ASSET SECURITIZATION CORPORATION,
DEPOSITOR
AMRESCO MANAGEMENT, INC.,
SERVICER AND INITIAL SPECIAL SERVICER
LASALLE NATIONAL BANK,
TRUSTEE
and
ABN AMRO BANK N.V.,
FISCAL AGENT
--------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of March 27, 1997
------------------------------------------------------
Commercial Mortgage Pass-Through Certificates
Series 1997-D4
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms...................................................................................... 4
SECTION 1.02. Certain Calculations...............................................................................56
SECTION 1.03. Certain Constructions..............................................................................57
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans; Assignment of Mortgage Loan Purchase and Sale
Agreement.............................................................................58
SECTION 2.02. Acceptance by Custodian and the Trustee............................................................61
SECTION 2.03. Representations and Warranties of the Depositor....................................................63
SECTION 2.04. Representations, Warranties and Covenants of the Servicer, Special Servicer and
Trustee...............................................................................69
SECTION 2.05. Execution and Delivery of Certificates; Issuance of Lower-Tier Regular Interests...................72
SECTION 2.06. Miscellaneous REMIC and Grantor Trust Provisions...................................................72
ARTICLE III
ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
SECTION 3.01. Servicer to Act as Servicer; Administration of the Mortgage Loans..................................74
SECTION 3.02. Liability of the Servicer..........................................................................76
SECTION 3.03. Collection of Certain Mortgage Loan Payments.......................................................77
SECTION 3.04. Collection of Taxes, Assessments and Similar Items; Escrow Accounts................................77
SECTION 3.05. Collection Account; Distribution Account; Upper-Tier Distribution Account;
Default Interest Distribution Account; and Excess Interest
Distribution Account..................................................................79
SECTION 3.06. Permitted Withdrawals from the Collection Account..................................................81
SECTION 3.07. Investment of Funds in the Collection Account, the REO Account, the Lock-Box
Accounts, the Cash Collateral Accounts, the Interest Reserve Account
and the Reserve Accounts..............................................................84
SECTION 3.08. Maintenance of Insurance Policies and Errors and Omissions and Fidelity Coverage...................86
SECTION 3.09. Enforcement of Due-On-Sale Clauses; Assumption Agreements; Defeasance Provisions...................89
SECTION 3.10. Appraisals; Realization Upon Defaulted Mortgage Loans..............................................92
SECTION 3.11. Trustee to Cooperate; Release of Mortgage Files....................................................97
SECTION 3.12. Servicing Fees, Trustee Fees and Special Servicing Compensation....................................98
SECTION 3.13. Reports to the Trustee; Collection Account Statements.............................................100
SECTION 3.14. Annual Statement as to Compliance.................................................................104
SECTION 3.15. Annual Independent Public Accountants' Servicing Report...........................................104
SECTION 3.16. Access to Certain Documentation...................................................................105
SECTION 3.17. Title and Management of REO Properties and REO Account Properties.................................105
SECTION 3.18. Sale of Specially Serviced Mortgage Loans and REO Properties......................................110
SECTION 3.19. Additional Obligations of the Servicer and the Special Servicer; Inspections......................112
SECTION 3.20. Authenticating Agent..............................................................................113
SECTION 3.21. Appointment of Custodians.........................................................................114
SECTION 3.22. Reports to the Securities and Exchange Commission; Available Information..........................115
SECTION 3.23. Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts and Reserve Accounts.................118
SECTION 3.24. Property Advances.................................................................................118
SECTION 3.25. Appointment of Special Servicer...................................................................119
SECTION 3.26. Transfer of Servicing Between Servicer and Special Servicer; Record Keeping.......................120
SECTION 3.27. Interest Reserve Account..........................................................................121
SECTION 3.28. Limitations on and Authorizations of the Servicer and Special Servicer with
Respect to Certain Mortgage Loans....................................................122
SECTION 3.29. Intentionally left Blank..........................................................................125
SECTION 3.30. Modification, Waiver, Amendment and Consents......................................................125
SECTION 3.31. Notices to Unitholders............................................................................133
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions....................................................................................134
SECTION 4.02. Statements to Certificateholders; Reports by Trustee; Other Information Available
to the Holders and Others............................................................153
SECTION 4.03. Compliance with Withholding Requirements..........................................................158
SECTION 4.04. REMIC Compliance.................................................................................158
SECTION 4.05. Imposition of Tax on the Trust Fund...............................................................160
SECTION 4.06. Remittances; P&I Advances.........................................................................161
SECTION 4.07. Grantor Trust Reporting...........................................................................164
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates..................................................................................166
SECTION 5.02. Registration, Transfer and Exchange of Certificates...............................................171
SECTION 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.................................................177
SECTION 5.04. Appointment of Paying Agent.......................................................................178
SECTION 5.05. Access to Certificateholders' Names and Addresses.................................................178
SECTION 5.06. Actions of Certificateholders.....................................................................179
ARTICLE VI
THE DEPOSITOR, THE SERVICER AND THE SPECIAL SERVICER
SECTION 6.01. Liability of the Depositor, the Servicer and the Special Servicer.................................180
SECTION 6.02. Merger or Consolidation of the Servicer...........................................................180
SECTION 6.03. Limitation on Liability of the Depositor, the Servicer and Others.................................180
SECTION 6.04. Limitation on Resignation of the Servicer and the Special Servicer; Termination
of the Servicer and the Special Servicer.............................................181
SECTION 6.05. Rights of the Depositor and the Trustee in Respect of the Servicer and the
Special Servicer.....................................................................183
SECTION 6.06. Servicer or Special Servicer as Owner of a Certificate............................................184
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.................................................................................185
SECTION 7.02. Trustee to Act; Appointment of Successor..........................................................189
SECTION 7.03. Notification to Certificateholders................................................................190
SECTION 7.04. Other Remedies of Trustee.........................................................................190
SECTION 7.05. Waiver of Past Events of Default; Termination.....................................................191
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. Duties of Trustee.................................................................................192
SECTION 8.02. Certain Matters Affecting the Trustee.............................................................194
SECTION 8.03. Trustee and Fiscal Agent Not Liable for Certificates or Mortgage Loans............................196
SECTION 8.04. Trustee and Fiscal Agent May Own Certificates.....................................................198
SECTION 8.05. Payment of Trustee's Fees and Expenses; Indemnification...........................................198
SECTION 8.06. Eligibility Requirements for Trustee..............................................................200
SECTION 8.07. Resignation and Removal of the Trustee............................................................201
SECTION 8.08. Successor Trustee and Fiscal Agent................................................................202
SECTION 8.09. Merger or Consolidation of Trustee................................................................203
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.....................................................203
SECTION 8.11. Fiscal Agent Appointed; Concerning the Fiscal Agent...............................................204
ARTICLE IX
TERMINATION
SECTION 9.01. Termination......................................................................................206
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Counterparts.....................................................................................211
SECTION 10.02. Limitation on Rights of Certificateholders......................................................211
SECTION 10.03. Governing Law....................................................................................212
SECTION 10.04. Notices. 212
SECTION 10.05. Severability of Provisions.......................................................................214
SECTION 10.06. Notice to the Depositor and Each Rating Agency...................................................214
SECTION 10.07. Amendment. 216
SECTION 10.08. Confirmation of Intent...........................................................................218
SECTION 10.09. ▇▇▇▇▇▇ Act. 219
SECTION 10.10. No Intended Third-Party Beneficiaries............................................................220
TABLE OF EXHIBITS
Exhibit A-1 Form of Class A-1A Certificate
Exhibit A-2 Form of Class A-1B Certificate
Exhibit A-3 Form of Class A-1C Certificate
Exhibit A-4 Form of Class A-1D Certificate
Exhibit A-5 Form of Class A-1E Certificate
Exhibit A-6 Form of Class A-2 Certificate
Exhibit A-7 Form of Class A-3 Certificate
Exhibit A-8 Form of Class A-4 Certificate
Exhibit A-9 Form of Class A-5 Certificate
Exhibit A-10 Form of Class A-6 Certificate
Exhibit A-11 Form of Class A-7 Certificate
Exhibit A-12 Form of Class A-8 Certificate
Exhibit A-13 Form of Class A-CS1 Certificate
Exhibit A-14 Form of Class PS-1 Certificate
Exhibit A-15 Form of Class B-1 Certificate
Exhibit A-16 Form of Class B-2 Certificate
Exhibit A-17 Form of Class B-3 Certificate
Exhibit A-18 Form of Class B-4 Certificate
Exhibit A-19 Form of Class B-5 Certificate
Exhibit A-20 Form of Class B-6 Certificate
Exhibit A-21 Form of Class B-7 Certificate
Exhibit A-22 Form of Class B-7H Certificate
Exhibit A-23 Form of Class V-1 Certificate
Exhibit A-24 Form of Class V-2 Certificate
Exhibit A-25 Form of Class R Certificate
Exhibit A-26 Form of Class LR Certificate
Exhibit B Mortgage Loan Schedule
Exhibit C-1 Form of Transferee Affidavit
Exhibit C-2 Form of Transferor Letter
Exhibit D-1 Form of Investment Representation Letter
Exhibit D-2 Form of ERISA Representation Letter
Exhibit E Form of Request for Release
Exhibit F Form of Custodial Agreement
Exhibit G Securities Legend
Exhibit H Form of Mortgage Loan Purchase and Sale Agreement
Exhibit I-1 Form of Comparative Financial Status Report
Exhibit I-2 Form of Delinquent Loan Status Report
Exhibit I-3 Form of Historical Loan Modification Report
Exhibit I-4 Form of Historical Loss Estimate Report
Exhibit I-5 Form of REO Status Report
Exhibit I-6 Form of Watch List
Exhibit I-7 Form of Operating Statement Analysis Report
Exhibit I-8 Form of NOI Adjustment Worksheet
Pooling and Servicing Agreement, dated as of March 27, 1997,
among Asset Securitization Corporation, as Depositor, AMRESCO Management, Inc.,
as Servicer and initial Special Servicer, LaSalle National Bank, as Trustee,
and ABN AMRO Bank N.V., as Fiscal Agent.
