or distributed, such
documents with or to such Persons when and as required by the REMIC Provisions
or the Code or comparable provisions of state and local law; (v) within thirty
days of the Closing Date, furnish or cause to be furnished to the Internal
Revenue Service, on Form 8811 or as otherwise may be required by the Code, the
name, title and address of the Person that the holders of the Certificates may
contact for tax information relating thereto (and the Trustee shall act as the
representative of each of REMIC I, REMIC II and REMIC III for this purpose),
together with such additional information as may be required by such Form, and
shall update such information at the time or times and in the manner required
by the Code (and the Depositor agrees within 10 Business Days of the Closing
Date, to provide any information reasonably requested by the Trustee and
necessary to make such filing); and (vi) maintain such records relating to each
of REMIC I, REMIC II and REMIC III as may be necessary to prepare the foregoing
returns, schedules, statements or information, such records, for federal income
tax purposes, to be maintained on a
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calendar year and on an accrual basis. The Holder of the largest Percentage
Interest in the Class R-I, Class R-II or Class R-III Certificates shall be the
tax matters person of REMIC I, REMIC II or REMIC III, respectively, pursuant to
Treasury Regulations Section 1.860F-4(d). If more than one Holder should hold
an equal Percentage Interest in the Class R-I, Class R-I or Class R-III
Certificates larger than that held by any other Holder, the first such Holder
to have acquired such Class R-I, Class R-II or Class R-III Certificates shall
be such tax matters person. The Trustee shall act as attorney-in-fact and agent
for the tax matters person of each of REMIC I, REMIC II and REMIC III, and each
Holder of a Percentage Interest in the Class R-I, Class R-II or Class R-III
Certificates, by acceptance thereof, is deemed to have consented to the
Trustee's appointment in such capacity and agrees to execute any documents
required to give effect thereto, and any fees and expenses incurred by the
Trustee in connection with any audit or administrative or judicial proceeding
shall be paid by the Trust Fund. The Trustee shall not intentionally take any
action or intentionally omit to take any action if, in taking or omitting to
take such action, the Trustee knows that such action or omission (as the case
may be) would cause the termination of the REMIC status of REMIC I, REMIC II or
REMIC III or the imposition of tax on REMIC I, REMIC II or REMIC III (other
than a tax on income expressly permitted or contemplated to be received by the
terms of this Agreement). Notwithstanding any provision of this paragraph to
the contrary, the Trustee shall not be required to take any action that the
Trustee in good faith believes to be inconsistent with any other provision of
this Agreement, nor shall the Trustee be deemed in violation of this paragraph
if it takes any action expressly required or authorized by any other provision
of this Agreement, and the Trustee shall have no responsibility or liability
with respect to any act or omission of the Depositor or the Master Servicer or
a Special Servicer which causes the Trustee to be unable to comply with any of
clauses (i) through (vi) of the fifth preceding sentence or which results in
any action contemplated by clauses (i) or (ii) of the next succeeding sentence.
In this regard the Trustee shall (i) exercise reasonable care not to allow the
occurrence of any "prohibited transactions" with the meaning of Code Section
860F(a), unless the party seeking such action shall have delivered to the
Trustee an Opinion of Counsel (at such party's expense) that such occurrence
would not (A) result in a taxable gain, (B) otherwise subject REMIC I, REMIC II
or REMIC III to tax (other than a tax at the highest marginal corporate tax
rate on net income from foreclosure property), or (C) cause any of REMIC I,
REMIC II or REMIC III to fail to qualify as a REMIC; and (ii) exercise
reasonable care not to allow the Trust Fund to receive income from the
performance of services or from assets not permitted under the REMIC Provisions
to be held by a REMIC (provided, however, that the receipt of any income
expressly permitted or contemplated by the terms of this Agreement shall not be
deemed to violate this clause). None of the Master Servicer, the Special
Servicers and the Depositor shall be responsible or liable (except in
connection with any act or
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omission referred to in the second preceding sentence) for any failure by the
Trustee to comply with the provisions of this Section 4.6. The Depositor, the
Special Servicers and the Master Servicer shall cooperate in a timely manner
with the Trustee in supplying any information within the Depositor's,any
Special Servicer's or the Master Servicer's control (other than any
confidential information) that is reasonably necessary to enable the Trustee to
perform its duties under this Section 4.6.
(b) The following assumptions are to be used for purposes of
determining the anticipated payments of principal and interest for calculating
the original yield to maturity and original issue discount with respect to the
Regular Certificates: (i) each Mortgage Loan will pay principal and interest in
accordance with its terms and scheduled payments will be timely received on
their Due Dates, provided that the Mortgage Loans in the aggregate will prepay
in accordance with the Prepayment Assumption; and (ii) no Mortgage Loan is
repurchased by the Depositor.
SECTION 4.7. Imposition of Tax on the Trust Fund.
In the event that any tax, including interest, penalties or
assessments, additional amounts or additions to tax, is imposed on REMIC I,
REMIC II or REMIC III, such tax shall be charged against amounts otherwise
distributable to the Holders of the Certificates; provided, that any taxes
imposed on any net income from foreclosure property pursuant to Code Section
860G(d) or any similar tax imposed by a state or local jurisdiction shall
instead be treated as an expense of the related REO Property in determining Net
REO Proceeds with respect to such REO Property (and until such taxes are paid,
the Master Servicer from time to time shall withdraw from the Collection
Account amounts reasonably determined by the applicable Special Servicer to be
necessary to pay such taxes, which the Master Servicer shall maintain in a
separate, non-interest-bearing account, and the Master Servicer shall deposit
in the Collection Account the excess determined by the Master Servicer from
time to time of the amount in such account over the amount necessary to pay
such taxes) and shall be paid therefrom. Except as provided in the preceding
sentence, the Trustee is hereby authorized to and shall retain or cause to be
retained from the Available Distribution Amount sufficient funds to pay or
provide for the payment of, and to actually pay, such tax as is legally owed by
REMIC I, REMIC II and REMIC III (but such authorization shall not prevent the
Trustee from contesting, at the expense of the Trust Fund, any such tax in
appropriate proceedings, and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings). The Trustee is hereby authorized
to and shall segregate or cause to be segregated, in a separate non-interest
bearing account, (i) the net income from any "prohibited transaction" under
Code Section 860F(a) or (ii) the amount of any contribution to REMIC I, REMIC
II or REMIC III
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after the Startup Day that is subject to tax under Code Section 860G(d) and use
such income or amount, to the extent necessary, to pay such tax, such amounts
to be segregated from the Collection Account with respect to any such net
income of or contribution to REMIC I and from the Distribution Accounts with
respect to any such net income of or contribution to REMIC II and REMIC III
(and return the balance thereof, if any, to the Collection Account or the
applicable Distribution Account, as the case may be). To the extent that any
such tax is paid to the Internal Revenue Service, the Trustee shall retain an
equal amount from future amounts otherwise distributable to the Holders of the
Class R-I, Class R-II or the Class R-III Certificates as the case may be, and
shall distribute such retained amounts to the Holders of REMIC I Interests,
REMIC II Interests or Regular Certificates, as applicable, until they are fully
reimbursed and then to the Holders of the Class R-I Certificates, the Class
R-II Certificates or the Class R-III Certificates, as applicable. None of the
Master Servicer, the Special Servicers and the Trustee shall be responsible for
any taxes imposed on REMIC I, REMIC II or REMIC III, in any case, except to the
extent such tax is attributable to a breach of a representation or warranty of
the Master Servicer or any Special Servicer or an act or omission of the Master
Servicer, any Special Servicer or the Trustee in contravention of this
Agreement, provided, further, that such breach, act or omission results in
liability under Section 6.3 in the case of the Master Servicer or a Special
Servicer or Section 8.5, in the case of the Trustee. Notwithstanding anything
in this Agreement to the contrary, in each such case, the Master Servicer shall
not be responsible for the Trustee's or any Special Servicer's breaches, acts
or omissions, and the Trustee shall not be responsible for the breaches, acts
or omissions of the Master Servicer or any Special Servicer, and no Special
Servicer shall be responsible for the Trustee's, the Master Servicer's or any
other Special Servicer's breaches, acts or omissions
SECTION 4.8. Remittances; P&I Advances.
(a) On the Remittance Date immediately preceding each
Distribution Date, the Master Servicer shall:
(i) remit to the Trustee from the Collection Account
for deposit in the Distribution Accounts an amount equal to
the Prepayment Premiums received by the Master Servicer in
the Collection Period preceding such Remittance Date;
(ii) remit to the Trustee from the Collection
Account the Trustee Fee payable on such Remittance Date;
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(iii) remit to the Trustee from the Collection
Account for deposit in the Distribution Accounts an amount
equal to the Available Distribution Amount for such
Distribution Date (excluding P&I Advances); and
(iv) make any required P&I Advance, by deposit into
the Collection Account, and remit such amount to the Trustee
for deposit in the REMIC I Distribution Account.
(b) If, as of 5:00 p.m., New York City time, on any
Remittance Date the Master Servicer shall not (i) have made a P&I Advance
required to have been made on such date pursuant to the definition of such term
or delivered the certificate and documentation related to a determination of
nonrecoverability, the Trustee shall immediately notify the Fiscal Agent by
telephone promptly confirmed in writing, and the Trustee shall no later than
10:00 a.m., New York City time, on the related Distribution Date deposit into
the Distribution Account in immediately available funds an amount equal to the
P&I Advances otherwise required to have been made by the Master Servicer. If
the Trustee fails to make any P&I Advance required to be made under this
Section 4.8, the Fiscal Agent shall make such P&I Advance not later than 12:00
p.m., New York City time, on such Distribution Date and, thereby, the Trustee
shall not be in default under this Agreement.
(c) Anything to the contrary in this Agreement
notwithstanding, none of the Master Servicer, the Trustee or the Fiscal Agent
shall be obligated to make a P&I Advance on any date on which a P&I Advance is
otherwise required to be made by this Section 4.8 if the Master Servicer, the
Trustee or the Fiscal Agent, as applicable, determines that such Advance will
be a Nonrecoverable Advance. The Trustee and the Fiscal Agent shall be entitled
to rely, conclusively, on any determination by the Master Servicer that a P&I
Advance, if made, would be a Nonrecoverable Advance. The Trustee and the Fiscal
Agent, in determining whether or not a P&I Advance previously made is, or a
proposed P&I Advance, if made, would be, a Nonrecoverable Advance shall be
subject to the standards applicable to the Master Servicer hereunder.
(d) The Master Servicer, the Trustee or the Fiscal Agent, as
applicable, shall be entitled to, and the Master Servicer hereby covenants and
agrees to promptly seek and effect, the reimbursement of P&I Advances it makes,
together with any related Advance Interest Amount in respect of such P&I
Advances to the extent permitted pursuant to Section 3.7(iii).
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SECTION 4.9. Allocation of Realized Losses and
Additional Trust Fund Expenses.
(a) REMIC I.
(i) Except as provided in subsection (iii), on each
Distribution Date:
(A) Prior to making distributions on such Distribution Date,
Realized Interest Losses on each Mortgage Loan, Separate Loan Advance,
and REO Property shall be allocated to reduce first, Distributable
Certificate Interest on the corresponding REMIC I Interest for the
current Distribution Date, and then outstanding Distributable
Certificate Interest owing on the corresponding REMIC I Interest for
prior Distribution Dates, and to the extent that such Realized
Interest Loss exceeds such amount, shall be treated as an Additional
Trust Fund Expense and allocated as provided in paragraph (C) below;
(B) Realized Principal Losses on each Mortgage Loan, Separate
Loan Advance, and REO Property realized during the related Collection
Period shall reduce the Certificate Balance of the corresponding REMIC
I Interest; and
(C) Additional Trust Fund Expenses realized during the
related Collection Period shall be allocated among the REMIC I
Interests in proportion to their Certificate Balances after making all
other allocations for such Distribution Date.
(ii) In the event that the Master Servicer, the Trustee, or
the Fiscal Agent determines that an Advance previously made by it is a
Nonrecoverable Advance and the Master Servicer withdraws the amount of such
Advance from the Collection Account pursuant to Section 3.7 hereof, prior to
making any distribution on such Distribution Date, the Master Servicer shall
determine, consistent with Section 1.2(b), the portion of the amount so
withdrawn that is attributable to (w) interest on the related Mortgage Loan;
(x) principal on the related Mortgage Loan; (y) Property Advances; and (z) the
Advance Interest Amount. The portion of the amount so withdrawn from the
Collection Account that is allocable to:
(A) amounts previously advanced as interest on the related
Mortgage Loan shall be allocated by the Trustee to reduce the amount
of interest paid on each REMIC I Interest on such Distribution Date in
proportion to Distributable Certificate Interest otherwise payable
thereon and shall result in the creation of
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or increase in overdue Distributable Certificate Interest on each such
REMIC I Interest;
(B) amounts previously advanced as principal on the related
Mortgage Loan shall be allocated by the Trustee to reduce the
principal paid on each REMIC I Interest on which principal would
otherwise be paid on such Distribution Date, in proportion to such
principal payments; and
(C) amounts previously advanced as Property Advances, as well
as any Advance Interest Amount owing to the Master Servicer, a Special
Servicer, the Trustee, or the Fiscal Agent with respect to Advances on
such Mortgage Loan shall be treated as Additional Trust Fund Expenses
and allocated by the Trustee in accordance with paragraph (i)(C)
above.
(iii) At such time as a Final Recovery Determination is made
with respect to any Mortgage Loan with respect to which the Master Servicer
previously had withdrawn amounts from the Collection Account following a
determination that Advances previously made were Nonrecoverable Advances (as
provided in clause (ii)), or at such other time as a Realized Loss shall occur
with respect to any such Mortgage Loan, the Master Servicer shall compute the
Realized Loss with respect to such Mortgage Loan and the Trustee shall make
allocations as follows:
(A) any Realized Interest Loss shall be allocated to the
corresponding REMIC I Interest to the extent of outstanding overdue
Distributable Certificate Interest thereon and any remaining portion
of the Realized Interest Loss shall be allocated as a Realized
Interest Loss on each REMIC I Interest with respect to which an
interest shortfall was created pursuant to Section 4.9(a)(ii)(A) above
in proportion to the amount of outstanding overdue Distributable
Certificate Interest resulting from the reduction in distributions of
interest on such REMIC I Interest pursuant to Section 4.9(a)(ii)(A)
above;
(B) to the extent that any Realized Principal Loss does not
exceed the Certificate Balance on the corresponding REMIC I Interest,
such Realized Principal Loss shall be allocated to such REMIC I
Interest; and to the extent that any Realized Principal Loss exceeds
the Certificate Balance of the corresponding REMIC I Interest, such
Realized Principal Loss shall be allocated to the other corresponding
REMIC I Interests the distributions of principal on which were reduced
pursuant to Section 4.9(a)(ii)(B) above, in proportion to the amount
of such reductions;
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(C) the portion of the amount recovered on the Mortgage Loan
with respect to which amounts were withdrawn from the Collection
Account that are treated as recoveries of interest on the Mortgage
Loan shall be applied first, to make payments of outstanding overdue
Distributable Certificate Interest on the corresponding REMIC I
Interest and thereafter to make payments of interest on each REMIC I
Interest with respect to which an overdue Distributable Certificate
Interest was created pursuant to Section 4.9(a)(ii)(A) above in
proportion to the amount of outstanding overdue Distributable
Certificate Interest resulting from the reduction in distributions of
interest on such REMIC I Interest pursuant to Section 4.9(a)(ii)(A)
above;
(D) the portion of the amount recovered on the Mortgage Loan
with respect to which amounts were withdrawn from the Collection
Account treated as recoveries of principal on the Mortgage Loan shall
be applied first, to make payments of principal on the corresponding
REMIC I Interest until the Certificate Balance thereof is reduced to
zero and thereafter to make payments of principal to the corresponding
REMIC I Interests with respect to which principal distributions were
reduced pursuant to Section 4.9(a)(ii)(B) above, in proportion to the
amount of such reductions; and
(E) the portion of the amount recovered on the Mortgage Loan
with respect to which amounts were withdrawn from the Collection
Account that is treated as a recovery of expenses on the Mortgage Loan
shall be applied in reimbursement of Additional Trust Fund Expenses on
each REMIC I Interest with respect to which an Additional Trust Fund
Expense was created pursuant to Section 4.9(a)(ii)(C) above in
proportion to the amount of the Additional Trust Fund Expense
allocated thereto pursuant to Section 4.9(a)(ii)(C) above.
(b) REMIC II.
On each Distribution Date, Realized Losses and
Additional Trust Fund Expenses on the REMIC I Interests shall be allocated as
follows:
(A) except in the case of the NOM Mortgage Loan, to
the Class G-II, Class F-2-II, Class F-1-II, Class E-II, Class D-II, Class C-II,
and Class B-II Interests, in that order, and thereafter to the Class A-1-II,
Class A-2-II, Class A-3-II, and Class A-4-II Interests, pro rata in proportion
to their outstanding Certificate Balances to the extent thereof;
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(B) in the case of the NOM Mortgage Loan, to the
Class F-1- II, Class G-II, Class F-2-II, Class E-II, Class D-II, Class C-II,
and Class B-II Interests, in that order, and thereafter to the Class A-1-II,
Class A-2-II, Class A-3- II, and Class A-4-II Interests, pro rata in proportion
to their outstanding Certificate Balances to the extent thereof;
provided that, in the case of clause (A) and clause (B) the amount of Realized
Losses or Additional Trust Fund Expenses allocated to the REMIC II Interests
shall not exceed the amount by which the Certificate Balance of the REMIC I
Interests exceeds the Stated Principal Balance of the Mortgage Loans.
(c) REMIC III.
(i) On each Distribution Date, Realized Losses on the REMIC I
Interests allocated to the REMIC II Interests shall be allocated as follows:
(A) except in the case of the NOM Mortgage Loan, to the
Class G, Class F-2, Class F-1, Class E, Class D, Class C, and Class B
Certificates, in that order, and thereafter to the Class A-1, Class A-2, Class
A-3 and Class A-4 Certificates, pro rata in proportion to their outstanding
Certificate Balances (or, in the case of allocations that reduce Distributable
Certificate Interest, in proportion thereto) ; and
(B) in the case of the NOM Mortgage Loan, to the
Class F-1, Class G, Class F-2, Class E, Class D, Class C, and Class B
Certificates, in that order, and thereafter to the Class A-1, Class A-2, Class
A-3 and Class A-4 Certificates, pro rata in proportion to their outstanding
Certificate Balances (or, in the case of allocations that reduce Distributable
Certificate Interest, in proportion thereto).
(ii) On each Distribution Date, any Additional Trust Fund
Expenses with respect to REMIC III with respect to such Distribution Date shall
be allocated to reduce the Certificate Balance of the Class G, Class F-2, Class
F-1, Class E, Class D, Class C and Class B Certificates, in that order, until
the Certificate Balances thereof have been reduced to zero. In the event of any
further remaining Additional Trust Fund Expenses, such amount shall be
allocated pro rata based on Certificate Balance to the Class A-1, Class A-2,
Class A-3 and Class A- 4 Certificates.
SECTION 4.10. Method of Payment.
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Each distribution pursuant to this Article IVshall be made by
(a) check mailed to such Holder's address as it appears on the Certificate
Register of the Certificate Registrar, or (b) upon written request made to the
Trustee or the Paying Agent at least five Business Days prior to the related
Record Date (or upon standing instructions given to the Trustee or the Paying
Agent on the Closing Date or five Business Days prior to any Record Date, which
instructions may be revoked at any time thereafter upon written notice to the
same five Business Days prior to the related Record Date), by wire transfer in
immediately available funds to an account specified in the request of such
Holder; provided, however, that the final distribution in respect of any
Certificate shall be made only upon presentation and surrender of such
Certificate at the Corporate Trust Office or such other location as specified
in a notice delivered pursuant to Section 9.1(e) regarding such final
distribution sent by the Trustee to the Holders.
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ARTICLE V
THE CERTIFICATES
SECTION 5.1. The Certificates.
The Certificates consist of the Class A-1 Certificates, the
Class A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates,
the Class IO Certificates, the Class B Certificates, the Class C Certificates,
the Class D Certificates, the Class E Certificates, the Class F-1 Certificates,
the Class F-2 Certificates, the Class G Certificates, the Class R-I
Certificates, the Class R-II Certificates and the Class R-III Certificates.
The Class A-1, Class A-2, Class A-3, Class A-4, Class IO,
Class B, Class C, Class D, Class E, Class F-1, Class F-2, Class G, Class R-I,
Class R-II and Class R-III Certificates will be substantially in the forms
annexed hereto as Exhibits ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, A-7, ▇-▇, ▇-▇, ▇-▇▇,
▇-▇▇, ▇-▇▇, ▇-▇▇, ▇-▇▇ and A-15, respectively. The Component A-1-II, Component
A-2-II, Component A-3-II, Component B-II, Component C-II, Component D-II,
Component E-II and Component F/G-II of the Class IO Certificate will be
available in separate definitive physical form only and will be substantially
in the forms annexed hereto as Exhibits ▇-▇▇, ▇-▇▇, ▇-▇▇, ▇-▇▇, ▇-▇▇, ▇-▇▇,
▇-▇▇ and A-23, respectively. The Certificates of each Class will be issuable in
definitive physical form only, registered in the name of the holders thereof;
provided, however, that in accordance with Section 5.3 beneficial ownership
interests in the Class A-1, Class A-2, Class A-3, Class A-4, Class B, Class C,
Class D, and Class E Certificates and Class F-1, Class F-2 and Class G
Certificates beneficially owned by Qualified Institutional Buyers shall
initially be represented by Book-Entry Certificates held and transferred
through the book-entry facilities of the Securities Depository, in minimum
denominations of authorized initial Certificate Balance, as described in the
succeeding table, except one Certificate of each of Class G and Class IO (and
Component F/G-II thereof) may be issued which represents a different initial
Certificate Balance to accommodate the remainder of the initial Certificate
Balance. Each Certificate will share ratably in all rights of the related
Class. The Class R-I, Class R-II and Class R-III Certificates shall each be
issuable in one or more registered, definitive physical certificates in minimum
denominations of 5% Percentage Interests and integral multiples of a 1%
Percentage Interest in excess thereof and together aggregating the entire 100%
Percentage Interest in each such Class.
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Aggregate Denominations
of all Certificates of Class
Minimum (in initial Certificate Balance or
Class Denomination initial Notional Amount)
----- ------------ -----------------------------
A-1 $ 1,000 $142,191,000.00
A-2 $ 1,000 $117,378,000.00
A-3 $ 1,000 $220,490,334.00
A-4 $ 1,000 $ 96,908,666.00
IO $ 1,000 $751,574,263.14
B $ 1,000 $ 59,394,000.00
C $ 1,000 $ 46,666,000.00
D $ 1,000 $ 46,667,000.00
E $ 1,000 $ 16,969,000.00
F-1 $250,000 $ 10,000,000.00
F-2 $250,000 $ 40,909,000.00
G $250,000 $ 50,909,929.14
Any of the Certificates may be issued with appropriate
insertions, omissions, substitutions and variations, and may have imprinted or
otherwise reproduced thereon such legend or legends, not inconsistent with the
provisions of this Agreement, as may be required to comply with any law or with
rules or regulations pursuant thereto, or with the rules of any securities
market in which the Certificates are admitted to trading, or to conform to
general usage.
Each Certificate may be printed or in typewritten or similar
form, and each Certificate shall, upon original issue, be executed by the
Trustee and authenticated by the Trustee or the Authenticating Agent and
delivered to the Depositor. All Certificates shall be executed by manual or
facsimile signature on behalf of the Trustee or Authenticating Agent by an
authorized officer or signatory. Certificates bearing the signature of an
individual who was at any time the proper officer or signatory of the Trustee
or Authenticating Agent shall bind the Trustee or Authenticating Agent,
notwithstanding that such individual has ceased to hold such office or position
prior to the delivery of such Certificates or did not hold such office or
position at the date of such Certificates. No Certificate shall be entitled to
any benefit under this Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication in the form set
forth in Exhibits A-1 through A-15 executed by the Authenticating Agent by
manual signature, and such certificate of authentication upon any Certificate
shall be conclusive evidence, and the only evidence, that such Certificate has
been duly authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication.
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SECTION 5.2. Registration, Transfer and Exchange of
Certificates.
(a) The Trustee shall keep or cause to be kept at the
Corporate Trust Office books (the "Certificate Register") for the registration,
transfer and exchange of Certificates (the Trustee, in such capacity, being the
"Certificate Registrar"). The names and addresses of all Certificateholders and
the names and addresses of the transferees of any Certificates shall be
registered in the Certificate Register. The Person in whose name any
Certificate is so registered shall be deemed and treated as the sole owner and
Holder thereof for all purposes of this Agreement and the Certificate
Registrar, the Master Servicer, the Special Servicers, the Trustee, the Fiscal
Agent, any Paying Agent and any agent of any of them shall not be affected by
any notice or knowledge to the contrary. A Definitive Certificate is
transferable or exchangeable only upon the surrender of such Certificate to the
Certificate Registrar at the Corporate Trust Office together with an assignment
and transfer (executed by the Holder or his duly authorized attorney), subject
to the requirements of this Section 5.2. Upon request of the Trustee, the
Certificate Registrar shall provide the Trustee with the names, addresses and
Percentage Interests of the Holders.
(b) Upon surrender for registration of transfer of any
Definitive Certificate, subject to the requirements of this Section 5.2, the
Trustee shall execute and the Authenticating Agent shall duly authenticate in
the name of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate Certificate
Balance. Such Certificates shall be delivered by the Certificate Registrar in
accordance with this Section 5.2. Each Certificate surrendered for registration
of transfer shall be cancelled and subsequently destroyed by the Certificate
Registrar. Each new Certificate issued pursuant to this Section 5.2 shall be
registered in the name of any Person as the transferring Holder may request,
subject to the provisions of this Section 5.2.
(c) The exchange, transfer and registration of transfer of
Definitive Certificates that are Privately Placed Certificates shall be subject
to the restrictions set forth below (in addition to the other provisions of
this Section 5.2):
(i) The Certificate Registrar shall register the
transfer of a Definitive Certificate that is a
Privately Placed Certificate if the requested
transfer is being made to a transferee who has
provided the Certificate Registrar with an
Investment Representation Letter substantially in
the form of Exhibit D-1 hereto (an "Investment
Representation Letter"), to the effect that the
transfer is being
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made to a Qualified Institutional Buyer in
accordance with Rule 144A; or
(ii) The Certificate Registrar shall register the
transfer of a Definitive Certificate that is a
Privately Placed Certificate, if prior to the
transfer, the transferee furnishes to the
Certificate Registrar (1) an Investment
Representation Letter to the effect that the
transfer is being made to an Institutional
Accredited Investor in accordance with an applicable
exemption under the 1933 Act, (2) an Opinion of
Counsel acceptable to the Certificate Registrar that
such transfer is in compliance with the 1933 Act,
and (3) a written undertaking by the transferor to
reimburse the Trust for any costs incurred by it in
connection with the proposed transfer. In addition,
the Certificate Registrar may, as a condition of the
registration of any such transfer, require the
transferor to furnish such other certificates, legal
opinions or other information (at the transferor's
expense) as the Certificate Registrar may reasonably
require to confirm that the proposed transfer is
being made pursuant to an exemption from, or in a
transaction not subject to, the registration
requirements of the 1933 Act and other applicable
laws.
(d) Subject to the restrictions on transfer and exchange set
forth in this Section 5.2, the Holder of one or more Certificates may transfer
or exchange the same in whole or in part (with a Certificate Balance equal to
any authorized denomination) by surrendering such Certificate at the Corporate
Trust Office or at the office of any transfer agent appointed as provided under
this Agreement, together with an instrument of assignment or transfer (executed
by the Holder or its duly authorized attorney), in the case of transfer, and a
written request for exchange in the case of exchange. Subject to the
restrictions on transfer set forth in this Section 5.2, following a proper
request for transfer or exchange, the Certificate Registrar shall, within five
Business Days of such request if made at the Corporate Trust Office, execute
and deliver at the Corporate Trust Office to the transferee (in the case of
transfer) or the Holder (in the case of exchange) or send by first class mail
(at the risk of the transferee in the case of transfer or the Holder in the
case of exchange) to such address as the transferee or the Holder, as
applicable, may request, a Definitive Certificate or Certificates, as the case
may require, for a like aggregate Certificate Balance and in such authorized
denomination or denominations as may be requested. The presentation for
transfer or exchange of any Definitive Certificate shall not be valid unless
made at the Corporate Trust Office by the registered Holder in person, or by a
duly authorized
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attorney-in-fact. The Certificate Registrar may decline to accept any request
for an exchange or registration of transfer of any Certificate during the
period of 15 days preceding any Distribution Date.
(e) Definitive Certificates may only be transferred to
Eligible Investors as described herein. In the event the Certificate Registrar
shall determine that a Definitive Certificate is being held by or for the
benefit of a Person who is not an Eligible Investor, or that such holding is
unlawful under the laws of a relevant jurisdiction, then the Certificate
Registrar shall void such transfer, if permitted under applicable law.
(f) No fee or service charge shall be imposed by the
Certificate Registrar for its services in respect of any registration of
transfer or exchange referred to in this Section 5.2 other than for transfers
to Institutional Accredited Investors, as provided herein. In connection with
any transfer to an Institutional Accredited Investor, the transferor shall
reimburse the Trust for any costs (including the cost of the Certificate
Registrar's counsel's review of the documents and any legal opinions submitted
by the transferor or transferee to the Certificate Registrar as provided
herein) incurred by the Certificate Registrar in connection with such transfer.
The Certificate Registrar may require payment by each transferor of a sum
sufficient to cover any tax, expense or other governmental charge payable in
connection with any such transfer.
(g) Subject to the other provisions of this Section 5.2,
transfers of the Class R-I, R-II and Class R-III Certificates may be made only
in accordance with this Section 5.2(g), (i) and (j). The Certificate Registrar
shall register the transfer of a Class R-I, R-II or Class R-III Certificate if
(x) the transferor has advised the Certificate Registrar in writing that the
Certificate is being transferred to a Qualified Institutional Buyer or an
Institutional Accredited Investor; and (y) prior to transfer the transferor
furnishes to the Certificate Registrar an Investment Representation Letter. In
addition, the Certificate Registrar may, as a condition of the registration of
any such transfer, require the transferor to furnish such other certifications,
legal opinions or other information (at the transferor's expense) as they may
reasonably be required to confirm that the proposed transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the 1933 Act and other applicable laws.