PRELIMINARY STATEMENT:
(Terms used but not defined in this Preliminary Statement shall have the
meanings specified in Article I hereof)
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, exclusive of the Lock-Box Accounts, Cash Collateral Accounts, Reserve
Accounts, the Default Interest, the Default Interest Distribution Account, the
Excess Interest and the Excess Interest Distribution Account (such portion of
the Trust Fund, the "Trust REMICs"), be treated for federal income tax purposes
as two separate real estate mortgage investment conduits (each, a "REMIC" or,
in the alternative, the "Lower-Tier REMIC" and the "Upper-Tier REMIC,"
respectively). The Class A-1A, Class A-1B, Class A-1C, Class A-1D, Class A-CS1,
Class PS-1, Class A-1E, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6,
Class A-7, Class A-8, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5,
Class B-6, Class B-7 and Class B-7H Certificates constitute "regular interests"
in the Upper-Tier REMIC and the Class R Certificates constitute the sole Class
of "residual interests" in the Upper-Tier REMIC for purposes of the REMIC
Provisions. The Class LR Certificates constitute the sole Class of "residual
interests" in the Lower-Tier REMIC for purposes of the REMIC Provisions. There
are also seventeen Classes of uncertificated Lower-Tier Regular Interests
issued under this Agreement (the Class A-1A-L, Class A-1B-L, Class A-1C-L,
Class A-1D-L, Class A-1E-L, Class A-2-L, Class A-3-L, Class A-4-L, Class A-5-L,
Class A-6-L, Class A-7-L, Class A-8-L, Class B-1-L, Class B-2-L, Class B-3-L,
Class B-4-L, Class B-5-L, Class B-6-L, Class B-7-L and Class B-7H-L Interests),
each of which will constitute a regular interest in the Lower-Tier REMIC. All
such Lower-Tier Regular Interests will be held by the Trustee as assets of the
Upper-Tier REMIC. The parties intend that the portions of the Trust Fund
representing the Default Interest, the Default Interest Distribution Account,
the Excess Interest and the Excess Interest Distribution Account will be
treated as a grantor trust under Subpart E of Part 1 of Subchapter J of the
Code, that the Class V-1 Certificates represent pro rata undivided beneficial
interests in the portion of the Trust Fund consisting of the Net Default
Interest and the Default Interest Distribution Account and that the Class V-2
Certificates represent pro rata undivided beneficial interests in the portion
of the Trust Fund consisting of the Excess Interest and the Excess Interest
Distribution Account.
The following table sets forth the designation and aggregate
initial Certificate Balance (or, with respect to the Class A-CS1 and Class PS-1
Certificates, Notional Balance) for each Class of Certificates comprising
interests in the Upper-Tier REMIC.
Class Certificate Balance or Notional Balance
Class A-1A $127,000,000.00
Class A-1B $91,010,000.00
Class A-1C $65,000,000.00
Class A-1D $671,228,903.00
Class A-1E $84,197,550.00
Class A-CS1(1) $127,000,000.00
Class PS-1(2) $1,403,292,505.00
Class A-2 $28,065,850.00
Class A-3 $49,115,237.00
Class A-4 $21,049,387.00
Class A-5 $42,098,775.00
Class A-6 $28,065,850.00
Class A-7 $21,049,387.00
Class A-8 $21,049,387.00
Class B-1 $35,082,312.00
Class B-2 $35,082,312.00
Class B-3 $14,032,925.00
Class B-4 $21,049,387.00
Class B-5 $14,032,925.00
Class B-6 $14,032,925.00
Class B-7 $21,048,393.00
Class B-7H $1,000.35
(1) The initial Notional Balance of Class PS-1 Certificates is equal to the
aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date.
(2) The initial Notional Balance of the Class CS-1 Certificates is equal to the
initial Certificate Balance of the Class A-1A Certificates.
The initial Certificate Balance of each of the Class V-1,
Class V-2, Class R and Class LR Certificates is zero. Additionally, the Class
V-1, Class V-2, Class R and Class LR Certificates do not have a Notional
Balance. 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; provided, however, that
in the event that amounts previously allocated as Realized Losses to a Class of
Certificates in reduction of the Certificate Balance thereof are recovered
subsequent to the reduction of the Certificate Balance of such Class to zero,
such Class may receive distributions in respect of such recoveries in
accordance with the priorities set forth in Section 4.01.
As of the Cut-off Date, the Mortgage Loans have an aggregate
Stated Principal Balance equal to approximately $1,403,292,505.
In consideration of the mutual agreements herein contained,
the Depositor, the Servicer, the initial Special Servicer, the Trustee and the
Fiscal Agent agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. 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.
"Act": The Securities Act of 1933, as it may be amended from
time to time.
"Actual/360 Mortgage Loans": The Mortgage Loans indicated as
such in the Mortgage Loan Schedule.
"Advance": Any P&I Advance or Property Advance.
"Advance Interest Amount": Interest at the Advance Rate on
the aggregate amount of P&I Advances and Property Advances for which the
Servicer, the Special Servicer, the Trustee or the Fiscal Agent, as applicable,
have not been reimbursed and Servicing Fees, Trustee Fees or Special Servicing
Compensation for which the Servicer, the Trustee or the Special Servicer, as
applicable, has not been timely paid or reimbursed for the number of days from
the date on which such Advance was made or such Servicing Fees, Trustee Fees or
Special Servicing Compensation were due through the date of payment or
reimbursement of the related Advance or other such amount, less any amount of
interest previously paid on such Advance or Servicing Fees, Trustee Fees or
Special Servicing Compensation; provided, that, with respect to a P&I Advance,
in the event that the related Borrower makes payment of the amount in respect
of which such P&I Advance was made with interest at the Default Rate, the
Advance Interest Amount payable to the Servicer, the Trustee or the Fiscal
Agent shall be paid (i) first from the amount of Default Interest paid by the
Borrower and (ii) to the extent such amounts are insufficient therefor, from
amounts on deposit in the Collection Account.
"Advance Rate": A per annum rate equal to the sum of (i) the
Prime Rate (as most recently published in the "Money Rates" section of The Wall
Street Journal, New York edition, on or before the related Record Date) plus
(ii) 1%, compounded monthly as of each Servicer Remittance Date. Interest at
the Advance Rate will accrue from (and including) the date on which the related
Advance is made or the related expense incurred to (but excluding) the first
Servicer Remittance Date after the date on which such amounts are recovered out
of amounts received on the Mortgage Loan as to which such Advances were made or
servicing expenses incurred or the first Servicer Remittance Date after a
determination of non-recoverability, as the case may be, is made, provided that
such interest at the Advance Rate will continue to accrue to the extent funds
are not available in the Collection Account for such reimbursement of such
Advance.
"Affiliate": With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any specified Person means the power to direct the management and policies
of such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. The Trustee may obtain
and rely on an Officers' Certificate of the Servicer, the Special Servicer, or
the Depositor to determine whether any Person is an Affiliate of such party.
"Affiliated Person": Any Person (other than a Rating Agency)
involved in the organization or operation of the Depositor or an affiliate, as
defined in Rule 405 of the Act, of such Person.
"Agent Member": Members of, or Depository Participants in,
the Depository.
"Agreement": This Pooling and Servicing Agreement and all
amendments hereof and supplements hereto.
"Allocated Loan Amount": With respect to each Mortgaged
Property, the portion of the principal amount of the related Mortgage Loan
allocated to such Mortgaged Property in the applicable Mortgage or Loan
Agreement.
"Annual Compliance Report": A report consisting of an annual
statement of compliance required by Section 3.14 hereof and an annual report of
an Independent accountant required pursuant to Section 3.15 hereof.
"Anticipated Repayment Date": With respect to any Mortgage
Loan that is indicated on the Mortgage Loan Schedule as having a Revised
Mortgage Rate, the date upon which such Mortgage Loan commences accruing
interest at such Revised Rate.
"Anticipated Termination Date": Any Distribution Date on
which it is anticipated that the Trust Fund will be terminated pursuant to
Section 9.01(c).
"Applicable Monthly Payment": As defined in Section 4.06(a).
"Appraisal Reduction Amount": For any Distribution Date and
for any Mortgage Loan as to which an Appraisal Reduction Event has occurred, an
amount equal to the excess, if any, of (a) the Stated Principal Balance of such
Mortgage Loan over (b) the excess of (i) 90% of the sum of the appraised values
of the related Mortgaged Properties as determined by Updated Appraisals
obtained by the Servicer of the Mortgaged Properties securing such Mortgage
Loan over (ii) the sum of (A) to the extent not previously advanced by the
Servicer, the Trustee or the Fiscal Agent, all unpaid interest on such Mortgage
Loan at a per annum rate equal to its Mortgage Rate, (B) all unreimbursed
Advances, with interest thereon at the Advance Rate, in respect of such
Mortgage Loan and (C) all currently due and unpaid real estate taxes, ground
rents and assessments and insurance premiums and all other amounts due and
unpaid with respect to such Mortgage Loan (which taxes, premiums and other
amounts have not been the subject of an Advance by the Servicer, the Trustee or
the Fiscal Agent, as applicable). If no Updated Appraisal has been obtained
within the last 12 months prior to the first Distribution Date on or after an
Appraisal Reduction Event has occurred, the Servicer shall estimate the value
of the related Mortgaged Properties (the "Servicer's Appraisal Estimate") and
such estimate shall be used for purposes of determining the Appraisal Reduction
Amount for such Distribution Date. Within 30 days after the Servicer receives
notice or is otherwise aware of the Appraisal Reduction Event, the Servicer
shall obtain an Updated Appraisal. On the first Distribution Date occurring on
or after the delivery of such appraisal, the Servicer shall adjust the
Appraisal Reduction Amount to take into account such appraisal (regardless of
whether the Updated Appraisal is higher or lower than the Servicer's Appraisal
Estimate). Each Appraisal Reduction Amount shall also be adjusted to take into
account any subsequent Updated Appraisal and annual letter updates, as of the
date of each such subsequent Updated Appraisal or letter update.
"Appraisal Reduction Event": With respect to any Mortgage
Loan, the first Distribution Date following the earliest of (i) the third
anniversary of the date on which an extension of the Maturity Date of such
Mortgage Loan becomes effective as a result of a modification of such Mortgage
Loan by the Special Servicer pursuant to the terms hereof, which extension does
not change the amount of Monthly Payments on the Mortgage Loan (unless during
such extension period the borrower has been delinquent for 60 days or more, in
which case, the first Distribution Date following such 60 day delinquency),
(ii) 90 days after an uncured Delinquency (without regard to the application of
any grace period) occurs in respect of such Mortgage Loan, (iii) immediately
after the date on which a reduction in the amount of Monthly Payments on such
Mortgage Loan, or a change in any other material economic term of such Mortgage
Loan (other than an extension of the Maturity Date), becomes effective as a
result of a modification of such Mortgage Loan by the Special Servicer, (iv)
immediately after a receiver has been appointed, (v) immediately after a
borrower declares bankruptcy, (vi) immediately after a Mortgage Loan becomes an
REO Mortgage Loan, (vii) upon a default in the payment of a Balloon Payment,
(viii) immediately upon the occurrence of an event for which a Property Advance
would be required to be made by the Servicer or (ix) any other event which, in
the discretion of the Servicer and of which the Servicer becomes aware in
performing its obligations hereunder, in accordance with the Servicing
Standard, would materially and adversely impair the value of a Mortgaged
Property and security for the related Mortgage Loan. The Special Servicer shall
notify the Servicer promptly upon the occurrence of any of the foregoing
events.
"Assignment of Leases, Rents and Profits": With respect to
any Mortgaged Property, any assignment of leases, rents and profits or similar
agreement executed by the Borrower, assigning to the mortgagee all of the
income, rents and profits derived from the ownership, operation, leasing or
disposition of all or a portion of such Mortgaged Property, in the form which
was duly executed, acknowledged and delivered, 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 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
Custodian and the Servicer shall be responsible for determining whether any
assignment is legally sufficient or in recordable form.
"Assumed Maturity Date": With respect to any Mortgage Loan
that is not a Balloon Loan, the maturity date of such Mortgage Loan. With
respect to any Balloon Loan, the date on which such Mortgage Loan would be
deemed to mature in accordance with its original amortization schedule absent
its Balloon Payment.
"Assumed Scheduled Payment": With respect to any Mortgage
Loan that is delinquent in respect of its Balloon Payment (including any REO
Mortgage Loan as to which the Balloon Payment would have been past due), an
amount equal to the sum of (a) the principal portion of the Monthly Payment
that would have been due on such Mortgage Loan on the related Due Date (or
portion thereof not received), based on the constant Monthly Payment that would
have been due on such Mortgage Loan on the related Due Date based on the
constant payment required by the related Note or the amortization or payment
schedule thereof (as calculated with interest at the related Mortgage Rate) (if
any), assuming such Balloon Payment had not become due, after giving effect to
any prior modification, and (b) interest at the applicable Mortgage
Pass-Through Rate.
"Assumption Fees": Any fees collected by the Servicer or
Special Servicer in connection with an assumption or modification of a Mortgage
Loan or substitution of a Borrower thereunder permitted to be executed under
the provisions of this Agreement.
"Authenticating Agent": Any authenticating agent appointed by
the Trustee pursuant to Section 3.20.
"Available Funds": For a Distribution Date, the sum of (i)
all previously undistributed Monthly Payments, Minimum Defaulted Monthly
Payments or other receipts on account of principal and interest (including
Unscheduled Payments and any Net REO Proceeds transferred from an REO Account
pursuant to Section 3.17(b)) on or in respect of the Mortgage Loans, received
by the Servicer in the Collection Period relating to such Distribution Date,
(ii) all other amounts received by the Servicer in such Collection Period and
required to be placed in the Collection Account by the Servicer pursuant to
Section 3.05 allocable to such Mortgage Loans, and including all P&I Advances
(excluding Subordinate Class Advance Amounts) made by the Servicer, the Trustee
or the Fiscal Agent in respect of such Distribution Date, (iii) for the
Distribution Date occurring in each March, the Withheld Amounts remitted to the
Distribution Account pursuant to Section 3.27(b), (iv) any late payments of
Monthly Payments received after the end of the Collection Period relating to
such Distribution Date but prior to the related Servicer Remittance Date and
(v) any Servicer Prepayment Interest Shortfalls remitted by the Servicer to the
Collection Account, but excluding the following:
(a) amounts permitted to be used to reimburse the
Servicer, the Special Servicer, the Trustee or the
Fiscal Agent, as applicable, for previously
unreimbursed Advances and interest thereon as
described in Section 3.06(ii) and (iii);
(b) those portions of each payment of interest which
represent the applicable Servicing Fee, and Trustee
Fee and an amount representing any applicable
Special Servicing Compensation, including interest
thereon at the Advance Rate as provided in this
Agreement;
(c) all amounts in the nature of late fees (subject to
Section 3.12 hereof), loan modification fees,
extension fees, loan service transaction fees,
demand fees, beneficiary statement charges,
Assumption Fees and similar fees, which the Servicer
or the Special Servicer is entitled to retain as
Servicing Compensation or Special Servicing
Compensation, respectively;
(d) all amounts representing scheduled Monthly
Payments due after the related Due Date;
(e) that portion of Net Liquidation Proceeds or Net
Insurance Proceeds with respect to a Mortgage Loan
which represents any unpaid Servicing Fee, Trustee
Fee and Special Servicing Compensation, including
interest thereon at the Advance Rate as provided in
this Agreement, to which the Servicer, Trustee and
the Special Servicer, respectively, are entitled;
(f) all amounts representing certain expenses
reimbursable or payable to the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent and other
amounts permitted to be retained by the Servicer or
withdrawn by the Servicer from the Collection
Account to the extent expressly set forth in this
Agreement (including, without limitation, as
provided in Section 3.06 and including any
indemnities provided for herein), including interest
thereon as provided in this Agreement;
(g) any interest or investment income on funds on
deposit in the Collection Account, the Upper-Tier
Distribution Account, the Distribution Account, the
Default Interest Distribution Account, the Excess
Interest Distribution Account, the Interest Reserve
Account, any Cash Collateral Account, any Lock-Box
Account, any Reserve Account or any REO Account or
in Permitted Investments in which such funds may be
invested;
(h) with respect to the Interest Reserve Loans and any
Distribution Date relating to each Interest Accrual
Period ending in each February or any January in a
year immediately preceding a year which is not a
leap year, an amount equal to one day of interest on
the Stated Principal Balance of such Mortgage Loan
as of the Due Date in the month preceding the month
in which such Distribution Date occurs at the
related Mortgage Rate to the extent such amounts are
to be deposited in the Interest Reserve Account and
held for future distribution pursuant to Section
3.27;
(i) all amounts received with respect to each Mortgage
Loan previously purchased or repurchased pursuant to
Sections 2.03(d), 2.03(e), 3.18 or 9.01 during the
related Collection Period and subsequent to the date
as of which the amount required to effect such
purchase or repurchase was determined;
(j) the amount reasonably determined by the Trustee to
be necessary to pay any applicable federal, state or
local taxes imposed on the Upper-Tier REMIC or the
Lower-Tier REMIC under the circumstances and to the
extent described in Section 4.05;
(k) Prepayment Premiums;
(l) Default Interest; and
(m) Excess Interest.
"Balloon Loan": Any Mortgage Loan that requires a payment of
principal on the maturity date in excess of its constant Monthly Payment.
"Balloon Payment": With respect to each Mortgage Loan, the
scheduled payment of principal due on the Maturity Date (less principal
included in the applicable amortization schedule or scheduled Monthly Payment).
"Beneficial Owner": With respect to a Global Certificate, the
Person who is the beneficial owner of such Certificate as reflected on the
books of the Depository or on the books of a Person maintaining an account with
such Depository (directly as a Depository Participant or indirectly through a
Depository Participant, in accordance with the rules of such Depository) and
with respect to the Classes of Global Certificates comprising the Units, the
beneficial owner of such Unit as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as
a Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository) with respect to such Classes.