(h) Neither the Depositor, the Master Servicer, any Special
Servicer, the Trustee nor the Certificate Registrar is obligated to register or
qualify any Class of Certificates under the 1933 Act or any other securities
law or to take any action not otherwise required under this Agreement to permit
the transfer of such Certificates
169
without registration or qualification. Any Certificateholder desiring to effect
such transfer shall, and does hereby agree to, indemnify the Depositor, the
Master Servicer, any Special Servicer, the Trustee, the Fiscal Agent and the
Certificate Registrar, against any loss, liability or expense that may result
if the transfer is not exempt from the registration requirements of the 1933
Act or is not made in accordance with such federal and state laws.
(i) No transfer of any Subordinate Certificate or a
beneficial ownership interest therein shall be made to an employee benefit plan
subject to the fiduciary responsibility provisions of ERISA, or Section 4975 of
the Code, or a governmental plan subject to any federal, state or local law
("Similar Law"), which is to a material extent, similar to the foregoing
provisions of ERISA or the Code (collectively, a "Plan") or (ii) an insurance
company that is using the assets of any insurance company separate account or
general account in which the assets of any such Plan are invested (or which are
deemed pursuant to ERISA or any Similar Law to include assets of Plans) to
acquire any such Subordinate Certificates, other than using assets of its
general account in circumstances where Sections I(a), III and IV of Prohibited
Transaction Class Exemption 95-60 of the United States Department of Labor are
satisfied and whereby such transfer and the subsequent holding of the
applicable Certificate would not constitute or result in a prohibited
transaction within the meaning of Section 406 or 407 of ERISA, Section 4975 of
the Code, or any Similar Law, or otherwise qualifies for exemptive relief under
Section 401(c) of ERISA and the regulations thereunder. Each transferee of an
interest in a Book-Entry Certificate evidencing the Class B, Class C, Class D,
Class E, Class F-1, Class F-2 and Class G Certificates will be deemed to have
made the representations and warranties set forth in the form of transfer or
representation letter set forth in Exhibit D-2 hereto. Each prospective
transferee of a Class B, Class C, Class D, Class E, Class F-1, Class F-2 and
Class G Certificate in the form of a Definitive Certificate and prospective
transferee of a Class R-I, Class R-II and Class R-III Certificate shall deliver
to the Depositor, the Certificate Registrar and the Trustee, (a) a transfer or
representation letter, substantially in the form of Exhibit D-2 hereto, stating
that either (i) it is not purchasing such Subordinate Certificates with the
assets of a Plan or (ii) part or all of the assets to
be used to purchase such Certificates constitutes assets of an insurance
company general account and PTCE 95-60 applies such that the use of such assets
to acquire and hold such Certificates shall not and will not constitute a
non-exempt prohibited transaction for purposes of ERISA and Section 4975 of the
Code, or (b) an Opinion of Counsel which establishes to the satisfaction of the
Depositor, the Trustee and the Certificate Registrar that the purchase or
holding of the Subordinate Certificate will not result in the assets of the
Trust Fund being deemed to be "plan assets" and subject to the fiduciary
responsibility or prohibited transaction provisions of ERISA, the Code, or any
170
Similar Law will not constitute or result in a prohibited transaction within
the meaning of Section 406 or Section 407 of ERISA or Section 4975 of the Code,
and will not subject the Master Servicer, any Special Servicer, the Depositor,
the Trustee or the Certificate Registrar to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code),
which Opinion of Counsel shall not be an expense of the Trustee, the Fiscal
Agent, the Trust Fund, the Master Servicer, any Special Servicer, the
Certificate Registrar or the Depositor. None of the Trustee, the Fiscal Agent,
the Master Servicer, any Special Servicer, and the Certificate Registrar will
register a Class R-I, Class R-II or Class R-III Certificate in any Person's
name unless such Person has provided the letter referred to in clause (a)
above. Any transfer of a Subordinate Certificate that would violate, or result
in a prohibited transaction under, ERISA or Section 4975 of the Code shall be
deemed absolutely null and void ab initio.
(j) Each Person who has or acquires any Ownership Interest in
a Class R-I, Class R-II or a Class R-III Certificate shall be deemed by the
acceptance or acquisition of such Ownership Interest to have agreed to be bound
by the following provisions, and the rights of each Person acquiring any
Ownership Interest in a Class R-I Certificate, Class R-II Certificate or a
Class R-III Certificate are expressly subject to the following provisions:
(i) Each Person acquiring or holding any Ownership
Interest in a Class R-I Certificate, Class R-II or a
Class R-III Certificate shall be a Permitted
Transferee and shall not acquire or hold such
Ownership Interest as agent (including as a broker,
nominee or other middleman) on behalf of any Person
that is not a Permitted Transferee. Any such Person
shall promptly notify the Certificate Registrar of
any change or impending change in its status (or the
status of the beneficial owner of such Ownership
Interest) as a Permitted Transferee. Any acquisition
described in the first sentence of this Section
5.2(j)(i) by a Person who is not a Permitted
Transferee or by a Person who is acting as an agent
of a Person who is not a Permitted Transferee shall
be void and of no effect, and the immediately
preceding owner who was a Permitted Transferee shall
be restored to registered and beneficial ownership
of the Ownership Interest as fully as possible.
(ii) No Ownership Interest in a Class R-I, Class R-II or
a Class R-III Certificate may be transferred, and no
such Transfer shall be
171
registered in the Certificate Register, without the
express written consent of the Certificate
Registrar, and the Certificate Registrar shall not
recognize a proposed Transfer, and such proposed
Transfer shall not be effective, without such
consent with respect thereto. In connection with any
proposed Transfer of any Ownership Interest in a
Class R-I, Class R-II or a Class R-III Certificate,
the Certificate Registrar shall, as a condition to
such consent, (x) require delivery to it in form and
substance satisfactory to it, and the proposed
transferee shall deliver to the Certificate
Registrar and to the proposed transferor, an
affidavit in substantially the form attached as
Exhibit C-1 (a "Transferee Affidavit") (A) that such
proposed transferee is a Permitted Transferee and
(B) stating that (i) the proposed transferee
historically has paid its debts as they have come
due and intends to do so in the future, (ii) the
proposed transferee understands that, as the holder
of an Ownership Interest in a Class R-I, Class R-II
or a Class R-III Certificate, as applicable, it may
incur liabilities in excess of cash flows generated
by the residual interest, (iii) the proposed
transferee intends to pay taxes associated with
holding the Ownership Interest as they become due,
(iv) the proposed transferee will not transfer the
Ownership Interest to any Person that does not
provide a Transferee Affidavit or as to which the
proposed transferee has actual knowledge that such
Person is not a Permitted Transferee or is acting as
an agent (including as a broker, nominee or other
middleman) for a Person that is not a Permitted
Transferee, and (v) the proposed transferee
expressly agrees to be bound by and to abide by the
provisions of this Section 5.2(j) and (y) other than
in connection with the initial issuance of the Class
R-I, Class R- II and Class R-III Certificates,
require a statement from the proposed transferor
substantially in the form attached as Exhibit C-2
(the "Transferor Letter"), that the proposed
transferor has no actual knowledge that the proposed
transferee is not a Permitted Transferee and has no
actual knowledge or reason to know that the proposed
transferee's statements in the preceding clauses
(x)(B)(i) or (iii) are false.
(iii) Notwithstanding the delivery of a Transferee
Affidavit by a proposed transferee under clause (ii)
above, if a Responsible Officer of the Certificate
Registrar has actual knowledge that the
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proposed transferee is not a Permitted Transferee,
no Transfer to such proposed transferee shall be
effected and such proposed Transfer shall not be
registered on the Certificate Register; provided,
however, that the Certificate Registrar shall not be
required to conduct any independent investigation to
determine whether a proposed transferee is a
Permitted Transferee.
Upon notice to the Certificate Registrar that there has
occurred a Transfer to any Person that is a Disqualified Organization or an
agent thereof (including a broker, nominee, or middleman) in contravention of
the foregoing restrictions, and in any event not later than 60 days after a
request for information from the transferor of such Ownership Interest in a
Class R-I, Class R-II or a Class R-III Certificate, or such agent thereof, the
Certificate Registrar and the Trustee agree to furnish to the IRS and the
transferor of such Ownership Interest or such agent thereof such information
necessary to the application of Section 860E(e) of the Code as may be required
by the Code, including, but not limited to, the present value of the total
anticipated excess inclusions with respect to such Class R-I, Class R-II or
Class R-III Certificate (or portion thereof) for periods after such Transfer.
At the election of the Certificate Registrar and the Trustee, the Certificate
Registrar and the Trustee may charge a reasonable fee for computing and
furnishing such information to the transferor or to such agent thereof referred
to above; provided, however, that such Persons shall in no event be excused
from furnishing such information.
Neither the Trustee nor the Certificate Registrar shall have
any obligation or duty to monitor, determine or inquire as to compliance with
any restriction on transfer imposed under Article V of this Agreement or under
applicable law with respect to any transfer of any Certificate, or any interest
therein, other than to require delivery of the certification(s) and/or Opinions
of Counsel described in Article V applicable with respect to changes in
registration of record ownership of Certificates in the Certificate Register.
The Trustee and the Certificate Registrar shall have no liability for
transfers, including transfers made through the book-entry facilities of the
Securities Depository or between or among Securities Depository Participants or
beneficial owners of the Certificates, made in violation of applicable
restrictions.
SECTION 5.3. Book-Entry Certificates.
(a) The Class A-1 Certificates, the Class A-2 Certificates,
the Class A-3 Certificates, the Class A-4 Certificate, the Class B
Certificates, the Class C Certificates, the Class D Certificates and the Class
E Certificates and, to the extent beneficially owned by Qualified Institutional
Buyers, the Class F-1 Certificates, the
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Class F-2 Certificates and the Class G Certificates shall, in the case of each
such Class, initially be issued as one or more Book-Entry Certificates
registered in the name of the Securities Depository or its nominees and, except
as provided in subsection (c) or (d) below, transfer of such Certificates may
not be registered by the Certificate Registrar unless such transfer is to a
successor Securities Depository that agrees to hold such Certificates for the
respective Certificate Owners with Ownership Interests therein. Such
Certificate Owners shall hold and transfer their respective Ownership Interest
in and to such Certificates through the book-entry facilities of the Securities
Depository and, except as provided in subsection (c) or (d) below, shall not be
entitled to definitive, fully registered Certificates ("Definitive
Certificates") in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Securities Depository Participant or brokerage firm representing each such
Certificate Owner. Each Securities Depository Participant shall only transfer
the Ownership Interests in the BookEntry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Securities Depository's normal procedures. Neither the Certificate
Registrar nor the Trustee shall have any responsibility to monitor or restrict
the transfer of Ownership Interests in BookEntry Certificates through the
book-entry facilities of the Securities Depository.
(b) The Trustee, the Master Servicer, the Special Servicers,
the Fiscal Agent and the Certificate Registrar may for all purposes, including
the making of payments due on the Book-Entry Certificates, deal with the
Securities Depository as the authorized representative of the Certificate
Owners with respect to such Certificates for the purposes of exercising the
rights of Certificateholders hereunder. The rights of Certificate Owners with
respect to the Book-Entry Certificates shall be limited to those established by
law and agreements between such Certificate Owners and the Securities
Depository Participants and brokerage firms representing such Certificate
Owners. Multiple requests and directions from, and votes of, the Securities
Depository as Holder of the Book-Entry Certificates with respect to any
particular matter shall not be deemed inconsistent if they are made with
respect to different Certificate Owners. The Trustee may establish a reasonable
record date in connection with solicitations of consents from or voting by
Certificateholders and shall give notice to the Securities Depository of such
record date.
(c) If (i)(A) the Depositor advises the Trustee and the
Certificate Registrar in writing that the Securities Depository is no longer
willing or able to properly discharge its responsibilities with respect to any
Class of the Book-Entry Certificates, and (B) the Depositor is unable to locate
a qualified successor, or (ii) the
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Depositor at its option advises the Trustee and the Certificate Registrar in
writing that it elects to terminate the book-entry system through the
Securities Depository with respect to any Class of the Book-Entry Certificates,
the Certificate Registrar shall notify all affected Certificate Owners, through
the Securities Depository, of the occurrence of any such event and of the
availability of Definitive Certificates to such Certificate Owners requesting
the same. Upon surrender to the Certificate Registrar of any Class of the
Book-Entry Certificates by the Securities Depository, accompanied by
registration instructions from the Securities Depository for registration of
transfer, the Trustee shall execute, and the Certificate Registrar shall
authenticate and deliver, the Definitive Certificates to the Certificate Owners
identified in such instructions. None of the Depositor, the Master Servicer,
the Special Servicers, the Trustee, the Fiscal Agent or the Certificate
Registrar shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Certificates for purposes of
evidencing ownership of any of the Class A-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates, the Class A-4 Certificates, the Class
B Certificates, the Class C Certificates, the Class D Certificates, the Class E
Certificates, the Class F-1 Certificates, the Class F-2 Certificates or Class G
Certificates, the registered holders of such Definitive Certificates shall be
recognized as Certificateholders hereunder and, accordingly, shall be entitled
directly to receive payments on, to exercise Voting Rights with respect to, and
to transfer and exchange such Definitive Certificates.
(d) No Institutional Accredited Investor may hold the Class
F-1 Certificates, Class F-2 Certificates and Class G Certificates in the form
of Ownership Interests in Book-Entry Certificates. Such Classes of Certificates
may be held by Institutional Accredited Investors only in the form of
Definitive Certificates and any transfer of a beneficial interest in any such
Class of Certificates to an Institutional Accredited Investor shall be made
only in compliance with Section 5.2(c) hereof.
SECTION 5.4. Mutilated, Destroyed, Lost or Stolen
Certificates.
If (i) any mutilated Certificate is surrendered to the
Certificate Registrar, or the Certificate Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (ii)
there is delivered to the Certificate Registrar such security or indemnity as
may be required by it to save it, the Trustee, the Fiscal Agent, the Special
Servicers and the Master Servicer harmless, then, in the absence of actual
knowledge by a Responsible Officer of the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Trustee or the Authenticating Agent shall authenticate and the
Certificate Registrar shall deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen
175
Certificate, a new Certificate of the same Class and of like tenor and
Percentage Interest. Upon the issuance of any new Certificate under this
Section 5.4, the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Certificate Registrar) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.4 shall constitute complete and indefeasible
evidence of ownership of the corresponding interest in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 5.5. Appointment of Paying Agent.
The Trustee may appoint a paying agent for the purpose of
making distributions to Certificateholders pursuant to Section 4.3. The Trustee
shall cause such Paying Agent, if other than the Trustee or the Master
Servicer, to execute and deliver to the Master Servicer and the Trustee an
instrument in which such Paying Agent shall agree with the Master Servicer and
the Trustee that such Paying Agent will hold all sums held by it for payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums have been paid to such Certificateholders or disposed
of as otherwise provided herein. The initial Paying Agent shall be the Trustee.
The Paying Agent shall at all times be an entity having a long-term senior
unsecured debt rating of at least "BBB" by S&P and "Baa2" by ▇▇▇▇▇'▇, unless
each of the Rating Agencies has confirmed in writing that a lower rating shall
not result, in and of itself, in a downgrading, withdrawal or qualification of
the rating then assigned by such Rating Agency to any Class of the
Certificates.
SECTION 5.6. Access to Certificateholders' Names and
Addresses.
(a) If any Certificateholder (for purposes of this Section
5.6, an "Applicant") applies in writing to the Certificate Registrar, and such
application states that the Applicant desires to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Certificates and is accompanied by a copy of the communication which such
Applicant proposes to transmit, then the Certificate Registrar shall, at the
expense of such Applicant, within ten Business Days after the receipt of such
application, transmit such communication to the Certificateholders as of the
most recent Record Date; provided, however, if such communication relates to
performance by the Master Servicer, any Special Servicer or the Trustee of its
duties hereunder, the Certificate Registrar shall furnish or cause to be
furnished to such Applicant a list of the names and addresses of the
Certificateholders as of the most recent Record Date.