Each of the Trustee and the Servicer shall have the right to require, as a
condition to acknowledging the status of any Person as a Beneficial Owner under
this Agreement, that such Person provide evidence at its expense of its status
as a Beneficial Owner hereunder.
"Bloomfield Purchase Agreement": With respect to any Mortgage
Loan not originated by the Mortgage Loan Seller, the agreement between the
Mortgage Loan Seller and Bloomfield Acceptance Company, LLC pursuant to which
the Mortgage Loan Seller acquired such Mortgage Loan.
"Borrower": With respect to any Mortgage Loan, any obligor or
obligors on any related Note or Notes.
"Borrower Account": As defined in Section 3.07(a).
"Business Day": Any day other than a Saturday, a Sunday or
any day on which banking institutions in the City of New York, New York, the
City of Chicago, Illinois, the State of Georgia or the State of Texas are
authorized or obligated by law, executive order or governmental decree to be
closed.
"Cash Collateral Account": With respect to any Mortgage Loan
that has a Lock-Box Account, any account or accounts created pursuant to the
related Mortgage, Loan Agreement, Cash Collateral Account Agreement or other
loan document into which the Lock-Box Account monies are swept on a regular
basis for the benefit of the Trustee as successor to the Mortgage Loan Seller.
Any Cash Collateral Account shall be beneficially owned for federal income tax
purposes by the Person who is entitled to receive all reinvestment income or
gain thereon in accordance with the terms and provisions of the related
Mortgage Loan and Section 3.07, which Person shall be taxed on all reinvestment
income or gain thereon. The Servicer shall be permitted to make withdrawals
therefrom for deposit into the Collection Account. To the extent not
inconsistent with the terms of the related Mortgage Loan, each such Cash
Collateral Account shall be an Eligible Account.
"Cash Collateral Account Agreement": With respect to any
Mortgage Loan, the cash collateral account agreement, if any, between the
Originator and the related Borrower, pursuant to which the related Cash
Collateral Account, if any, may have been established.
"Cash Deposit": An amount equal to all cash payments of
principal and interest received by the Mortgage Loan Seller in respect of the
Mortgage Loans prior to or on the Closing Date that are due after the Cut-off
Date.
"CEDEL": Citibank, N.A., as depositary for Centrale de
Livraison de Valeurs Mobilieres, S.A., or its successor in such capacity.
"Certificate": Any Class A-1A, Class A-1B, Class A-1C, Class
A-1D, Class A-1E, Class A-CS1, Class PS-1, Class A-2, Class A-3, Class A-4,
Class A-5, Class A-6, Class A-7, Class A-8, Class B-1, Class B-2, Class B-3,
Class B-4, Class B-5, Class B-6, Class B-7, Class B-7H, Class V-1, Class V-2,
Class R or Class LR Certificate issued, authenticated and delivered hereunder.
"Certificate Balance": With respect to any Class of
Certificates or Lower-Tier Regular Interests (other than the Class A-CS1, Class
PS-1, Class V-1, Class V-2, Class R and Class LR Certificates) (a) on or prior
to the first Distribution Date, an amount equal to the aggregate initial
Certificate Balance of such Class, as specified in the Preliminary Statement
hereto, (b) as of any date of determination after the first Distribution Date,
the Certificate Balance of such Class of Certificates or Lower-Tier Regular
Interests on the Distribution Date immediately prior to such date of
determination after distributions and Realized Losses allocable to principal
have been made thereon on such prior Distribution Date; provided that for
purposes of determining Voting Rights, the Certificate Balance of the Class
(other than the Class A-1A, Class A-1B, Class A-1C and Class A-1D Certificates)
shall be deemed to have been reduced by an amount equal to the amount of
Appraisal Reductions allocated for purposes of Section 4.06 and in reverse
order of alphabetical designation; provided further that no such reduction
shall apply to the Voting Rights of the Class PS-1 and Class A-CS1
Certificates. With respect to any Class of Lower-Tier Regular Interests, the
Certificate Balance thereof shall, in any event, be equal to the Certificate
Balance of the Related Certificates.
"Certificate Custodian": Initially, LaSalle National Bank;
thereafter any other Certificate Custodian acceptable to the Depository and
selected by the Trustee.
"Certificate Register" and "Certificate Registrar": The
register maintained and the registrar appointed pursuant to Section 5.02.
"Certificateholder": The Person whose name is registered in
the Certificate Register subject to the following:
(i) except as provided in clause (ii), for the purpose of
giving any consent or taking any action pursuant to this Agreement, any
Certificate beneficially owned by the Depositor, the Servicer, the Special
Servicer, the Trustee, a Manager or a Borrower or any Person known to a
Responsible Officer of the Certificate Registrar to be an Affiliate of any
thereof shall be deemed not to be outstanding and the Voting Rights to which it
is entitled shall not be taken into account in determining whether the
requisite percentage of Voting Rights necessary to effect any such consent or
take any such action has been obtained;
(ii) for purposes of obtaining the consent of
Certificateholders to an amendment of the Pooling and Servicing Agreement, any
Certificates beneficially owned by the Servicer or the Special Servicer or an
Affiliate thereof shall be deemed to be outstanding, unless such amendment
relates to compensation of the Servicer or the Special Servicer or benefits the
Servicer or the Special Servicer (in its capacity as such) or any Affiliate
thereof (other than solely in its capacity as Certificateholder) in any
material respect, in which case such Certificates shall be deemed not to be
outstanding;
(iii) except as provided in clause (iv) below, for purposes
of obtaining the consent of Certificateholders to any action proposed to be
taken by the Special Servicer with respect to a Specially Serviced Mortgage
Loan, any Certificates beneficially owned by the Special Servicer or an
Affiliate thereof shall be deemed not to be outstanding;
(iv) for purposes of Section 3.30 (for purposes of
determining who the Directing Holders are), Certificates owned by the Special
Servicer or an Affiliate shall be deemed to be outstanding; and
(v) for purposes of providing or distributing any reports,
statements or other information required or permitted to be provided to a
Certificateholder hereunder, a Certificateholder shall include any Beneficial
Owner, or any Person identified by a Beneficial Owner as a prospective
transferee of a Certificate beneficially owned by such Beneficial Owner, but
only if the Trustee or another party hereto furnishing such report, statement
or information has been provided with the name of the Beneficial Owner of the
related Certificate or the Person identified as a prospective transferee
thereof. For purposes of the foregoing, the Depositor, the Servicer, the
Special Servicer, the Trustee, the Paying Agent, the Fiscal Agent or other such
Person may rely, without limitation, on a Depository Participant listing from
the Depository or statements furnished by a Person that on their face appear to
be statements from a Depository Participant to such Person indicating that such
Person beneficially owns Certificates.
"Class": With respect to the Certificates or Lower-Tier
Regular Interests, all of the Certificates or Lower-Tier Regular Interests
bearing the same alphabetical and numerical Class designation.
"Class A-1A 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-1A Pass-Through Rate": A per annum rate equal to
7.35%.
"Class A-1A-L Interest": A regular interest in the Lower-Tier
REMIC entitled to monthly distributions payable thereto pursuant to Section
4.01.
"Class A-1B 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-1B Pass-Through Rate": A per annum rate equal to
7.40%.
"Class A-1B-L Interest": A regular interest in the Lower-Tier
REMIC entitled to monthly distributions payable thereto pursuant to Section
4.01.
"Class A-1C 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 A-1C Pass-Through Rate": A per annum rate equal to
7.42%.
"Class A-1C-L Interest": A regular interest in the Lower-Tier
REMIC entitled to monthly distributions payable thereto pursuant to Section
4.01.
"Class A-1D 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 A-1D Pass-Through Rate": A per annum rate equal to
7.49%.
"Class A-1D-L Interest": A regular interest in the Lower-Tier
REMIC entitled to monthly distributions payable thereto pursuant to Section
4.01.
"Class A-1E 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 A-1E Pass-Through Rate": A per annum rate equal to
7.525%.
"Class A-1E-L Interest": A regular interest in the Lower-Tier
REMIC entitled to monthly distributions payable thereto pursuant to Section
4.01.
"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-8 hereto.
"Class A-2 Pass-Through Rate": A per annum rate equal to the
Weighted Average Net Mortgage Pass-Through Rate minus 1.21%.
"Class A-2-L Interest": A regular interest in the Lower-Tier
REMIC entitled to monthly distributions payable thereto pursuant to Section
4.01.
"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-9 hereto.
"Class A-3 Pass-Through Rate": A per annum rate equal to the
Weighted Average Net Mortgage Pass-Through Rate minus 1.16%.
"Class A-3-L Interest": A regular interest in the Lower-Tier
REMIC entitled to the monthly distributions payable thereto pursuant to Section
4.01.
"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-10 hereto.
"Class A-4 Pass-Through Rate": A per annum rate equal to the
Weighted Average Net Mortgage Pass-Through Rate minus 1.13%.
"Class A-4-L Interest": A regular interest in the Lower-Tier
REMIC entitled to the monthly distributions payable thereto pursuant to Section
4.01.
"Class A-5 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 A-5 Pass-Through Rate": A per annum rate equal to the
Weighted Average Net Mortgage Pass-Through Rate minus 1.08%.
"Class A-5-L Interest": A regular interest in the Lower-Tier
REMIC entitled to the monthly distributions payable thereto pursuant to Section
4.01.
"Class A-6 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 A-6 Pass-Through Rate": A per annum rate equal to the
Weighted Average Net Mortgage Pass-Through Rate minus 0.99%.