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(b) Every Certificateholder, by receiving and holding its
Certificate, agrees with the Trustee that the Trustee and the Certificate
Registrar shall not be held accountable in any way by reason of the disclosure
of any information as to the names and addresses of the Certificateholders
hereunder, regardless of the source from which such information was derived.
SECTION 5.7. Actions of Certificateholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Agreement to be given or taken
by Certificateholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Certificateholders in
person or by an agent duly appointed in writing; and except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, when required, to the Depositor,
any Special Servicer or the Master Servicer. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Agreement and conclusive in favor of the Trustee, the
Depositor, the Special Servicers and the Master Servicer, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any
Certificateholder of any such instrument or writing may be proved in any
reasonable manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other act by a Certificateholder shall bind every Holder of
every Certificate issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything done, or omitted
to be done, by the Trustee, the Depositor, any Special Servicer or the Master
Servicer in reliance thereon, whether or not notation of such action is made
upon such Certificate.
(d) The Trustee or Certificate Registrar may require such
additional proof of any matter referred to in this Section 5.7 as it shall deem
necessary.
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ARTICLE VI
THE DEPOSITOR, THE MASTER SERVICER AND THE SPECIAL SERVICER
SECTION 6.1. Liability of the Depositor, the Master
Servicer and the Special Servicers.
The Depositor, the Master Servicer and the Special Servicers
each shall be liable in accordance herewith only to the extent of the
obligations specifically imposed by this Agreement.
SECTION 6.2. Merger or Consolidation of the Master
Servicer and the Special Servicers.
Subject to the third paragraph of this Section 6.2, the
Master Servicer will keep in full effect its existence, rights and good
standing as a limited partnership under the laws of the State of Missouri and
will not jeopardize its ability to do business in each jurisdiction in which
one or more of the Mortgaged Properties are located or to protect the validity
and enforceability of this Agreement, the Certificates or any of the Mortgage
Loans and to perform its respective duties under this Agreement.
Subject to the following paragraph, each Special Servicer
will keep in full effect its existence, rights and good standing as a
corporation, a limited partnership or limited liability company, as the case
may be, under the laws of the jurisdiction of its organization and will not
jeopardize its ability to do business in each jurisdiction in which one or more
of the Mortgaged Properties for which it is responsible are located or to
protect the validity and enforceability of this Agreement, the Certificates or
any of the Specially Serviced Mortgage Loans for which it is responsible and to
perform its respective duties under this Agreement.
Each of the Master Servicer and the Special Servicers may be
merged or consolidated with or into any Person, or transfer all or
substantially all of its assets to any Person, in which case any Person
resulting from any merger or consolidation to which it shall be a party, or any
Person succeeding to its business, shall be the successor of the Master
Servicer or such Special Servicer, as applicable hereunder, and shall be deemed
to have assumed all of the liabilities of the Master Servicer or such Special
Servicer, as applicable hereunder, if each of the Rating Agencies has confirmed
in writing that such merger, consolidation or transfer and succession shall not
result, in and of itself, in a downgrading, withdrawal or qualification of the
rating then assigned by such Rating Agency to any Class of Certificates.
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SECTION 6.3. Limitation on Liability of the
Depositor, the Master Servicer and
Others.
Neither the Depositor, the Master Servicer, the Special
Servicers, nor any of the partners, owners, directors, officers, partners,
employees or agents of the Depositor or the Master Servicer or any Special
Servicer (or of any general partner of the Master Servicer or any Special
Servicer) shall be under any liability to the Trust Fund or the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor or the Master Servicer or the Special Servicers or any such Person
against any breach of warranties or representations made herein, or against any
specific liability imposed on the Master Servicer or any Special Servicer for a
breach of the applicable Servicing Standard, or against any liability which
would otherwise be imposed by reason of its respective willful misfeasance,
misrepresentation, bad faith, fraud or negligence in the performance of its
duties or by reason of negligent disregard of its respective obligations or
duties hereunder. The Depositor, the Master Servicer, the Special Servicers and
any partner, owner, director, officer, employee or agent of the Depositor, the
Master Servicer or the Special Servicers (or the respective general partners
of the Master Servicer or the Special Servicers) may rely in good faith on any
document of any kind which, prima facie, is properly executed and submitted by
any appropriate Person with respect to any matters arising hereunder. The
Depositor, the Master Servicer, the Special Servicers and any partner, owner,
director, officer, employee or agent of the Depositor, the Master Servicer or
any Special Servicer shall be indemnified and held harmless by the Trust Fund
against any loss, liability or expense incurred in connection with any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense incurred by reason of its respective willful misfeasance,
misrepresentation, bad faith, fraud or negligence or (in the case of the Master
Servicer or any Special Servicer) a breach of the applicable Servicing Standard
in the performance of its respective duties or by reason of negligent disregard
of its respective obligations or duties hereunder. Neither the Depositor nor
the Master Servicer nor the Special Servicers shall be under any obligation to
appear in, prosecute or defend any legal action unless such action is related
to its respective duties under this Agreement and in its opinion does not
expose it to any expense or liability; provided, however, that any of the
Depositor or the Master Servicer or the Special Servicers may in its discretion
undertake any such action related to its obligations hereunder which it may
deem necessary or desirable with respect to this Agreement and the rights and
duties of the parties hereto and the interests of the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom (except any liability arising from the Master
Servicer's or the Special Servicers' failure to comply with their
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obligations under Section 3.1 or 3.2(a)) shall be expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Master Servicer and the
Special Servicers shall be entitled to be reimbursed therefor from the
Collection Account as provided in Section 3.7(v) of this Agreement.
SECTION 6.4. Limitation on Resignation of the Master
Servicer and of the Special Servicers.
Without limiting the applicability of Section 6.2, the Master
Servicer and each of the Special Servicers may assign its respective rights and
delegate its respective duties and obligations under this Agreement in
connection with the sale or transfer of a substantial portion of its mortgage
servicing or asset management portfolio, provided that: (i) the purchaser or
transferee accepting such assignment and delegation (A) shall be satisfactory
to the Trustee, (B) shall be an established mortgage finance institution, bank
or mortgage servicing institution, organized and doing business under the laws
of any state of the United States or the District of Columbia, authorized under
such laws to perform the duties of a servicer of mortgage loans, and (C) shall
execute and deliver to the Trustee an agreement, in form and substance
reasonably satisfactory to the Trustee, which contains an assumption by such
Person of the due and punctual performance and observance of each covenant and
condition to be performed or observed by the Master Servicer or such Special
Servicer, as applicable, under this Agreement from and after the date of such
agreement; (ii) as evidenced by a letter from each Rating Agency delivered to
the Trustee, each Rating Agency's rating or ratings, if any, of the Regular
Certificates in effect immediately prior to such assignment and delegation will
not be qualified, downgraded or withdrawn as a result of such assignment and
delegation; (iii) the Master Servicer or such Special Servicer, as applicable,
shall not be released from its obligations under this Agreement that arose
prior to the effective date of such assignment and delegation under this
Section 6.4; and (iv) the rate at which the Servicing Fee or Special Servicing
Fee (or any component thereof) is calculated shall not exceed the rate in
effect prior to such assignment and delegation. Upon acceptance of such
assignment and delegation, the purchaser or transferee shall be the successor
to the Master Servicer or such Special Servicer hereunder, as applicable.
Except as provided in this Section 6.4, neither the Master
Servicer nor any Special Servicer shall resign from the obligations and duties
hereby imposed on it except upon determination that its duties hereunder are no
longer permissible under applicable law. Any such determination permitting the
resignation of the Master Servicer or a Special Servicer, as applicable, shall
be evidenced by an Opinion of
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Counsel (obtained at the resigning Master Servicer's expense) to such effect
delivered to the Trustee.
No resignation or removal of the Master Servicer or a Special
Servicer, as applicable, as contemplated by the preceding paragraphs shall
become effective until the Trustee or a successor Master Servicer or Special
Servicer, as applicable, shall have assumed the Master Servicer's or such
Special Servicer's responsibilities, duties, liabilities and obligations
hereunder.
SECTION 6.5. Rights of the Depositor and the Trustee
in Respect of the Master Servicer and
the Special Servicers.
Each of the Master Servicer and each of the Special Servicers
shall afford the Depositor, the Rating Agencies, and the Trustee, upon
reasonable notice, during normal business hours access to all records
maintained by it in respect of its rights and obligations hereunder and access
to its officers responsible for such obligations. Upon request, each of the
Master Servicer and each Special Servicer shall furnish to the Depositor, the
Rating Agencies and the Trustee its most recent financial statements and such
other information in its possession (which it is not prohibited by applicable
law or contract from disclosing) regarding its business, affairs, property and
condition, financial or otherwise, as shall be directly relevant to the
performance of the obligations hereunder of the Master Servicer or such Special
Servicer, as the case may be. Neither the Depositor nor the Trustee shall have
any responsibility or liability for any action or failure to act by the Master
Servicer or such Special Servicer and neither such Person is obligated to
supervise the performance of the Master Servicer or such Special Servicer under
this Agreement or otherwise.
ARTICLE VII
DEFAULT
SECTION 7.1. Events of Default.
"Event of Default", wherever used herein, with respect to the
Master Servicer or a Special Servicer, as applicable (except with respect to
item (vii) in the case of the Special Servicers) means any one of the following
events:
(i) any failure by the Master Servicer or such Special
Servicer, as applicable, to remit to the Collection
Account or any failure by the Master Servicer to
remit to the Trustee for deposit into the
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Distribution Accounts any amount required to be so
remitted by the Master Servicer or such Special
Servicer, as applicable, pursuant to and in
accordance with the terms of this Agreement; or
(ii) any failure on the part of the Master Servicer or
such Special Servicer, as applicable, duly to
observe or perform in any material respect any other
of the covenants or agreements, or the breach of any
representations or warranties provided herein on the
part of the Master Servicer or such Special
Servicer, which, in either event, materially and
adversely affects the interests of the
Certificateholders, the Master Servicer, the
applicable Special Servicer or the Trustee with
respect to any Mortgage Loan and which, in either
event, continues unremedied for a period of 30 days
(or, with respect to the Group 1 Mortgage Loan or
▇▇▇▇▇▇ Servicing Agreement, 65 days) after the date
on which written notice of such failure or breach,
requiring the same to be remedied, shall have been
given to the Master Servicer or such Special
Servicer by the Depositor or the Trustee, or to the
Master Servicer or such Special Servicer, the
Depositor and the Trustee by the Holders of
Certificates entitled to at least 25% of the
aggregate Voting Rights of any Class affected
thereby; or
(iii) confirmation in writing by any of the Rating
Agencies that the then-current rating assigned to
any Class of Certificates will be withdrawn,
downgraded or qualified if the Master Servicer or
such Special Servicer, as applicable, is not removed
as Master Servicer or Special Servicer, as
applicable, hereunder; or
(iv) a decree or order of a court or agency or
supervisory authority having jurisdiction in the
premises in an involuntary case under any present or
future federal or state bankruptcy, insolvency or
similar law for the appointment of a conservator or
receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have
been entered against the Master Servicer or such
Special Servicer, as applicable, and such decree or
order shall have remained in force, undischarged or
unstayed, for a period of 60 days; or
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(v) the Master Servicer or such Special Servicer, as
applicable, shall consent to the appointment of a
conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or
relating to the Master Servicer or such Special
Servicer, or of or relating to all or substantially
all of the property of either the Master Servicer or
such Special Servicer; or
(vi) the Master Servicer or such Special Servicer, as
applicable, shall admit in writing its inability to
pay its debts generally as they become due, file a
petition to take advantage of any applicable
insolvency or reorganization statute, make an
assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations; or
(vii) the Master Servicer shall fail to make any Advance
required to be made by the Master Servicer hereunder
(whether or not the Trustee or the Fiscal Agent
makes such Advance);
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Trustee may, and at the written direction of the
Holders of 25% of the aggregate Voting Rights of all Certificates, the Trustee
shall, by notice in writing to the Master Servicer or such Special Servicer, as
the case may be, terminate all of its respective rights and obligations under
this Agreement and in and to the Mortgage Loans and the proceeds thereof, other
than any rights it may have hereunder as a Certificateholder and any rights or
obligations that accrued prior to the date of such termination (including the
right to receive all amounts accrued or owing to it under this Agreement, plus
interest at the Reimbursement Rate on such amounts until received to the extent
such amounts bear interest as provided in this Agreement, with respect to
periods prior to the date of such termination, and the right to the benefits of
Section 6.3 notwithstanding any such termination); provided, however, that in
the event the Master Servicer and such Special Servicer are the same Person,
the Trustee may, and at the written direction of the Holders of 25% of the
aggregate Voting Rights of all Certificates, the Trustee shall require that any
termination of the Master Servicer shall constitute a termination of such
Special Servicer and vice versa. On or after the receipt by the Master Servicer
or such Special Servicer, as the case may be, of such written notice, all of
its authority and power under this Agreement, whether with respect to the
Certificates or the Mortgage Loans or otherwise, shall pass to and be vested in
the Trustee pursuant to and under this Section (notwithstanding any failure of
the Trustee to satisfy the criterion set forth in Section 6.4) and, without
limitation, the Trustee is
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hereby authorized and empowered to execute and deliver, on behalf of and at the
expense of the defaulting Master Servicer or Special Servicer, as the case may
be, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Mortgage Loans and
related documents, or otherwise. Each of the Master Servicer and the Special
Servicers, on behalf of itself, agrees in the event it is terminated pursuant
to this Section 7.1 promptly (and in any event no later than ten Business Days
subsequent to such notice) to provide, at its own expense, the Trustee or the
successor Master Servicer or Special Servicer (if other than the Trustee) with
all documents and records requested by the Trustee or the successor Master
Servicer or Special Servicer (if other than the Trustee) to enable the Trustee
or the successor Master Servicer or Special Servicer (if other than the
Trustee) to assume its functions hereunder, and to cooperate with the Trustee
and the successor to its responsibilities hereunder in effecting the
termination of its responsibilities and rights hereunder, including, without
limitation, the prompt transfer to the successor Master Servicer or Special
Servicer or the Trustee, as applicable, for administration by it of all cash
amounts which shall at the time be or should have been credited by the Master
Servicer or the Special Servicer to the Collection Account and any REO Account
or Reserve Account or thereafter be received with respect to the Mortgage
Loans, and shall promptly provide the Trustee or such successor Master Servicer
or Special Servicer (which may include the Trustee), as applicable, all
documents and records reasonably requested by it, such documents and records to
be provided in such form as the Trustee or such successor Master Servicer or
Special Servicer shall reasonably request (including electromagnetic form), to
enable it to assume the defaulting Master Servicer's or Special Servicer's
function hereunder. All reasonable costs and expenses of the Trustee and the
successor Master Servicer or successor Special Servicer incurred in connection
with the removal of the Master Servicer or a Special Servicer pursuant to this
Section 7.1, including transferring the Mortgage Files to the successor Master
Servicer (or copies of the Mortgage Files relating to Specially Serviced
Mortgage Loans to the Successor Special Servicer) and amending this Agreement
to reflect such succession as Master Servicer or successor Special Servicer,
shall be paid by the predecessor Master Servicer or Special Servicer upon
presentation of reasonable documentation of such costs and expenses; provided,
however, that if any such costs and expenses remain unpaid by the predecessor
Master Servicer or Special Servicer within a reasonable time after presentation
of such documentation, the Trustee and the successor Master Servicer or Special
Servicer (if other than the Trustee) may be reimbursed from the Collection
Account for such unpaid costs and expenses, which shall be deemed to be
expenses of the Trust Fund.
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SECTION 7.2. Trustee to Act; Appointment of
Successor.
On and after the time the Master Servicer or a Special
Servicer receives a notice of termination pursuant to Section 7.1, the Trustee
shall be its successor in such capacity in all respects under this Agreement
and the transactions set forth or provided for herein and, except as provided
herein, shall be subject to all the responsibilities, duties, limitations on
liability and liabilities relating thereto and arising thereafter placed on the
Master Servicer or such Special Servicer by the terms and provisions hereof;
provided, however, that (i) the Trustee shall have no responsibilities, duties,
liabilities or obligations with respect to any act or omission of the Master
Servicer or of such Special Servicer and (ii) any failure to perform, or delay
in performing, such duties or responsibilities caused by the terminated party's
failure to provide, or delay in providing, records, tapes, disks, information
or monies shall not be considered a default by any successor hereunder. The
appointment of a successor Master Servicer or Special Servicer shall not affect
any liability of the predecessor Master Servicer or Special Servicer, as
applicable, which may have arisen prior to its termination as Master Servicer
or Special Servicer. The Trustee shall not be liable for any of the
representations and warranties of such terminated Master Servicer or Special
Servicer herein or in any related document or agreement, for any acts or
omissions of the predecessor Master Servicer or Special Servicer, as
applicable, or for any losses incurred in respect of any Permitted Investment
by the Master Servicer pursuant to Section 3.9 hereunder nor shall the Trustee
be required to purchase any Mortgage Loan hereunder. As compensation therefore,
the Trustee as successor Master Servicer or Special Servicer shall be entitled
to all Servicing Compensation relating to the Mortgage Loans that accrue after
the date of the Trustee's succession to which the predecessor Master Servicer
or Special Servicer would have been entitled if the predecessor Master Servicer
or Special Servicer, as applicable, had continued to act hereunder. Unless
otherwise agreed to in writing by the Master Servicer and the Trustee, in the
event any Advances made by the Master Servicer, the Fiscal Agent or the
Trustee shall at any time be outstanding, or any amounts of interest thereon
shall be accrued and unpaid, all amounts available to repay Advances and
interest hereunder shall be applied entirely to the Advances made by the
Trustee and the Fiscal Agent (and the accrued and unpaid interest thereon),
until such Advances made by the Trustee and the Fiscal Agent (and accrued and
unpaid interest thereon) shall have been repaid in full. In addition to the
foregoing, any successor Master Servicer (which, for the purposes of this
sentence, shall not include the Trustee) shall be required to allocate funds
available for the payment of unreimbursed Advances (with interest thereon at
the Reimbursement Rate) on a first in, first out basis, which results in the
payment of unreimbursed Advances (with interest thereon at the Reimbursement
Rate) first to the predecessor Master Servicer. Notwithstanding the above,
the Trustee may, if it shall be
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unwilling to so act, or shall, if it is unable to so act, or if the Holders of
Certificates entitled to a majority of the aggregate Voting Rights so request
in writing to the Trustee, or if neither the Trustee nor the Fiscal Agent is
rated by each Rating Agency in one of its two highest long-term senior
unsecured debt rating categories, promptly appoint, or petition a court of
competent jurisdiction to appoint, any established mortgage loan servicing
institution, the appointment of which will not result in the downgrading,
withdrawal or qualification of the rating or ratings then assigned to any Class
of Certificates as evidenced in writing by each Rating Agency, as the successor
to the terminated Master Servicer or Special Servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
the terminated Master Servicer or Special Servicer hereunder. No appointment of
a successor to the terminated Master Servicer or Special Servicer hereunder
shall be effective until the assumption by such successor of all such
terminated Master Servicer's or Special Servicer's responsibilities, duties and
liabilities hereunder. Pending appointment of a successor to the terminated
Master Servicer or Special Servicer hereunder, unless the Trustee shall be
prohibited by law from so acting, the Trustee shall act in such capacity as
herein above provided. In connection with such appointment and assumption
described herein, the Trustee may make such arrangements for the compensation
of such successor out of payments on Mortgage Loans as it and such successor
shall agree; provided, however, that no such compensation shall be in excess of
that permitted the terminated party hereunder. The Depositor, the Trustee, the
Master Servicer, the Special Servicers and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
SECTION 7.3. Notification to Certificateholders.
(a) Upon any termination pursuant to Section 7.1 above or
appointment of a successor to the Master Servicer or a Special Servicer, the
Trustee shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to each Rating
Agency.
(b) Within 5 days after the occurrence of any Event of
Default of which a Responsible Officer of the Trustee has actual knowledge, the
Trustee shall transmit by mail to all Holders of Certificates and to each
Rating Agency notice of such Event of Default, unless such Event of Default
shall have been cured or waived.
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SECTION 7.4. Other Remedies of Trustee.
During the continuance of any Event of Default, so long as
such Event of Default shall not have been remedied, the Trustee, in addition to
the rights specified in Section 7.1, shall have the right, in its own name as
trustee of an express trust, to take all actions now or hereafter existing at
law, in equity or by statute to enforce its rights and remedies and to protect
the interests, and enforce the rights and remedies, of the Certificateholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filing of proofs of claim and debt in connection
therewith). In such event, the legal fees, expenses and costs of such action
and any liability resulting therefrom shall be expenses, costs and liabilities
of the Trust Fund, and the Trustee shall be entitled to be reimbursed therefor
from the Collection Account as provided in Section 3.7(v). Except as otherwise
expressly provided in this Agreement, no remedy provided for by this Agreement
shall be exclusive of any other remedy, and each and every remedy shall be
cumulative and in addition to any other remedy and no delay or omission to
exercise any right or remedy shall impair any such right or remedy or shall be
deemed to be a waiver of any Event of Default.
SECTION 7.5. Waiver of Past Events of Default;
Termination.
The Holders of Certificates evidencing not less than 66-2/3%
of the aggregate Voting Rights of the Certificates may, on behalf of all
Holders of Certificates, waive any default by the Master Servicer or a Special
Servicer in the performance of its obligations hereunder and its consequences,
except a default in making any required deposits to (including P&I Advances) or
payments from the Collection Account or the Distribution Accounts or in
remitting payments as received, in each case in accordance with this Agreement.
Upon any such waiver of a past default and the reimbursement to the Trustee of
all reasonable costs and expenses incurred by it in connection with such
default prior to such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
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ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of
Default of which a Responsible Officer of the Trustee has actual knowledge and
after the curing or waiver of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement and no permissive right of the Trustee shall be
construed as a duty. During the continuance of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge, the Trustee shall
exercise such of the rights and powers vested in it by this Agreement, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) The Trustee, upon receipt of any resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Trustee which are specifically required to be
furnished pursuant to any provision of this Agreement, shall examine them to
determine whether they conform on their face to the requirements of this
Agreement; provided, however, that, the Trustee shall not be responsible for
the accuracy or content of any such resolution, certificate, statement,
opinion, report, document, order or other instrument provided to it hereunder
by the Master Servicer, the Special Servicer, the Depositor or the Paying
Agent. If any such instrument is found not to conform on its face to the
requirements of this Agreement in a material manner, the Trustee shall report
such finding to the presenting party and request a correction of such
instrument.
(c) No provision of this Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that
the foregoing shall be subject to Section 8.2; and provided, further, that:
(i) Prior to the occurrence of an Event of Default of
which a Responsible Officer of the Trustee has
actual knowledge, and after the curing or waiver of
all such Events of Default which may have occurred,
the duties and obligations of the Trustee shall be
determined solely by the express provisions of this
Agreement, the Trustee shall not be liable except
for the
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performance of such duties and obligations as are
specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this
Agreement against the Trustee and, in the absence of
bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the opinions
expressed therein, upon any resolutions,
certificates, statements, reports, opinions,
documents, orders or other instruments furnished to
the Trustee that conform on their face to the
requirements of this Agreement without
responsibility for investigating the contents
thereof;
(ii) The Trustee shall not be personally liable for an
error of judgment made in good faith by a
Responsible Officer or Responsible Officers, unless
it shall be proven that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to
be taken by it in good faith in accordance with the
direction of Holders of Certificates entitled to a
majority of the aggregate Voting Rights (or such
other percentage as is specified herein) of each
affected Class, or of the aggregate Voting Rights of
the Certificates, relating to the time, method and
place of conducting any proceeding for any remedy
available to the Trustee, or exercising or omitting
to exercise any trust or power conferred upon the
Trustee, under this Agreement; and
(iv) Except as provided in the succeeding sentence, the
Trustee shall not be charged with knowledge of any
failure by the Depositor to comply with the
obligations of the Depositor hereunder or any
failure of the Master Servicer or the Special
Servicer to comply with the obligations of the
Master Servicer or the Special Servicer referred to
in clause (i), (ii) or (vii) of Section 7.1, or of
any breach or occurrence referred to in clause (iii)
through (vi) of Section 7.1, as the case may be,
unless a Responsible Officer of the Trustee obtains
actual knowledge of such failure, breach or
occurrence. The Trustee shall be deemed to have
actual knowledge of the Master Servicer's failure to
comply with its obligations listed in clause (i) of
Section 7.1 (except with respect to remittances to
the Collection Account), but only to the extent
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that the Master Servicer fails to remit the amounts
set forth in the Master Servicer Remittance Report,
or to provide scheduled reports, certificates and
statements when and as required to be delivered to
the Trustee pursuant to this Agreement.
(v) The Trustee and the Fiscal Agent shall not be under
any obligation to appear in, prosecute or defend any
legal action which is not incidental to their
respective duties as Trustee and Fiscal Agent in
accordance with this Agreement (and, if either does,
all legal expenses and costs of such action shall be
expenses and costs of the Trust Fund, and the
Trustee and the Fiscal Agent shall be entitled to be
reimbursed therefor from the Collection Account,
unless such legal action arises out of the
negligence or bad faith of the Trustee or the Fiscal
Agent, as the case may be, or any breach of a
representation, warranty or covenant of the Trustee
or the Fiscal Agent, as the case may be, contained
herein.
(vi) The execution by the Trustee of any forms or plans
of liquidation in connection with REMIC I, REMIC I
or REMIC III shall not constitute a representation
by the Trustee as to the adequacy of such form or
plan of liquidation.
The Trustee, in its capacity as Trustee, shall not be
required to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if in the Trustee's opinion the repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it, and none of the provisions contained in this Agreement shall in any
event require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Master Servicer or the Special
Servicer under this Agreement, except pursuant to Sections 3.24 or 4.6 or
during such time, if any, as the Trustee shall be the successor to, and be
vested with the rights, duties, powers and privileges of, the Master Servicer
or the Special Servicer in accordance with the terms of this Agreement. The
Trustee shall not be required to post any surety or bond of any kind in
connection with its performance of its obligations under this Agreement.
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SECTION 8.2. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.1:
(i) The Trustee may request and/or rely upon and shall
be protected in acting or refraining from acting
upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other
paper or document reasonably believed by it to be
genuine and to have been signed or presented by the
proper party or parties and the Trustee shall have
no responsibility to ascertain or confirm the
genuineness of any such party or parties;
(ii) The Trustee may consult with counsel and any advice
or 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) (A) The Trustee shall be under no obligation to
institute, conduct or defend any litigation
hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders,
pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be
incurred therein or thereby; (B) the right of the
Trustee to perform any discretionary act enumerated
in this Agreement shall not be construed as a duty,
and the Trustee shall not be answerable for other
than its negligence or willful misconduct in the
performance of any such act; provided, however, that
subject to the foregoing clause (A), nothing
contained herein shall relieve the Trustee of the
obligations, upon the occurrence of an Event of
Default (which has not been cured or waived) of
which a Responsible Officer of the Trustee has
actual knowledge, to exercise such of the rights and
powers vested in it by this Agreement, and to use
the same degree of care and skill in their exercise,
as a prudent person would exercise or use under the
circumstances in the conduct of such person's own
affairs;
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(iv) The Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good
faith and reasonably believed by it to be authorized
or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) The Trustee shall not be bound to make any
investigation into the facts or matters stated in
any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order,
approval bond or other paper or document,
unless requested in writing to do so by Holders of
Certificates entitled to a majority (or such other
percentage as is specified herein) of the aggregate
Voting Rights of any affected Class; provided,
however, that if the payment within a reasonable
time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of
the Trustee, not reasonably assured to the Trustee
by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable
indemnity against such expense or liability as a
condition to taking any such action. The reasonable
expense of every such investigation shall be paid by
the Master Servicer or the applicable Special
Servicer if an Event of Default shall have occurred
and be continuing relating to the Master Servicer or
such Special Servicer, respectively, and otherwise
by the Certificateholders requesting the
investigation; and
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either
directly or by or through agents or attorneys,
provided that the Trustee shall not otherwise be
relieved of its duties and obligations hereunder.
(b) Following the Start-up Day, the Trustee shall not, except
as expressly required by any provision of this Agreement, accept any
contribution of assets to the Trust Fund unless the Trustee shall have received
an Opinion of Counsel (the costs of obtaining such opinion to be borne by the
Person requesting such contribution) to the effect that the inclusion of such
assets in the Trust Fund will not cause REMIC I, REMIC II or REMIC III to fail
to qualify as a REMIC at any time that any Certificates are outstanding or
subject REMIC I, REMIC II or REMIC III to any tax under the REMIC Provisions or
other applicable provisions of federal, state and local law or ordinances.
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(c) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial
or other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
The Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the repurchase of
any Mortgage Loan by the Depositor pursuant to this Agreement or the
eligibility of any Mortgage Loan for purposes of this Agreement.
SECTION 8.3. Trustee Not Liable for Certificates or
Mortgage Loans.