"Class A-6-L Interest": A regular interest in the Lower-Tier
REMIC entitled to the monthly distributions payable thereto pursuant to Section
4.01.
"Class A-7 Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-13 hereto.
"Class A-7 Pass-Through Rate": A per annum rate equal to the
Weighted Average Net Mortgage Pass-Through Rate minus 0.94%.
"Class A-7-L Interest": A regular interest in the Lower-Tier
REMIC entitled to the monthly distributions payable thereto pursuant to Section
4.01.
"Class A-8 Certificate": Any one of the Certificates executed
and authenticated by the Trustee or the Authenticating Agent on behalf of the
Depositor in substantially the form set forth in Exhibit A-14 hereto.
"Class A-8 Pass-Through Rate": A per annum rate equal to the
Weighted Average Net Mortgage Pass-Through Rate minus 0.59%.
"Class A-8-L Interest": A regular interest in the Lower-Tier
REMIC entitled to the monthly distributions payable thereto pursuant to Section
4.01.
"Class A-CS1 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. The
Class A-CS1 Certificates are comprised entirely of the Class A-1A Strip
Component.
"Class A-CS1 Pass-Through Rate": A per annum rate equal to
the Weighted Average Net Mortgage Pass-Through Rate minus 7.35%.
"Class B-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-15 hereto.
"Class B-1 Pass-Through Rate": A per annum rate equal to
7.525%.
"Class B-1-L Interest": A regular interest in the Lower-Tier
REMIC entitled to the monthly distributions payable thereto pursuant to Section
4.01.
"Class B-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-__ hereto.
"Class B-2 Pass-Through Rate": A per annum rate equal to
7.525%.
"Class B-2-L Interest": A regular interest in the Lower-Tier
REMIC entitled to the monthly distributions payable thereto pursuant to Section
4.01.
"Class B-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-17 hereto.
"Class B-3 Pass-Through Rate": A per annum rate equal to
7.525%.
"Class B-3-L Interest": A regular interest in the Lower-Tier
REMIC entitled to the monthly distributions payable thereto pursuant to Section
4.01.
"Class B-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-18 hereto.
"Class B-4 Pass-Through Rate": A per annum rate equal to
7.525%.
"Class B-4-L Interest": A regular interest in the Lower-Tier
REMIC entitled to monthly distributions payable thereto pursuant to Section
4.01.
"Class B-5 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-19 hereto.
"Class B-5 Pass-Through Rate": A per annum rate equal to
7.525%.
"Class B-5-L Interest": A regular interest in the Lower-Tier
REMIC entitled to monthly distributions payable thereto pursuant to Section
4.01.
"Class B-6 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-20 hereto.
"Class B-6 Pass-Through Rate": A per annum rate equal to
7.525%.
"Class B-6-L Interest": A regular interest in the Lower-Tier
REMIC entitled to monthly distributions payable thereto pursuant to Section
4.01.
"Class B-7 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-21 hereto.
"Class B-7 Pass-Through Rate": A per annum rate equal to the
Weighted Average Net Mortgage Pass-Through Rate.
"Class B-7-L Interest": A regular interest in the Lower-Tier
REMIC entitled to the monthly distributions payable thereto pursuant to Section
4.01.
"Class B-7H 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-22 hereto.
"Class B-7H Pass-Through Rate": A per annum rate equal to the
Weighted Average Net Mortgage Pass-Through Rate.
"Class B-7H-L Interest": A regular interest in the Lower-Tier
REMIC entitled to the monthly distributions payable thereto pursuant to Section
4.01.
"Class Interest Distribution Amount": With respect to any
Distribution Date and the Class A-1A, Class A-1B, Class A-1C, Class A-1D, Class
A-1E, Class A-CS1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class
A-7, Class A-8, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5, Class
B-6, Class B-7 and Class B-7H Certificates, an amount equal to the Interest
Accrual Amount thereof for such Distribution Date; with respect to any
Distribution Date and the Class PS-1 Certificates, the Interest Accrual Amounts
thereof for such Distribution Date minus the aggregate Reduction Interest
Distribution Amounts in respect of such Distribution Date.
"Class Interest Shortfall": On any Distribution Date for any
Class and/or Strip Component of such Class, as applicable, of Certificates, the
amount of interest (other than Net Default Interest, Excess Interest, Reduction
Interest Distribution Amounts or Reduction Interest Shortfalls) required to be
distributed to the Holders of such Class and/or in respect of such Strip
Component pursuant to Section 4.01(b) on such Distribution Date minus the
amount of interest (other than Net Default Interest, Excess Interest, Reduction
Interest Distribution Amounts or Reduction Interest Shortfalls) actually
distributed to such Holders pursuant to such Section, if any.
"Class PS-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-2 hereto.
"Class PS-1 Pass Through Rate": A per annum rate equal to the
Weighted Average Net Mortgage Pass-Through Rate minus the Weighted Average
Pass-Through Rate.
"Class LR 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-26 hereto. The Class
LR Certificates have no Pass-Through Rate, Certificate Balance or Notional
Balance.
"Class R 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-25 hereto. The Class
R Certificates have no Pass-Through Rate, Certificate Balance or Notional
Balance.
"Class V-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-23 hereto. The Class
V-1 Certificates have no Pass-Through Rate, Certificate Balance or Notional
Balance.
"Class V-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 Exhibits A-24 hereto. The
Class V-2 Certificates have no Pass-Through Rate, Certificate Balance or
Notional Balance.
"Closing Date": On or about March 27, 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.
"Collateral Account": As defined in Section 3.30(e). The
Collateral Account shall be maintained as an Eligible Account.
"Collection Account": The trust account or accounts created
and maintained by the Servicer pursuant to Section 3.05(a), which shall be
entitled "AMRESCO Management, Inc. in trust for LaSalle National Bank, as
Trustee, in trust for Holders of Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997-D4, Collection Account" and
which must be an Eligible Account.
"Collection Period": With respect to a Distribution Date and
each Mortgage Loan, the period beginning on the day after the Due Date, in the
month preceding the month in which such Distribution Date occurs (or, in the
case of the Distribution Date occurring in April 1997, on the day after the
Cut-off Date) and ending at the close of business on the Due Date, in the month
in which such Distribution Date occurs.
"Commission": The Securities and Exchange Commission.
"Comparative Financial Status Report": A report substantially
containing the content described in Exhibit I-1 attached hereto, setting forth,
among other things, the occupancy, revenue, net operating income and Debt
Service Coverage Ratio for each Mortgage Loan as of the date of the latest
financial information available immediately preceding the preparation of such
report for each of the following three periods (to the extent such information
is available): (i) the most current available year-to-date, (ii) the previous
two full fiscal years, and (iii) the "base year" (representing the original
analysis of information used as of the Cut-off Date). For the purposes of the
Servicer's production of any such report that is required to state information
for any period prior to the Cut-off Date, the Servicer may conclusively rely
(without independent verification), absent manifest error, on information
provided to it by the Mortgage Loan Seller.
"Corporate Trust Office": The principal office of the Trustee
located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or the
principal trust office of any successor trustee qualified and appointed
pursuant to Section 8.08.
"Cross-over Date": means the Distribution Date on which the
Certificate Balance of each Class of Certificates other than the Class A-1A,
Class A-1B, Class A-1C and Class A-1D Certificates have been reduced to zero.
"Custodial Agreement": The Custodial Agreement, if any, from
time to time in effect between the Custodian named therein and the Trustee,
substantially in the form of Exhibit F hereto, as the same may be amended or
modified from time to time in accordance with the terms thereof.
"Custodian": Any Custodian appointed pursuant to Section 3.21
and, unless the Trustee is Custodian, named pursuant to any Custodial
Agreement. The Custodian may (but need not) be the Trustee or the Servicer or
any Affiliate of the Trustee or the Servicer, but may not be the Depositor or
any Affiliate thereof.
"Cut-off Date": March 27, 1997.
"DCR": Duff & ▇▇▇▇▇▇ Credit Rating Co., or its successor in
interest.
"Debt Service Coverage Ratio": With respect to any Mortgage
Loan as of any date of determination and for any period, the ratio calculated
by dividing the net operating income of the related Mortgaged Property or
Mortgaged Properties, as the case may be, for the most recently ended one-year
period for which data is available from the related Borrower, before payment of
any scheduled payments of principal and interest on such Mortgage Loan but
after funding of required reserves and "normalized" by the Servicer pursuant to
Section 3.13, by the annual debt service required by such Mortgage Loan. Annual
debt service shall be calculated by multiplying the Monthly Payment in effect
on such date of determination for such Mortgage Loan by 12.
"Default Interest": With respect to any Mortgage Loan,
interest accrued on such Mortgage Loan at the excess of (i) the related Default
Rate over (ii) the sum of the related Mortgage Rate and, if applicable, the
related Excess Rate. The Default Interest shall not be an asset of the
Lower-Tier REMIC or the Upper-Tier REMIC formed hereunder.
"Default Interest Distribution Account": The trust account or
accounts created and maintained as a separate trust account or accounts by the
Trustee pursuant to Section 3.05(d), which shall be entitled "LaSalle National
Bank, as Trustee, in trust for Holders of Asset Securitization Corporation,
Commercial Mortgage Pass-Through Certificates, Series 1997-D4, Default Interest
Distribution Account" and which must be an Eligible Account. The Default
Interest Distribution Account shall not be an asset of the Lower-Tier REMIC or
the Upper-Tier REMIC formed hereunder.