The recitals contained herein and in the Certificates shall
not be taken as the statements of the Trustee, the Fiscal Agent, the Master
Servicer or the Special Servicers and the Trustee, the Fiscal Agent, the
Special Servicers and the Master Servicer assume no responsibility for their
correctness. The Trustee, the Fiscal Agent, the Master Servicer and the Special
Servicers make no representations or warranties as to the validity or
sufficiency of this Agreement (other than, assuming the validity and
enforceability thereof with respect to each other party thereto, as to the
validity and enforceability thereof with respect to the Trustee, the Fiscal
Agent, the Master Servicer and the Special Servicers, as the case may be), of
the Certificates, or any private placement memorandum or prospectus used to
offer the Certificates for sale or the validity, enforceability or sufficiency
of any Mortgage Loan or related document. The Trustee and the Fiscal Agent
shall at no time have any responsibility or liability for or with respect to
the legality, validity and enforceability of any Mortgage or any Mortgage Loan,
or the perfection and priority of any Mortgage or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Trust
Fund or its ability to generate the payments to be distributed to
Certificateholders under this Agreement. Without limiting the foregoing,
neither the Trustee nor the Fiscal Agent shall be liable or responsible for:
the existence, condition and ownership of any Mortgaged Property; the existence
of any hazard or other insurance thereon (other than, with respect to the
Trustee only, if the Trustee shall assume the duties of the Master Servicer
pursuant to Section 7.2) or the enforceability thereof; the existence of any
Mortgage Loan or the contents of the related Mortgage File on any computer or
other record thereof (other than, with respect to the Trustee only, if the
Trustee shall assume the duties of the Master Servicer or a Special Servicer
pursuant to Section 7.2); the validity of the assignment of any Mortgage Loan
to the Trust Fund or of any
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intervening assignment; the completeness of any Mortgage File; the performance
or enforcement of any Mortgage Loan (other than, with respect to the Trustee
only, if the Trustee shall assume the duties of the Master Servicer or a
Special Servicer pursuant to Section 7.2); the compliance by the Depositor, the
Master Servicer or a Special Servicer with any warranty accuracy of any such
warranty or representation prior to the Trustee's receipt of notice or other
discovery of any non-compliance therewith or any breach thereof; any investment
of monies by or at the direction of the Master Servicer or a Special Servicer
or any loss resulting therefrom, it being understood that the Trustee only
shall remain responsible for any Trust Fund property that it may hold in its
individual capacity; the acts or omissions of any of the Depositor, the Master
Servicer or the Special Servicers (other than, with respect to the Trustee only
and then only with respect to the Master Servicer or the Special Servicers, if
the Trustee shall assume the duties of the Master Servicer or the Special
Servicers pursuant to Section 7.2) or any subservicer or any Borrower; any
action of the Master Servicer or a Special Servicer (other than, with respect
to the Trustee only, if the Trustee shall assume the duties of the Master
Servicer or a Special Servicer pursuant to Section 7.2) or any subservicer
taken in the name of the Trustee, except with respect to the Trustee, to the
extent such action is taken at the express written direction of the Trustee
without consultation with or direction by the Master Servicer or the
Certificateholders; the failure of the Master Servicer or a Special Servicer or
any subservicer to act or perform any duties required of it on behalf of the
Trust Fund or the Trustee hereunder; or any action by or omission of the
Trustee taken at the instruction of the Master Servicer or a Special Servicer
(other than in each case, with respect to the Trustee only, if the Trustee
shall assume the duties of the Master Servicer or a Special Servicer pursuant
to Section 7.2) unless the taking of such action is not permitted by the
express terms of this Agreement; provided, however, that the foregoing shall
not relieve the Trustee or the Fiscal Agent of its obligation to perform its
duties as specifically set forth in this Agreement. Under no circumstances
shall the Fiscal Agent be liable under any of the circumstances described in
the preceding sentence. The Trustee and the Fiscal Agent shall not be
accountable for the use or application by the Depositor, the Master Servicer or
a Special Servicer of any of the Certificates or of the proceeds of such
Certificates, or for the use or application of any funds paid to the Depositor,
the Master Servicer or a Special Servicer in respect of the Mortgage Loans or
deposited in or withdrawn from the Collection Account, or the Distribution
Accounts by the Depositor, the Master Servicer or a Special Servicer. The
Trustee (unless the Trustee shall have become the successor Master Servicer and
the Master Servicer has such responsibility hereunder) or the Fiscal Agent
shall have no responsibility for (A) filing any financing or continuation
statement in any public office at any time or to otherwise perfect or maintain
the perfection of any security interest or lien granted to it hereunder or to
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record this Agreement, (B) seeing to any insurance, (C) seeing to the payment
or discharge of any tax, assessment, or other governmental charge or any lien
or encumbrance of any kind owing with respect to, assessed or levied against
any part of the Trust Fund, or (D) confirming or verifying the contents of any
reports or certificates of the Master Servicer delivered to the Trustee
pursuant to this Agreement believed by the Trustee to be genuine and to have
been signed or presented by the proper party or parties. In making any
calculation hereunder which includes as a component thereof the payment or
distribution of interest for a stated period at a stated rate "to the extent
permitted by applicable law," the Trustee shall assume that such payment is so
permitted unless a Responsible Officer of the Trustee has actual knowledge, or
receives an Opinion of Counsel (at the expense of the Person asserting the
impermissibility) to the effect, that such payment is not permitted by
applicable law.
SECTION 8.4. Trustee and Fiscal Agent May Own
Certificates.
The Trustee and the Fiscal Agent in their individual
capacities or any other capacity may become the owner or pledgee of
Certificates, and may deal with the Depositor, the Master Servicer and the
Special Servicers in banking transactions, with the same rights each would have
if it were not Trustee or Fiscal Agent.
SECTION 8.5. Payment of Trustee's Fees and Expenses;
Indemnification.
(a) The Trustee or any successor Trustee shall be entitled to
receive from amounts on deposit in the Collection Account on each Distribution
Date the Trustee Fee (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) for all services
rendered by the Trustee in the execution of the trusts hereby created and in
the exercise and performance of any of the powers and duties hereunder of the
Trustee. The Trustee Fee may be deposited by the Trustee in the REMIC I
Distribution Account and withdrawn therefrom at the Trustee's discretion. The
Trustee shall pay the routine fees and expenses of the Certificate Registrar,
the Paying Agent, the Custodian and the Authenticating Agent. The Trustee's
rights to the Trustee Fee may not be transferred in whole or in part except in
connection with the transfer of all of the Trustee's responsibilities and
obligations under this Agreement.
(b) The Master Servicer and the Special Servicers covenant
and agree to pay or reimburse the Trustee for the reasonable expenses,
disbursements and advances incurred or made by the Trustee in connection with
any transfer of the servicing responsibilities of the Master Servicer or the
Special Servicer, as applicable
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hereunder, pursuant to or otherwise arising from the resignation or removal of
the Master Servicer or a Special Servicer, as applicable, in accordance with
any of the provisions of this Agreement (and including the reasonable fees and
expenses and disbursements of its counsel and all other persons not regularly
in its employ), except any such expense, disbursement or advance as may arise
from the negligence or bad faith of the Trustee.
(c) Each of the Depositor, the Paying Agent, the Certificate
Registrar, the Custodian and the Master Servicer (the Indemnitors") shall
indemnify the Trustee and the Fiscal Agent and their respective Affiliates and
each of the directors, officers, employees and agents of the Trustee, the
Fiscal Agent and their respective Affiliates and Persons who control the
Trustee and the Fiscal Agent within the meaning of 1934 Act (each, an
"Indemnified Party"), and hold each of them harmless against any, and all
claims, losses, damages, penalties, fines, forfeitures, reasonable legal fees
and related costs, judgments, and any other costs, fees and expenses (such
costs, fees and expenses, the "Expenses") that the Indemnified Party may
sustain in connection with this Agreement related to each such party's
respective willful misconduct, bad faith, fraud, misrepresentation and/or
negligence in the performance of its respective duties hereunder or by reason
of negligent disregard of its respective obligations and duties hereunder
(including in the case of the Master Servicer or any agent of the Master
Servicer). The Indemnitors shall reimburse each Indemnified Party promptly upon
such Indemnified Party's incurrence of an Expense.
(d) The Trust Fund shall indemnify each Indemnified Party
from, and hold it harmless against, any and all losses, liabilities, damages,
claims or expenses (including reasonable attorneys' fees) (such losses,
liabilities, damages, claims or expenses, the "Costs") arising in respect of
this Agreement or the Certificates, in each case to the extent, and only to the
extent, such payments are expressly reimbursable under this Agreement or are
"unanticipated expenses incurred by the REMIC" within the meaning of Treasury
Regulations Section 1.860G-1(b)(3)(ii), other than (i) those resulting from the
negligence, misrepresentation, fraud, bad faith or willful misconduct of the
Trustee or the Fiscal Agent and (ii) those as to which such Indemnified Party
is entitled to indemnification pursuant to Section 8.5(c). The term
"unanticipated expenses incurred by a REMIC" shall include any fees, expenses
and disbursements of any separate trustee or co-trustee appointed hereunder,
only to the extent such fees, expenses and disbursements were not reasonably
anticipated as of the Closing Date and the losses, liabilities, damages, claims
or expenses (including reasonable attorneys' fees) incurred or advanced by an
Indemnified Party in connection with any litigation arising out of this
Agreement, including, without limitation, under
Section 2.3, Section 3.2(a) (in connection with the grant of a power of
attorney by the Trustee to the persons
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specified in such Section), Section 3.11, the third paragraph of Section 3.13,
Section 8.11, Section 4.7, Section 5.1, and Section 7.1. The right of
reimbursement of the Indemnified Parties under this Section 8.5(d) shall be
senior to the rights of all Certificateholders. The Trust Fund shall reimburse
each Indemnified Party promptly upon such Indemnified Party's incurrence of a
Cost.
(e) Notwithstanding anything herein to the contrary, this
Section 8.5 shall survive the termination or maturity of this Agreement or the
resignation or removal of the Trustee and the Fiscal Agent as regards rights
accrued prior to such resignation or removal and (with respect to any acts or
omissions during their respective tenures) the resignation, removal or
termination of the Master Servicer, any Special Servicer, the Paying Agent, the
Certificate Registrar or the Custodian.
(f) This Section 8.5 shall be expressly construed to include,
but not be limited to, such indemnities, compensation, expenses, disbursements,
advances, losses, liabilities, damages and the like, as may pertain or relate
to any environmental law or environmental matter.
SECTION 8.6. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of any state or the
United States of America, authorized under such laws to exercise corporate
trust powers and to accept the trust conferred under this Agreement, having a
combined capital and surplus of at least $50,000,000 and a rating on its
unsecured senior long-term debt of at least "AA" from S&P and at least "Aa2"
from ▇▇▇▇▇'▇ (unless a Fiscal Agent is appointed and acting hereunder that has
a long-term senior unsecured debt rating that is at least "AA" from S&P and
"Aa2" from ▇▇▇▇▇'▇ (without regard to any plus or minus)), unless each of the
Rating Agencies has confirmed in writing that a lower rating shall not result,
in and of itself, in a downgrading, withdrawal or qualification of the rating
then assigned by such Rating Agency to any Class of the Certificates and
subject to supervision or examination by federal or state authority and shall
not be an Affiliate of the Depositor, the Mortgage Loan Seller, the Master
Servicer or any Special Servicer (except during any period when the Trustee has
assumed the duties of the Master Servicer or a Special Servicer, as applicable,
pursuant to Section 7.2). If a corporation or association publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for purposes of this Section
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. In the event that the place of business from which the
Trustee administers
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the Trust Fund is a state or local jurisdiction that imposes a tax on the Trust
Fund or the net income of a REMIC (other than a tax corresponding to a tax
imposed under the REMIC Provisions) the Trustee shall elect, at its sole
discretion, either to (i) resign immediately in the manner and with the effect
specified in Section 8.7, (ii) pay such tax and continue as Trustee or (iii)
administer the Trust Fund from a state and local jurisdiction that does not
impose such a tax. In case at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.7.
SECTION 8.7. Resignation and Removal of the Trustee.
The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Depositor, the
Master Servicer, each Special Servicer and each Rating Agency. Upon such notice
of resignation, the Fiscal Agent shall also be deemed to have been removed and,
accordingly, the Master Servicer shall promptly appoint a successor Trustee,
which appointment of successor Trustee shall not result, in and of itself, in a
downgrading, withdrawal or qualification of the rating then assigned by the
Rating Agencies to any Class of the Certificates as confirmed in writing by
each of the Rating Agencies, and a successor Fiscal Agent, which, if the
successor Trustee is not rated by each Rating Agency in one of its two highest
long-term unsecured debt rating categories, shall be confirmed in writing by
each of the Rating Agencies that such appointment of successor Fiscal Agent
shall not result, in and of itself, in a downgrading, withdrawal or
qualification of the rating then assigned by such Rating Agency to any Class of
the Certificates by written instrument, in triplicate, which instrument shall
be delivered to the resigning Trustee, with a copy to the fiscal agent deemed
removed, and the successor Trustee and successor Fiscal Agent. Notwithstanding
the foregoing, if no successor Trustee and Fiscal Agent shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee and departing Fiscal Agent may
petition any court of competent jurisdiction for the appointment of a successor
Trustee and successor Fiscal Agent.
If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.6 and shall fail to resign after
written request therefor by the Depositor or Master Servicer, or if at any time
the Trustee or the Fiscal Agent shall become incapable of acting, or shall be
adjudged bankrupt or insolvent, or a receiver of the Trustee or the Fiscal
Agent or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or the Fiscal Agent or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then
the Depositor or the Master Servicer may remove the Trustee and the Fiscal
Agent and
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shall promptly appoint a successor Trustee and successor Fiscal Agent by
written instrument, which shall be delivered to the Trustee and the Fiscal
Agent so removed and to the successor Trustee and successor Fiscal Agent.
The Holders of Certificates entitled to a majority of the
Voting Rights may at any time remove the Trustee and the Fiscal Agent (and any
removal of the Trustee shall be deemed to be a removal also of the Fiscal
Agent) and appoint a successor Trustee and successor Fiscal Agent (each meeting
the requirements of Section 8.8) by written instrument or instruments, in eight
originals, signed by such Holders or their attorneys-in-fact duly authorized,
one complete set of which instruments shall be delivered to the Depositor, one
complete set to the Master Servicer, one complete set to each Special Servicer,
one complete set to the Trustee so removed, one complete set to the Fiscal
Agent deemed removed, one complete set to the successor Trustee so appointed
and one complete set to the successor Fiscal Agent so appointed. No such
removal shall be effective until the Trustee and Fiscal Agent receive payment
or reimbursement of (i) all fees, costs and expenses owed to them prior to the
effectiveness of such removal, the costs and expenses incurred by them in
connection with such removal and transfer of documents contemplated in Section
8.8, and (ii) unreimbursed Advances and interest thereon at the Reimbursement
Rate to the date of reimbursement.
In the event of the resignation or removal of the Trustee,
the Fiscal Agent shall be entitled to resign, it being understood that the
initial Fiscal Agent shall not be obligated to act in such capacity hereunder
at any time that LaSalle National Bank is not the Trustee.
Any resignation or removal of the Trustee and Fiscal Agent
and appointment of a successor Trustee and, if such trustee is not rated by
each Rating Agency in one of its two highest long-term unsecured debt rating
categories, a successor Fiscal Agent pursuant to any of the provisions of this
Section 8.7 shall not become effective until acceptance of appointment by the
successor Trustee and, if necessary, Fiscal Agent as provided in Section 8.8.
SECTION 8.8. Successor Trustee.
Any successor Trustee and any successor Fiscal Agent
appointed as provided in Section 8.7 shall execute, acknowledge and deliver to
the Depositor and to the predecessor Trustee and predecessor Fiscal Agent, as
the case may be, instruments accepting their appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee and predecessor
Fiscal Agent shall become effective and such
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successor Trustee and successor Fiscal Agent, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as Trustee herein, provided that each Rating Agency shall have confirmed
in writing that the appointment of such successor Trustee and successor Fiscal
Agent shall not result, in and of itself, in a downgrading, withdrawal or
qualification of the rating then assigned by such Rating Agency to any Class of
the Certificates. The predecessor Trustee shall deliver to the successor
Trustee all Mortgage Files and related documents and statements held by it
hereunder, and the Depositor, the predecessor Trustee and predecessor Fiscal
Agent shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor Trustee and successor Fiscal Agent all such rights, powers,
duties and obligations. No successor Trustee or successor Fiscal Agent shall
accept appointment as provided in this Section 8.8 unless at the time of such
acceptance such successor Trustee or successor Fiscal Agent shall be eligible
under the provisions of Section 8.6.
Upon acceptance of appointment by a successor Trustee or
successor Fiscal Agent as provided in this Section 8.8, the successor Trustee
shall mail notice of the succession of such Trustee and Fiscal Agent hereunder
to all Holders of Certificates at their addresses as shown in the Certificate
Register.