"Default Rate": With respect to each Mortgage Loan, the per
annum 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 on the Mortgage
Loan Schedule.
"Delinquency": Any failure of a Borrower to make a scheduled
payment on a Due Date.
"Delinquency Reduction Amount": In connection with a
Delinquency, an amount equal to the scheduled payment (or portion thereof) due
on the related Due Date (adjusted to the applicable Net Mortgage Pass-Through
Rate with respect to the interest portion) and not received from a Borrower
under any Mortgage Loan.
"Delinquent Loan Status Report": A report substantially
containing the content described in Exhibit I-2 attached hereto, setting forth,
among other things, those Mortgage Loans which, as of the close of business on
the Due Date immediately preceding the preparation of such report, were
delinquent 1 Collection Period, delinquent 2 Collection Periods, delinquent 3
Collection Periods or more, current but specially serviced, or were in
foreclosure but were not REO Property.
"Denomination": As defined in Section 5.01(a).
"Depositor": Asset Securitization Corporation, a Delaware
corporation, and its successors and assigns.
"Depository": The Depository Trust Company or a successor
appointed by the Certificate Registrar (which appointment shall be at the
direction of the Depositor if the Depositor is legally able to do so).
"Depository Participant": A Person for whom, from time to
time, the Depository effects book-entry transfers and pledges of securities
deposited with the Depository.
"Directing Holders": As defined in Section 3.30(d).
"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 in the ordinary course of
a trade or business, or any use of such REO Property in a trade or business
conducted by the Trust Fund, or the performance of any construction work on the
REO Property other than through an Independent Contractor; provided, however,
that the Special Servicer, on behalf of the Trust Fund, shall not be considered
to Directly Operate an REO Property solely because the Special Servicer, on
behalf of the Trust Fund, establishes rental terms, chooses tenants, enters
into or renews leases, deals with taxes and insurance, or makes decisions as to
repairs or capital expenditures with respect to such REO Property or takes
other actions consistent with Section 1.856-4(b)(5)(ii) of the regulations of
the United States Department of the Treasury.
"Discount Rate": With respect to any Class of Certificates,
the rate determined by the Trustee, in its good faith, to be the rate
(interpolated and rounded to the nearest one-thousandth of a percent, if
necessary) in the secondary market for United States Treasury securities with a
maturity equal to the then computed weighted average life (or in the case of
the Class A-CS1 and Class PS-1 Certificates, the weighted average life of the
interest payments) of such class (rounded to the nearest month), without taking
into account the related prepayment of principal.
"Disqualified Non-U.S. Person": With respect to a Class R or
Class LR Certificate, any Non-U.S. Person or agent thereof other than (i) a
Non-U.S. Person that holds the Class R or Class LR Certificate in connection
with the conduct of a trade or business within the United States and has
furnished the transferor and the Certificate Registrar with an effective IRS
Form 4224 or (ii) a Non-U.S. Person that has delivered to both the transferor
and the Certificate Registrar an opinion of a nationally recognized tax counsel
to the effect that the transfer of the Class R or Class LR Certificate to it is
in accordance with the requirements of the Code and the regulations promulgated
thereunder and that such transfer of the Class R or Class LR Certificate will
not be disregarded for federal income tax purposes.
"Disqualified Organization": Either (a) the United States, a
State or any political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than an
instrumentality that is a corporation if all of its activities are subject to
tax and a majority of its board of directors is not selected by any such
governmental unit), (b) a foreign government, International Organization or
agency or instrumentality of either of the foregoing, (c) an organization that
is exempt from tax imposed by Chapter 1 of the Code (including the tax imposed
by Code Section 511 on unrelated business taxable income) on any excess
inclusions (as defined in Code Section 860E(c)(1)) with respect to the Class R
or Class LR 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 the Upper-Tier REMIC or Lower-Tier REMIC to
be subject to tax or to fail to qualify as a REMIC at any time that the
Certificates are outstanding. The terms "United States," "State" and
"International Organization" shall have the meanings set forth in Code Section
7701 or successor provisions.
"Distribution Account": The trust account or accounts created
and maintained as a separate trust account or accounts by the Trustee pursuant
to Section 3.05(b), which shall be entitled "LaSalle National Bank, as Trustee,
in trust for Holders of Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, Series 1997-D4, Distribution Account" and which must
be an Eligible Account.
"Distribution Date": The 14th day of each month, or if such
14th day is not a Business Day, the Business Day immediately following such
14th day, commencing in April, 1997; provided, however, that in any month, the
Distribution Date will be no earlier than the third Business Day following the
11th day of such month; provided, further, that if the 11th day of any month is
not a Business Day, the Distribution Date will be the fourth Business Day
following the 11th day of such month.
"Distribution Date Statement": As defined in Section 4.02(a).
"Due Date": With respect to any Distribution Date and/or any
Mortgage Loan, as the case may be, the 11th day of the month (or in the case of
certain of the Mortgage Loans, if the 11th day is not a business day, as
defined in the related Loan Documents, either the next business day or the
first preceding business day) in which such Distribution Date occurs.
"Early Termination Notice Date": Any date as of which the
aggregate Stated Principal Balance of the Mortgage Loans is less than 1.0% of
the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date.
"Eligible Account": Either (i) (A) an account or accounts
maintained with a depository institution or trust company the short term
unsecured debt obligations or commercial paper of which are rated at least A-1
by S&P, P-1 by ▇▇▇▇▇'▇, D-1 by DCR and F-1+ by Fitch in the case of accounts in
which funds are held for 30 days or less (or, in the case of accounts in which
funds are held for more than 30 days, the long term unsecured debt obligations
of which are rated at least "AA" by Fitch, DCR and S&P and "Aaa" by ▇▇▇▇▇'▇) or
(B) as to which the Trustee has received written confirmation from each of the
Rating Agencies that holding funds in such account would not cause any Rating
Agency to qualify, withdraw or downgrade any of its ratings on the Certificates
or (ii) a segregated trust account or accounts maintained with a federal or
state chartered depository institution or trust company acting in its fiduciary
capacity which, in the case of a state chartered depository institution or
trust company is subject to regulations substantially similar to 12 C.F.R.
ss.9.10(b), having in either case a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal and state
authority, or (any other account that, as evidenced by a written confirmation
from each Rating Agency would not, in and of itself, cause a downgrade,
qualification or withdrawal of the then current ratings assigned to the
Certificates), which may be an account maintained with the Trustee or the
Servicer. Eligible Accounts may bear interest.
"Eligible Investor": Any of (i) a Qualified Institutional
Buyer that is purchasing 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 or (ii) an Institutional Accredited
Investor.
"Environmental Report": The environmental audit report or
reports with respect to each Mortgaged Property delivered to the Mortgage Loan
Seller in connection with the related Mortgage.
"ERISA": The Employee Retirement Income Security Act of 1974,
as it may be amended from time to time.
"Escrow Account": As defined in Section 3.04(b). Any Escrow
Account may be a sub-account of the related Cash Collateral Account.
"Escrow Payment": Any payment made by any Borrower to the
Servicer pursuant to the related Mortgage, Cash Collateral Agreement, Lock-Box
Agreement or Loan Agreement for the account of such Borrower for application
toward the payment of taxes, insurance premiums, assessments and similar items
in respect of the related Mortgaged Property.
"Euroclear": ▇▇▇▇▇▇ Guaranty Trust Company of New York,
Brussels Office, as operator of the Euroclear System, or its successor in such
capacity.
"Event of Default": A Servicer Event of Default or Special
Servicer Event of Default, as applicable.
"Excess Interest": With respect to each of the Mortgage Loans
indicated on the Mortgage Loan Schedule as having a Revised Rate, interest
accrued on such Mortgage Loan allocable to the Excess Rate. The Excess Interest
shall not be an asset of the Lower-Tier REMIC or the Upper-Tier REMIC formed
hereunder.
"Excess Interest Distribution Account": The trust account or
accounts created and maintained as a separate trust account or accounts by the
Trustee pursuant to Section 3.05(e), which shall be entitled "LaSalle National
Bank, as Trustee, in trust for Holders of Asset Securitization Corporation,
Commercial Mortgage Pass-Through Certificates, Series 1997-D4, Excess Interest
Distribution Account" and which must be an Eligible Account. The Excess
Interest Distribution Account shall not be an asset of the Lower-Tier REMIC or
the Upper-Tier REMIC formed hereunder.
"Excess Rate": With respect to each of the Mortgage Loans
indicated on the Mortgage Loan Schedule as having a Revised Rate, the excess of
(i) the applicable Revised Rate over (ii) the applicable Mortgage Rate, each as
set forth in the Mortgage Loan Schedule.
"Exchange Act": The Securities Exchange Act of 1934, as
amended.
"Exchange Act Report": A monthly Distribution Date Statement,
Comparative Financial Status Report, Delinquent Loan Status Report, Historical
Loss Estimate Report, Historical Loan Modification Report, REO Status Report,
Operating Statement Analysis, NOI Adjustment Worksheet, Watch List, or report
pursuant to Section 4.02(b)(i) or Annual Compliance Report to be filed with the
Commission, under cover of the related form required by the Exchange Act.
"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 Specially
Serviced Mortgage Loan or Mortgage Loan subject to repurchase by the Depositor
or the Mortgage Loan Seller pursuant to Sections 2.03(d) or 2.03(e), the
recovery of all Insurance Proceeds, Liquidation Proceeds, the related
Repurchase Price and other payments or recoveries (including proceeds of the
final sale of any REO Property) which the Servicer (or in the case of a
Specially Serviced Mortgage Loan, the Special Servicer), in its reasonable
judgment as evidenced by a certificate of a Servicing Officer delivered to the
Trustee and the Custodian (and the Servicer, if the Certificate is from the
Special Servicer), expects to be finally recoverable. The Servicer shall
maintain records, prepared by a Servicing Officer, of each Final Recovery
Determination until the earlier of (i) its termination as Servicer hereunder
and the transfer of such records to a successor servicer and (ii) five years
following the termination of the Trust Fund.
"Financial Market Publisher": Bloomberg Financial Service.
"Fiscal Agent": ABN AMRO Bank N.V., a Netherlands banking
corporation in its capacity as fiscal agent of the Trustee, or its successor in
interest, or any successor fiscal agent appointed as herein provided.
"Fitch": Fitch Investors Service, L.P., or its successor in
interest.
"Fixed Voting Rights": As defined in the definition of
"Voting Rights."
"Form 8-K": A Current Report on Form 8-K under the Exchange
Act, or such successor form as the Commission may specify from time to time.
"FNMA": The Federal National Mortgage Association, or any
successor thereto.
"Global Certificates": The Class A-1A, Class A-1B, Class
A-1C, Class A-1D, Class A-1E, Class A-CS1, Class PS-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5, and Class B-6 Certificates.
"Hazardous Materials": Any dangerous, toxic or hazardous
pollutants, chemicals, wastes, or substances, including, without limitation,
those so identified pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., or any other
environmental laws now existing, and specifically including, without
limitation, asbestos and asbestos-containing materials, polychlorinated
biphenyls ("PCBs"), 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.
"Historical Loan Modification Report": A report substantially
containing the content described in Exhibit I-3 attached hereto, setting forth,
among other things, those Mortgage Loans which, as of the close of business on
the Due Date immediately preceding the preparation of such report, have been
modified pursuant to this Agreement (i) during the related Collection Period
and (ii) since the Cut-off Date, showing the original and the revised terms
thereof.
"Historical Loss Estimate Report": A report substantially
containing the content described in Exhibit I-4 attached hereto, setting forth,
among other things, as of the close of business on the Due Date immediately
preceding the preparation of such report, (i) the aggregate amount of
Liquidation Proceeds and Liquidation Expenses, both for the current period and
historically, and (ii) the amount of Realized Losses occurring during the
related Collection Period, set forth on a Mortgage Loan-by-Mortgage Loan basis.
"Holder": With respect to any Certificate, a
Certificateholder; with respect to the Classes of Certificates comprising any
Unit, a Unitholder; with respect to any Lower-Tier Regular Interest, the
Trustee.
"Indemnified Party": As defined in Section 8.05(c).
"Independent": When used with respect to any specified
Person, any such Person who (i) does not have any direct financial interest, or
any material indirect financial interest, in any of the Depositor, the Trustee,
the Servicer, the Special Servicer, any Borrower or Manager or any Affiliate
thereof, and (ii) is not connected with any such Person thereof 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 neither the Servicer nor the Special Servicer shall be
considered to be an Independent Contractor under the definition in this clause
(i) unless an Opinion of Counsel (at the expense of the party seeking to be
deemed an Independent) addressed to the Servicer and the Trustee has been
delivered to the Trustee to that effect) or (ii) any other Person (including
the Servicer and the Special Servicer) if the Servicer, on behalf of itself and
the Trustee, has received an Opinion of Counsel (at the expense of the party
seeking to be deemed an Independent Contractor) to the effect that the taking
of any action in respect of any REO Property by such Person, subject to any
conditions therein specified, that is otherwise herein contemplated to be taken
by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
Section 860D(a) of the Code) or cause any income realized in respect of such
REO Property to fail to qualify as Rents from Real Property (provided that such
income would otherwise so qualify).
"Individual Certificate": Any Certificate in definitive,
fully registered physical form without interest coupons.
"Institutional Accredited Investor": An entity meeting the
requirements of Rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated
under the Act, or an entity in which all the equity owners meet such
requirements.
"Instructions": As defined in Section 3.30(d).
"Insurance Proceeds": Proceeds of any fire and hazard
insurance policy, title policy or other insurance policy relating to a Mortgage
Loan (including any amounts paid by the Servicer pursuant to Section 3.08).
"Interest Accrual Amount": With respect to any Distribution
Date and any Class of Certificates (other than the Class A-CS1, Class PS-1,
Class V-1, Class V-2, Class R and Class LR Certificates), an amount equal to
interest for the related Interest Accrual Period at the Pass-Through Rate for
such Class on the related Certificate Balance or Notional Balance, as
applicable (provided, that for interest accrual purposes any distributions in
reduction of Certificate Balance or reductions in Certificate Balance as a
result of allocations of Realized Losses on the Distribution Date occurring in
an Interest Accrual Period shall be deemed to have been made on the first day
of such Interest Accrual Period). The "Interest Accrual Amount" with respect to
any Distribution Date and the Class A-CS1 Certificates is equal to interest for
the related Interest Accrual Period at the Pass-Through Rate for such class for
such Interest Accrual Period on the Notional Balance of such class (provided,
that any reductions in the Notional Balance of such class as a result of
distributions in reduction of the Certificate Balance of the Class A-1A
Certificates or allocations of Realized Losses to the Certificate Balance of
the Class A-1A Certificates on the Distribution Date occurring in an Interest
Accrual Period, shall be deemed to have occurred on the first day of such
Interest Accrual Period). The "Interest Accrual Amount" with respect to any
Distribution Date and the Class PS-1 Certificates shall be equal to interest
for the related Interest Accrual Period at the Pass-Through Rate for such class
for such Interest Accrual Period on the Notional Balance of such class.
Calculations of interest due in respect of the Certificates shall be made on
the basis of a 360-day year consisting of twelve 30-day months. With respect to
any Lower-Tier Regular Interest and any Distribution Date, an amount equal to
interest for the related Interest Accrual Period at the Lower-Tier Pass-Through
Rate for such Interest Accrual Period on the Certificate Balance of such
Lower-Tier Regular Interest, provided that, for such purpose, (i) any
distributions in reduction of Certificate Balance on such Distribution Date and
(ii) reductions of Certificate Balance as a result of allocations of Realized
Losses on such Distribution Date shall be deemed to have been made as of the
first day of such Interest Accrual Period.
"Interest Accrual Period": With respect to any Distribution
Date, the period which commences on the eleventh day of the month preceding the
month in which such Distribution Date occurs and ends on the tenth day of the
month in which such Distribution Date occurs, provided that the Interest
Accrual Period with respect to the Distribution Date occurring in April 1997
shall be assumed to consist of 14 days. Interest for each Interest Accrual
Period, other than the Interest Accrual Period with respect to the Distribution
Date occurring in April 1997, is calculated based on a 360-day year consisting
of twelve 30-day months.
"Interest Reserve Account": The trust account created and
maintained by the Servicer pursuant to Section 3.27, which shall be entitled
"AMRESCO Management, Inc., in trust for LaSalle National Bank, as Trustee, in
trust for Holders of Asset Securitization Corporation, Commercial Mortgage
Pass-Through Certificates, Series 1997-D4, Interest Reserve Account" and which
must be an Eligible Account.
"Interest Reserve Loans": The Mortgage Loans identified as
the Saracen, ▇▇▇▇▇▇▇ Pacific, M&H, Lakeside and Ambassador loans on the
Mortgage Loan Schedule.
"Interest Shortfall": On any Distribution Date for any
Lower-Tier Regular Interest, any shortfall in the amount of interest required
to be distributed to such Lower-Tier Regular Interest on the Certificate
Balance or Component Balance thereof, as the case may be, on such Distribution
Date.
"Interested Person": As of any date of determination, the
Depositor, the Servicer, Special Servicer, the Trustee, the Fiscal Agent, any
Borrower, any manager of a Mortgaged Property, any Independent Contractor
engaged by the Special Servicer pursuant to Section 3.17, or any Person known
to a Responsible Officer of the Trustee to be an Affiliate of any of them.
"Investment Account": As defined in Section 3.07(a).
"Investment Representation Letter": As defined in Section
5.02(c)(i)(A).
"IRS": The Internal Revenue Service.
"Liquidation Expenses": Expenses incurred by the Servicer,
the Special Servicer and the Trustee 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
Protection Expenses incurred with respect to such Mortgage Loan or such
property including interest thereon at the Advance Rate 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
(or portion thereof) by exercise of the power of eminent domain or
condemnation, (ii) the liquidation of a Specially Serviced Mortgage Loan
through a trustee's sale, foreclosure sale or otherwise or (iii) a sale of a
Mortgage Loan or an REO Property in accordance with Section 3.18 or Section
9.01.
"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 Documents": With respect to any Mortgage Loan, the
documents executed or delivered in connection with the origination of such
Mortgage Loan or subsequently added to the related Mortgage File.
"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 Depositor or any sub-servicer for the Depositor, as set forth in the
Mortgage Loan Schedule.
"Lock-Box Account": With respect to any Mortgaged Property,
if applicable, any account created pursuant to any documents relating to a
Mortgage Loan to receive revenues therefrom. Any Lock-Box 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 terms and provisions of the related Mortgage Loan and Section 3.07, which
Person shall be taxed on all reinvestment income or gain thereon. The Servicer
shall be permitted to make withdrawals therefrom for deposit into the related
Cash Collateral Accounts.