SECTION 8.9. Merger or Consolidation of Trustee.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided that such corporation shall be eligible under the
provisions of Section 8.6, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. Any Person into which the Fiscal Agent may be merged
or converted or with which it may be consolidated or any corporation or bank
resulting from any merger, conversion or consolidation to which the Fiscal
Agent shall be a party, or any corporation or banking association succeeding to
all or substantially all of the corporate trust business of the Fiscal Agent
shall be the successor of the Fiscal Agent hereunder, provided that such
corporation or bank shall be eligible under the provisions of Section 8.6
without the execution or filing of any paper or any farther act on the part of
any of the parties hereto, anything to the contrary notwithstanding.
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SECTION 8.10. Appointment of Co-Trustee or Separate
Trustee.
Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing the same may at the time be
located, the Depositor and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act (at the expense of the Trustee) as co-trustee or
co-trustees, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust Fund, and to vest in such Person or
Persons, in such capacity, such title to the Trust Fund, or any part thereof,
and, subject to the other provisions of this Section 8.10, such powers, duties,
obligations, rights and trusts as the Depositor and the Trustee may consider
necessary or desirable. If the Depositor shall no longer be in existence or
shall not have joined in such appointment within 15 days after the receipt by
it of a request so to do, or in case an Event of Default shall have occurred
and be continuing, the Trustee alone shall have the power to make such
appointment. Except as required by applicable law, the appointment of a
co-trustee or separate trustee shall not relieve the Trustee of its
responsibilities hereunder. No co-trustee or separate trustee hereunder shall
be required to meet the terms of eligibility as a successor Trustee under
Section 8.6 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.8.
In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10, all rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee joining in
such act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Trust Fund or any portion thereof in any such jurisdiction) shall be exercised
and performed by such separate trustee or co-trustee solely at the direction of
the Trustee.
No trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement. The
Depositor and the Trustee acting jointly may at any time accept the resignation
of or remove any separate trustee or co-trustee, except that if the Depositor
is no longer in existence, or if the
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separate trustee or co-trustee is an employee of the Trustee, the Trustee
acting alone may accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Every such instrument shall be filed with
the Trustee. Each separate trustee and co-trustee, upon its acceptance of the
trusts conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the
Trustee. In no event shall any such separate trustee or co-trustee be entitled
to any provision relating to the conduct of, affecting the liability of, or
affording protection to such separate trustee or co-trustee that imposes a
standard of conduct less stringent than that imposed on the Trustee hereunder,
affording greater protection than that afforded to the Trustee hereunder or
providing a greater limit on liability than that provided to the Trustee
hereunder.
Any separate trustee or co-trustee may, at any time,
constitute the Trustee its agent or attorney-in-fact, with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts hereunder
shall vest in and be exercised by the Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
SECTION 8.11. Authenticating Agent.
The Trustee may appoint an Authenticating Agent to execute
and to authenticate Certificates. The Authenticating Agent must be acceptable
to the Depositor and the Master Servicer and must be a corporation organized
and doing business under the laws of the United States of America or any state,
having a principal office and place of business in a state and city acceptable
to the Depositor and the Master Servicer, having a combined capital and surplus
of at least $15,000,000, authorized under such laws to do a trust business and
subject to supervision or examination by federal or state authorities. The
Trustee shall serve as the initial Authenticating Agent and the Trustee hereby
accepts such appointment.
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Any corporation into which the Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Authenticating Agent shall be party, or any corporation succeeding to the
corporate agency business of the Authenticating Agent, shall be the
Authenticating Agent without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
The Authenticating Agent may at any time resign by giving at
least 30 days' advance written notice of resignation to the Trustee, the
Depositor, each Special Servicer and the Master Servicer. The Trustee may at
any time terminate the agency of the Authenticating Agent by giving written
notice of termination to the Authenticating Agent, the Depositor, each Special
Servicer and the Master Servicer. Upon receiving a notice of resignation or
upon such a termination, or in case at any time the Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section 8.11,
the Trustee promptly shall appoint a successor Authenticating Agent, which
shall be acceptable to the Master Servicer and the Depositor, and shall mail
notice of such appointment to all Certificateholders. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section 8.11.
The Authenticating Agent shall have no responsibility or
liability for any action taken by it as such at the direction of the Trustee.
The Trustee shall pay the Authenticating Agent reasonable compensation from its
own funds.
SECTION 8.12. Appointment of Custodians.
The Trustee may appoint one or more Custodians to hold all or
a portion of the Mortgage Files as agent for the Trustee, by entering into a
Custodial Agreement. The Trustee agrees to comply with the terms of each
Custodial Agreement and to enforce the terms and provisions thereof against the
Custodian for the benefit of the Certificateholders. Each Custodian shall be a
depository institution subject to supervision by federal or state authority,
shall have a combined capital and surplus of at least $10,000,000, shall have a
long-term senior unsecured debt rating of at least "BBB" from S&P and at least
"Baa2" from ▇▇▇▇▇'▇ Agency, unless each of the Rating Agencies has confirmed in
writing that a lower rating shall not result, in and of itself, in a
downgrading, withdrawal or qualification of the rating then assigned by such
Rating Agency to any Class of the Certificates, and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File. Each
Custodial Agreement may be
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amended only as provided in Section 10.7. The Trustee shall pay the Custodian
reasonable compensation from its own funds. The Trustee shall serve as the
initial Custodian.
SECTION 8.13. Fiscal Agent Appointed; Concerning the
Fiscal Agent.
(a) The Trustee hereby appoints ABN AMRO Bank N.V. as the
initial Fiscal Agent hereunder for the purposes of exercising and performing
the obligations and duties imposed upon the Fiscal Agent by Sections 3.24 and
4.6.
(b) The Fiscal Agent undertakes to perform such duties and
only such duties as are specifically set forth in Sections 3.24 and 4.6.
(c) No provision of this Agreement shall be construed to
relieve the Fiscal Agent from liability for its own negligent failure to act,
bad faith or its own willful misfeasance; provided, however, that (i) the
duties and obligations of the Fiscal Agent shall be determined solely by the
express provisions of Sections 3.24 and 4.6, the Fiscal Agent shall not be
liable except for the performance of such duties and obligations, no implied
covenants or obligations shall be read into this Agreement against the Fiscal
Agent and, in the absence of bad faith on the part of the Fiscal Agent, the
Fiscal Agent may conclusively rely, as to the truth and correctness of the
statements or conclusions expressed therein, upon any resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Fiscal Agent by any Person and which on their face
do not contradict the requirements of this Agreement, and (ii) the provisions
of clauses (ii), (iv) and the last paragraph of Section 8.1(c) shall apply to
the Fiscal Agent.
(d) Except as otherwise provided in Section 8.1(c), the
Fiscal Agent also shall have the benefit of provisions of clauses (i), (ii),
(iii) (other than the proviso thereto), (iv), (v) (other than the proviso
thereto) and (vi) of Section 8.2(a).
ARTICLE IX
TERMINATION
SECTION 9.1. Termination.
(a) The respective obligations and responsibilities of the
Master Servicer, the Special Servicers, the Depositor, the Trustee and the
Fiscal Agent created hereby with respect to the Certificates (other than the
obligation to make certain
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payments and to send certain notices to Certificateholders as hereinafter set
forth) shall terminate immediately following the occurrence of the last action
required to be taken by the Trustee pursuant to this Article IX on the
Termination Date; provided, however, that in no event shall the trust created
hereby continue beyond the expiration of twenty-one years from the death of the
survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the
United States to the United Kingdom, living on the date hereof.
(b) The Trust Fund, REMIC I, REMIC II and REMIC III shall be
terminated and the assets of the Trust Fund shall be sold or otherwise disposed
of in connection therewith, only pursuant to a "plan of complete liquidation"
within the meaning of Code Section 860F(a)(4)(A) providing for the actions
contemplated by the provisions hereof pursuant to which the applicable Notice
of Termination is given and requiring that the Trust Fund, REMIC I, REMIC II
and REMIC III shall terminate on a Distribution Date occurring not more than 90
days following the date of adoption of the plan of complete liquidation. For
purposes of this Section 9.1(b), the Notice of Termination given pursuant to
Sections 9.1(c) shall constitute the adoption of the plan of complete
liquidation as of the date such notice is given, which date shall be specified
by the Trustee in the final federal income tax returns of REMIC I, REMIC II and
REMIC III pursuant to Treasury Regulations Section 1.860F-1.
(c) Subject to Section 9.2, the Master Servicer, the Group 2
Special Servicer or the Depositor may effect an early termination of the Trust
Fund, upon not less than 30 days' prior Notice of Termination given to the
Trustee and the Master Servicer any time on or after the Early Termination
Notice Date specifying the Anticipated Termination Date, by purchasing on the
related Remittance Date all, but not less than all, of the Mortgage Loans then
included in the Trust Fund, and all property acquired in respect of any
Mortgage Loan, at a purchase price, payable in cash, equal to not less than the
greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of
each Mortgage Loan (other than REO Mortgage
Loans) included in the Trust Fund as of the
last day of the month preceding such
Distribution Date (less any Advances
previously made on account of principal);
(B) the fair market value of all other property
included in the Trust Fund as of the last
day of the month preceding
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such Distribution Date, as determined by an
Updated Appraisal performed by an
Independent appraiser acceptable to the
Master Servicer as of the date not more
than 30 days prior to the last day of the
month preceding such Distribution Date;
(C) all unpaid interest accrued on such
principal balance of each such Mortgage
Loan (including for this purpose any
Mortgage Loan as to which title to the
related Mortgaged Property has been
acquired) at the Mortgage Rate to the last
day of the month preceding such
Distribution Date (less any Advances
previously made on account of interest);
(D) the aggregate amount of unreimbursed
Advances (with interest thereon at the
Reimbursement Rate), unpaid Servicing
Compensation. unpaid Trustee Fees and
unpaid Trust Fund expenses; or
(ii) the aggregate fair market value of the Mortgage
Loans, and all other property acquired in respect of
any Mortgage Loan in the Trust Fund, on the last day
of the month preceding such Distribution Date, as
determined by an Independent financial advisory or
investment banking or investment brokerage firm
acceptable to the Master Servicer as of a date not
more than 30 days prior to the last day of the month
preceding such Distribution Date, together with one
month's interest thereon at the related Mortgage
Rates and disposition expenses.
All costs and expenses incurred by any party to this
Agreement or by the Trust Fund in connection with the purchase of the Mortgage
Loans and other assets of the Trust Fund pursuant to this Section 9.1(c) shall
be borne by the party exercising its purchase rights hereunder. The Trustee
shall be entitled to rely conclusively on any determination made by an
Independent appraiser pursuant to this subsection (c).
(d) If the Trust Fund has not been previously terminated
pursuant to subsection (c) of this Section 9.1, the Trustee shall determine as
soon as practicable the Distribution Date on which the Trustee reasonably
anticipates, based on information with respect to the Mortgage Loans previously
provided to it, that the final distribution will be made (i) to the Holders of
outstanding Regular Certificates, and to the Trustee
206
in respect of the REMIC I and REMIC II Interests notwithstanding that such
distribution may be insufficient to distribute in full the Certificate Balance
of each Certificate or REMIC I or REMIC II Interest, together with amounts
required to be distributed on such Distribution Date pursuant to Section 4.1,
4.2 or 4.3 as applicable, or (ii) if no such Classes of Certificates are then
outstanding, to the Holders of the Class R-III Certificates in accordance with
Section 4.3, in either case, following the later to occur of (A) the receipt or
collection of the last payment due on any Mortgage Loan included in the Trust
Fund or (B) the liquidation or disposition pursuant to Section 3.20 of the last
asset held by the Trust Fund.
(e) Notice of any termination of the Trust Fund pursuant to
this Section 9.1 shall be mailed by the Trustee to affected Certificateholders
with a copy to the Master Servicer and the Special Servicers and each Rating
Agency at their addresses shown in the Certificate Registrar as soon as
practicable after the Trustee shall have received, given or been deemed to have
received a Notice of Termination but in any event prior to the Anticipated
Termination Date. The notice mailed by the Trustee to affected
Certificateholders shall:
(i) specify the Anticipated Termination Date on which
the final distribution is anticipated to be made to
Holders of Certificates of the Classes specified
therein;
(ii) specify the amount of any such final distribution,
if known; and
(iii) state that the final distribution to
Certificateholders will be made only upon
presentation and surrender of Certificates at the
office of the Paying Agent therein specified.
If the Trust Fund is not terminated on any Anticipated Termination Date for any
reason, the Trustee shall promptly mail notice thereof to each affected
Certificateholder.
(f) Any funds not distributed on the Termination Date because
of the failure of any Certificateholders to tender their Certificates shall be
set aside and held in trust for the account of the appropriate non-tendering
Certificateholders, whereupon the Trust Fund shall terminate. If any
Certificates as to which notice of the Termination Date has been given pursuant
to this Section 9.1 shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining Certificateholders, at their last
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addresses shown in the Certificate Register, to surrender their Certificates
for cancellation in order to receive, from such funds held, the final
distribution with respect thereto. If within one year after the second notice
any Certificate shall not have been surrendered for cancellation, the Trustee
may, directly or through an agent, take appropriate steps to contact the
remaining Certificateholders concerning surrender of their Certificates. The
costs and expenses of maintaining such funds in trust and of contacting
Certificateholders shall be paid out of such funds. If within two years after
the second notice, any such Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Class R-III Certificateholders
all amounts distributable to the Holders thereof and none of the Paying Agent,
the Trustee or the Certificate Registrar shall have further responsibility
therefor. No interest shall accrue or be payable to any Certificateholder on
any amount held as a result of such Certificateholder's failure to surrender
its Certificate(s) for final payment thereof in accordance with this Section
9.1.
SECTION 9.2. Additional Termination Requirements.
In the event that the Group 2 Special Servicer, the Master
Servicer or the Depositor exercises its purchase option as provided in Section
9.1(c), the Trust Fund shall be terminated in accordance with the following
additional requirements: provided that the Trustee has received from the Group
2 Special Servicer, the Master Servicer or the Depositor, as appropriate, an
Opinion of Counsel or other evidence to the effect that the termination of the
Trust Fund (i) will constitute a "qualified liquidation" of each of REMIC I,
REMIC II and REMIC III within the meaning of Code Section 860F(a)(4)(A-3) and
(ii) will not subject REMIC I, REMIC II or REMIC III to tax or cause any of
REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any time that
any Certificates are outstanding.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Counterparts.
This Agreement may be executed simultaneously in any number
of counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall constitute but one and the same instrument.
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SECTION 10.2. Limitation on Rights of
Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right to institute any
suit, action or proceeding in equity or at law upon or under or with respect to
this Agreement or the Mortgage Loans, unless, with respect to this Agreement,
such Holder previously shall have given to the Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates representing a majority of the aggregate
Voting Rights allocated to each affected Class of Certificates shall have made
written request upon the Trustee to institute such action, suit or proceeding
in its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 30 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder
with every other Certificateholder and the Trustee, that no one or more Holders
of Certificates of any Class shall have any right in any manner whatever by
virtue of any provision of this Agreement to affect, disturb or prejudice the
rights of the Holders of any other of such Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder, or to enforce
any right under this Agreement, except in the manner herein provided and for
the equal, ratable and common benefit of all Holders of Certificates of such
Class. For the protection and enforcement of the provisions of this Section,
each and every Certificateholder and the Trustee shall be entitled to such
relief as can be given either at law or in equity.
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SECTION 10.3. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES) AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.4. Notices.
All demands, notices and communications hereunder shall be in
writing, shall be deemed to have been given upon receipt (or, in the case of
notice by facsimile transmission, upon confirmation of receipt) as follows:
If to the Trustee or the Fiscal Agent, to:
LaSalle National Bank or ABN AMRO Bank N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Asset - Backed Securities
Trust Services,
CMAC 1997-ML1
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Depositor, to:
Commercial Mortgage Acceptance Corp.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
210
With copies to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Master Servicer, to:
Midland Loan Services, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
211
If to the Group 1 Special Servicer, to:
Midland Loan Services, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Group 2 Special Servicer, to:
CRIIMI MAE Limited Partnership:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Fax No.:
If to the NOM Special Servicer, to
CRIIMI MAE Limited Partnership
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Fax No.:
If to the Mortgage Loan Seller, to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Capital Inc.
World Financial Center, North Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
212
Fax No.:
If to any Certificateholder, to:
the address set forth in the
Certificate Register,
or, in the case of the parties to this Agreement, to such other address as such
party shall specify by written notice to the other parties hereto.
SECTION 10.5. Severability of Provisions.
If any one or more of the covenants, agreements, provisions
or terms of this Agreement shall be for any reason whatsoever held invalid,
then, to the extent permitted by applicable law, such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement or of
the Certificates or the rights of the Holders thereof.
SECTION 10.6. Notice to the Depositor and Each Rating
Agency.
(a) The Trustee shall use its best efforts to promptly
provide written notice to the Depositor and each Rating Agency with respect to
each of the following of which a Responsible Officer of the Trustee has actual
knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default that has not
been cured;
(iii) the merger, consolidation, resignation or
termination of the Master Servicer, Special
Servicer, Trustee or Fiscal Agent;
(iv) the repurchase of Mortgage Loans pursuant to Section
2.3(d);
(v) the final payment to any Class of
Certificateholders;
(vi) each report to Certificateholders described in
Section 4.4;
(b) The Master Servicer and each Special Servicer shall
promptly furnish to each Rating Agency copies of the following:
213
(i) each of its annual statements as to compliance
described in Section 3.16;
(ii) each of its annual independent public accountants'
servicing reports described in Section 3.17.
(iii) annual reports of each Borrower with respect to the
net operating income and occupancy rates required to
be delivered by the related Mortgage and actually
received by the Master Servicer or such Special
Servicer, if applicable, pursuant thereto to the
extent consistent with applicable law and the
related Mortgage Loan Documents.
(c) Each Special Servicer shall furnish each Rating Agency
with such information with respect to any Specially Serviced Mortgage Loan
specially serviced by it as such Rating Agency shall request and which such
Special Servicer can obtain to the extent consistent with applicable law and
the related Mortgage Loan Documents.
(d) Notices to each Rating Agency shall be addressed as
follows:
Standard & Poor's Ratings Service
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇'▇ Investor Services, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Mortgage Surveillance
or in each case to such other address as any Rating Agency shall specify by
written notice to the parties hereto.
SECTION 10.7. Amendment.
This Agreement or any Custodial Agreement may be amended from
time to time by the Depositor, the Master Servicer, the Group 1 Special
Servicer, the Group 2 Special Servicer, the NOM Special Servicer, the Trustee
and the Fiscal Agent,
214
without the consent of any of the Certificateholders, (i) to cure any
ambiguity, (ii) to correct or supplement any provisions herein or therein that
may be inconsistent with any other provisions herein or therein, (iii) to amend
any provision hereof to the extent necessary or desirable to maintain the
rating or ratings assigned to each of the Classes of Regular Certificates by
each Rating Agency, or (iv) to make any other provisions with respect to
matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement and will not result in the
downgrading, withdrawal or qualification of the rating or ratings then assigned
to any outstanding Class of Certificates, as confirmed by each Rating Agency in
writing and, in all cases, which, as evidenced by an Opinion of Counsel at the
expense of the party (other than the Trustee, unless such amendment modifies
the obligations, duties or rights of the Trustee in a manner favorable to the
Trustee) requesting such amendment, shall not adversely affect in any material
respect the interests of any Certificateholder.
This Agreement or any Custodial Agreement may also be amended
from time to time by the Depositor, the Master Servicer, the Group 1 Special
Servicer, the Group 2 Special Servicer, the NOM Special Servicer, the Trustee
and the Fiscal Agent with the consent of the Holders of each of the Classes of
Regular Certificates representing not less than 662/3% of the aggregate Voting
Rights allocated to all Classes of Certificates affected by the amendment for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Certificateholders; provided, however, that no such
amendment shall:
(i) reduce in any manner the amount of, or delay the
timing of, payments received on Mortgage Loans
which are required to be distributed on any
Certificate without the consent of each affected
Certificateholder;
(ii) change the percentages of Voting Rights of Holders
of Certificates which are required to consent to
any action or inaction under this Agreement,
without the consent of the Holders of all
Certificates then outstanding; or
(iii) alter the obligations of the Master Servicer, the
Trustee or the Fiscal Agent to make a P&I Advance
or Property Advance without the consent of the
Holders of all Certificates representing all of
the Voting Rights of the Class or Classes
affected thereby.
215
Further, the Depositor, the Master Servicer, the Group 1
Special Servicer, the Group 2 Special Servicer, the NOM Special Servicer the
Trustee and the Fiscal Agent, at any time and from time to time, without the
consent of the Certificateholders, may amend this Agreement or any Custodial
Agreement to modify, eliminate or add to any of its provisions to such extent
as shall be necessary to maintain the qualification of REMIC I, REMIC II and
REMIC III as three separate REMICs, or to prevent the imposition of any
additional material state or local taxes, at all times that any Certificates
are outstanding; provided, however, that such action, as evidenced by an
Opinion of Counsel (obtained at the expense of the Trust Fund), is necessary or
helpful to maintain such qualification or to prevent the imposition of any such
taxes, and would not adversely affect in any material respect the interest of
any Certificateholder.
In the event that neither the Depositor nor the successor
thereto, if any, is in existence, any amendment under this Section 10.7 shall
be effective with the consent in writing of the Trustee, the Fiscal Agent, the
Master Servicer, the Group 1 Special Servicer, the Group 2 Special Servicer,
the NOM Special Servicer, and, to the extent required by this Section, the
Certificateholders and each Rating Agency.
Promptly after the execution of any amendment, the Trustee
shall furnish written notification of the substance of such amendment to each
Certificateholder and each Rating Agency (with a copy of such amendment to each
Rating Agency).
It shall not be necessary for the consent of
Certificateholders under this Section 10.7 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall
approve the substance thereof. The method of obtaining such consents and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable regulations as the Trustee may prescribe;
provided, however, that such method shall always be by affirmation and in
writing.
Notwithstanding any contrary provision of this Agreement, no
amendment shall be made to this Agreement or any Custodial Agreement unless the
Master Servicer and the Trustee shall have received an Opinion of Counsel, at
the expense of the party requesting such amendment (or, if such amendment is
required by any Rating Agency to maintain the rating issued by it or requested
by the Trustee for any purpose described in the first sentence of this Section,
then at the expense of the Trust Fund), to the effect that such amendment will
not cause REMIC I, REMIC II or REMIC III to fail to qualify as a REMIC at any
time that any Certificates are
216
outstanding or cause a tax to be imposed on the Trust Fund under the REMIC
Provisions (other than a tax at the highest marginal corporate tax rate on net
income from foreclosure property).
Prior to the execution of any amendment to this Agreement or
any Custodial Agreement, the Trustee, the Fiscal Agent, the Special Servicers
and the Master Servicer shall be entitled to receive and rely conclusively upon
an Opinion of Counsel, at the expense of the party requesting such amendment
(or, if such amendment is required by any Rating Agency to maintain the rating
issued by it or requested by the Trustee for any purpose described in clause
(i), (ii) or (iv) (which do not modify the obligations, duties or rights of the
Trustee in a manner favorable to the Trustee) of the first sentence of this
Section, then at the expense of the Trust Fund) stating that the execution of
such amendment is authorized or permitted by this Agreement. The Trustee may,
but shall not be obligated to, enter into any such amendment which affects the
Trustee's own rights, duties or immunities under this Agreement.
SECTION 10.8. Confirmation of Intent.
It is the express intent of the parties hereto that the
conveyance of the Trust Fund (including the Mortgage Loans) by the Depositor to
the Trustee on behalf of Certificateholders as contemplated by this Agreement
and the sale by the Depositor of the Certificates be, and be treated for all
purposes as, a sale by the Depositor of the undivided portion of the beneficial
interest in the Trust Fund represented by the Certificates. It is, further, not
the intention of the parties that such conveyance be deemed a pledge of the
Trust Fund by the Depositor to the Trustee to secure a debt or other obligation
of the Depositor. However, in the event that, notwithstanding the intent of the
parties, the Trust Fund is held to continue to be property of the Depositor
then (a) this Agreement shall also be deemed to be a security agreement under
applicable law; (b) the transfer of the Trust Fund provided for herein shall
be deemed to be a grant by the Depositor to the Trustee on behalf of
Certificateholders of a first priority security interest in all of the
Depositor's right, title and interest in and to the Trust Fund and all amounts
payable to the holders of the Mortgage Loans in accordance with the terms
thereof and all proceeds of the conversion, voluntary or involuntary, of the
foregoing into cash, instruments, securities or other property, including,
without limitation, all amounts from time to time held or invested in the
Collection Account and the Distribution Account, whether in the form of cash,
instruments, securities or other property; (c) the possession by the Trustee
(or the Custodian or any other agent on its behalf) of Notes and such other
items of property as constitute instruments, money, negotiable documents or
chattel paper shall be
217
deemed to be "possession by the secured party" for purposes of perfecting the
security interest pursuant to Section 9-305 of the Missouri and Illinois
Uniform Commercial Codes; and (d) notifications to Persons holding such
property, and acknowledgments, receipts or confirmations from Persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts
or confirmations from, financial intermediaries, bailees or agents (as
applicable) of the Trustee for the purpose of perfecting such security interest
under applicable law. Any assignment of the interest of the Trustee pursuant to
any provision hereof shall also be deemed to be an assignment of any security
interest created hereby. The Depositor shall, and upon the request of the
Master Servicer, the Trustee shall, to the extent consistent with this
Agreement (and at the expense of the Trust Fund), take such actions as may be
necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement. It is the intent of
the parties that such a security interest would be effective whether any of the
Certificates are sold, pledged or assigned.
218
IN WITNESS WHEREOF, the Depositor, the Master Servicer, the
Special Servicer, the Trustee and the Fiscal Agent have caused their names to
be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
COMMERCIAL MORTGAGE
ACCEPTANCE CORP., as
Depositor
By:
----------------------
Name:
Title:
MIDLAND LOAN SERVICES,
L.P.,
as Master Servicer and Group
1 Special Servicer
By: MIDLAND DATA
SYSTEMS, INC.,
its General Partner
By:
----------------------
Name:
Title:
CRIIMI MAE SERVICES
LIMITED PARTNERSHIP,
as Group 2 Special Servicer
and as NOM Special Servicer
By: CRIIMI MAE
MANAGEMENT, INC.,
its General Partner
By:
---------------------
Name:
Title:
219
LASALLE NATIONAL
BANK, as Trustee,
Custodian, Certificate
Registrar and Paying
Agent
By:
--------------------
Name:
Title:
220
ABN AMRO BANK N.V., as
Fiscal Agent of the Trustee
By:
--------------------
Name:
Title:
By:
--------------------
Name:
Title:
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF ▇▇▇▇▇▇▇ )
On this ____ day of ___________________ before me appeared
______________________________ to me personally known, who being by me duly
sworn did say that he is an __________________ President of COMMERCIAL MORTGAGE
ACCEPTANCE CORP., a Missouri corporation and that he signed his name thereto
under authority of the board of directors of said corporation and on behalf of
such corporation.
WITNESS my hand and seal hereto affixed the day and year
first above written.
---------------------------------
NOTARY PUBLIC in and for said
County and State
My Commission expires:
(stamp)
(seal)
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF ▇▇▇▇▇▇▇ )
On this ____ day of _________________, before me appeared
______________________________, to me personally known, who being by me duly
sworn did say that he is the _______________ of Midland Data Systems, Inc., a
____________ corporation, the general partner of Midland Loan Services, L.P., a
Missouri limited partnership, and that the seal affixed to the foregoing
instrument is the corporate seal of said corporation, and that said instrument
was signed and sealed on behalf of said corporation by authority of its board
of directors as the general partner of said limited partnership, and said
person acknowledged said instrument to be the free act and deed of said
corporation as the general partner of said limited partnership and the free act
and deed of said limited partnership.
WITNESS my hand and seal hereto affixed the day and year
first above written.
----------------------------------
NOTARY PUBLIC in and for said
County and State
My Commission expires:
(stamp)
(seal)
223
STATE OF __________ )
) ss.:
COUNTY OF _________ )
On this ____ day of _________________, before me appeared
______________________________, to me personally known, who being by me duly
sworn did say that he is the _______________ CRIIMI MAE Management, Inc., a
____________ corporation, the general partner of CRIIMI MAE Services Limited
Partnership, a Maryland limited partnership, and that the seal affixed to the
foregoing instrument is the corporate seal of said corporation, and that said
instrument was signed and sealed on behalf of said corporation by authority of
its board of directors as the general partner of said limited partnership, and
said person acknowledged said instrument to be the free act and deed of said
corporation as the general partner of said limited partnership and the free act
and deed of said limited partnership.
WITNESS my hand and seal hereto affixed the day and year
first above written.
---------------------------------
NOTARY PUBLIC in and for said
County and State
My Commission expires:
(stamp)
(seal)
224
STATE OF __________________ )
) ss.:
COUNTY OF _______________ )
On this ___ day of , before me appeared ____________________,
to me personally known, who being by me duly sworn did say that he is a [Title]
of LASALLE NATIONAL BANK, a national banking association, and that the seal
affixed to the foregoing instrument is the corporate seal of said corporation,
and that said instrument was signed and sealed on behalf of said corporation by
authority of its board of directors, and said __________________ acknowledged
said instrument to be the free act and deed of said corporation and the free
act and deed of said corporation.
WITNESS my hand and seal hereto affixed the day and year
first above written.
--------------------------------
NOTARY PUBLIC in and for said
County and State
My Commission expires:
(stamp)
(seal)
225
STATE OF __________________ )
) ss.:
COUNTY OF _______________ )
On this ___ day of , before me appeared ____________________,
to me personally known, who being by me duly sworn did say that he is a [Title]
of , a corporation, and that the seal affixed to the foregoing instrument is
the corporate seal of said corporation, and that said instrument was signed and
sealed on behalf of said corporation by authority of its board of directors,
and said __________________ acknowledged said instrument to be the free act and
deed of said corporation and the free act and deed of said corporation.
WITNESS my hand and seal hereto affixed the day and year
first above written.
---------------------------------
NOTARY PUBLIC in and for said
County and State
My Commission expires:
(stamp)
(seal)
226
STATE OF __________________ )
) ss.:
COUNTY OF ________________ )
On this ___th day of , before me, the undersigned, a Notary
Public in and for the State of , duly commissioned and sworn, personally
appeared , to me known who, by me duly sworn, did depose and acknowledge before
me and say that he resides at ; that he is the of
, a , the corporation
described in and thatexecuted the foregoing instrument; and that he signed his
name thereto under authority of the board of directors of said corporation and
on behalf of such corporation.
WITNESS my hand and seal hereto affixed the day and year
first above written.
-------------------------------------
NOTARY PUBLIC in and for the
State of .
My Commission expires:
(stamp)
(seal)
This instrument prepared by:
----------------------------------
Name:
-----------------------
Address:
227