"Lock-Box Agreement": With respect to any Mortgage Loan, the
lock-box agreement, if any, between the Originator or the Mortgage Loan Seller
and the Borrower, pursuant to which the related Lock-Box Account, if any, may
have been established.
"Lock-out Period" With respect to any Mortgage Loan, the
period of time specified in the related Loan Documents during which voluntary
prepayments by the related Borrower are prohibited.
"Lower Rate": As defined in the definition of Minimum
Defaulted Monthly Payment.
"Lower-Tier Pass-Through Rate": With respect to any
Distribution Date and any Class of Lower-Tier Regular Interests, a per annum
rate equal to the Weighted Average Net Mortgage Pass-Through Rate.
"Lower-Tier Regular Interests": The Class A-1A-L, Class
A-1B-L, Class A-1C-L, Class A-1D-L, Class A-1E-L, Class A-2-L, Class A-3-L,
Class A-4-L, Class A-5-L, Class A-6-L, Class A-7-L, Class A-8-L, Class B-1-L,
Class B-2-L, Class B-3-L, Class B-4-L, Class B-5-L, Class B-6-L, Class B-7-L
and Class B-7H-L Interests.
"Lower-Tier REMIC": A segregated asset pool within the Trust
Fund consisting of the Mortgage Loans (exclusive of Default Interest and Excess
Interest), collections thereon, any REO Property acquired in respect thereof
and amounts held from time to time in the Collection Account and the
Distribution Account.
"LTV": With respect to any Mortgage Loan and any date of
determination, the outstanding principal balance of such Mortgage Loan as of
such date divided by the appraised value of the Mortgaged Properties securing
such Mortgage Loan as evidenced by an Updated Appraisal obtained by the
Servicer or an update thereto.
"MAI": Member of the Appraisal Institute.
"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 Properties.
"Maturity Date": With respect to each Mortgage Loan, the
Maturity Date as set forth on the Mortgage Loan Schedule.
"Minimum Defaulted Monthly Payment": With respect to any
extension pursuant to Section 3.30(c) of a Mortgage Loan that is delinquent in
respect of its Balloon Payment, an amount equal to (a) the principal portion of
the Monthly Payment that would have been due on such Mortgage Loan on the
related Due Date based on the original amortization schedule thereof, or, if
there is no amortization schedule, the principal portion of the constant
Monthly Payment that would have been due (in each case calculated with interest
at the Mortgage Rate), assuming such Balloon Payment had not become due, after
giving effect to any modification, and (b) interest at the applicable Default
Rate; provided, however, that the Special Servicer may, in its discretion,
agree that the Minimum Defaulted Monthly Payments may include interest at a
rate lower than the related Default Rate (but in no event lower than the
related Mortgage Rate) (the "Lower Rate"); provided that if, after notice to
all Certificateholders, Holders of Certificates evidencing at least 66-2/3% of
the Voting Rights of each Class, (or, that in the event that the Special
Servicer is not the Servicer and the Servicer would not agree to the Lower
Rate, Certificateholders representing greater than (a) 50% of the aggregate
Voting Rights of all Certificateholders and (b) 66-2/3% of the aggregate Voting
Rights of all Certificateholders who respond to such notice within 30 Business
Days of the delivery of such notice), direct the Special Servicer not to agree
to permit payments to include interest at the Lower Rate, the Special Servicer
shall not agree to payments with interest at the Lower Rate, provided, further,
that, if the Minimum Defaulted Monthly Payment is to include interest at the
Lower Rate, the Special Servicer may agree that interest on such Mortgage Loan
accrues at the Lower Rate if, after notice to all Certificateholders, holders
of Certificates evidencing at least 66-2/3% of the Voting Rights of each Class
direct the Special Servicer that such Mortgage Loan shall accrue interest at
the related Default Rate, then such Mortgage Loan will continue to accrue
interest at the Default Rate thereof and the excess of interest accrued on such
Mortgage Loan over the amount included in the Minimum Defaulted Monthly
Payments (i.e., interest at the Lower Rate) shall be added to the outstanding
principal balance of such Mortgage Loan. Notwithstanding the foregoing, if the
Directing Holders have given Instructions to the Special Servicer to extend,
the Special Servicer shall be required to follow the Directing Holders'
Instructions with respect to interest so long as the Minimum Defaulted Monthly
Payment is at least equal to the Lower Rate.
"Monthly Payment": With respect to any Mortgage Loan (other
than any REO Mortgage Loan) and any Due Date, the scheduled monthly payment of
principal, if any, and interest at the Mortgage Rate, excluding any Balloon
Payment (but not excluding any constant Monthly Payment), which is payable by
the related Borrower on such Due Date under the related Note. With respect to
an REO Mortgage Loan, the monthly payment that would otherwise have been
payable on the related Due Date had the related Note not been discharged,
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 Services, Inc., or its successor
in interest.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first lien on or first priority ownership interest in a Mortgaged
Property securing a Note.
"Mortgage File": With respect to any Mortgage Loan, the
mortgage documents listed in Section 2.01(i) through (xv) pertaining to such
particular Mortgage Loan and any additional documents required to be added to
such Mortgage File pursuant to the express provisions of this Agreement.
"Mortgage Loan": Each of the mortgage loans transferred and
assigned to the Trustee pursuant to Section 2.01 and from time to time held in
the Trust Fund, the 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, Specially Serviced Mortgage Loan or
any Mortgage Loan that has been defeased in whole or in part.
"Mortgage Loan Purchase and Sale Agreement": The Mortgage
Loan Purchase and Sale Agreement dated as of the Cut-off Date, by and between
the Depositor and the Mortgage Loan Seller, a copy of which is attached hereto
as Exhibit H.
"Mortgage Loan Schedule": The list of Mortgage Loans included
in the Trust Fund as of the Closing Date being attached hereto as Exhibit B,
which list shall set forth the following information with respect to each
Mortgage Loan:
(a) the Loan Number;
(b) the property name, city and state where each
related Mortgaged Property is located;
(c) the Monthly Payment in effect as of the Cut-off Date;
(d) the Mortgage Rate;
(e) the Maturity Date;
(f) the Stated Principal Balance as of the Cut-off
Date and, as applicable, the allocation of such
balance to each related Mortgaged Property;
(g) the Originator of such Mortgage Loan; and
(h) whether the Mortgage Loan is an Actual/360
Mortgage Loan.
The Mortgage Loan Schedule shall also set forth the total of the amounts
described under clause (c) and (f) above for all of the Mortgage Loans. The
Mortgage Loan Schedule may also set forth, for selected Mortgage Loans, the net
operating income or debt service coverage ratio. The Mortgage Loan Schedule may
be in the form of more than one list, collectively setting forth all of the
information required.
"Mortgage Loan Seller": Nomura Asset Capital Corporation, a
Delaware corporation, and its successors in interest.
"Mortgage Pass-Through Rate": With respect to the Mortgage
Loans that provide for calculations of interest based on twelve months of 30
days each, the Mortgage Pass-Through Rate for any Interest Accrual Period is
equal to the Mortgage Rate thereof. The Mortgage Pass-Through Rate with respect
to the Actual/360 Mortgage Loans (other than the Mortgage Loans identified on
the Mortgage Loan Schedule as the Nassau Park II, Saracen, ▇▇▇▇▇▇▇ Pacific,
M&H, Lakeside and Ambassador loans) for any Interest Accrual Period, is equal
to the Mortgage Rate thereof multiplied by a fraction the numerator of which is
the actual number of days in such Interest Accrual Period and the denominator
of which is 30. The Mortgage Pass-Through Rate with respect to the Mortgage
Loan secured by Nassau Park II for any Interest Accrual Period is an annual
rate equal to (a) the Mortgage Rate of such Mortgage Loan, multiplied by a
fraction, the numerator of which is the actual number of days in such Interest
Accrual Period and the denominator of which is 30 plus (b) 0.05%. The Mortgage
Pass-Through Rate with respect to the Interest Reserve Loans for any
Distribution Date (a) relating to any Interest Accrual Period commencing in any
January, February, April, June, September and November and in any December
occurring in a year immediately preceding any year which is not a leap year, is
the Mortgage Rate thereof, and (b) relating to any Interest Accrual Period
commencing in any March, May, July, August and October and in any December
occurring in a year immediately preceding a year which is a leap year, is equal
to the Mortgage Rate thereof multiplied by a fraction the numerator of which is
the actual number of days in such Interest Accrual Period and the denominator
of which is 30. Notwithstanding the foregoing, the Mortgage Pass-Through Rate
with respect to each Mortgage Loan (other than the Mortgage Loan identified on
the Mortgage Loan Schedule as the Nassau Park II loan) for the first Interest
Accrual Period is the Mortgage Rate thereof and the Mortgage Pass-Through Rate
for the Mortgage Loan identified on the Mortgage Loan Schedule as the Nassau
Park II loan for the first Interest Accrual Period is the Mortgage Rate thereof
plus (i) 0.05%.
"Mortgage Rate": With respect to each Mortgage Loan and any
Interest Accrual Period, the annual rate, not including any Excess Rate, at
which interest accrues on such Mortgage Loan during such period (in the absence
of a default), as set forth on the Mortgage Loan Schedule. The Mortgage Rate
for purposes of calculating the Weighted Average Net Mortgage Pass-Through Rate
shall be the Mortgage Rate of such Mortgage Loan without taking into account
any reduction in the interest rate by a bankruptcy court pursuant to a plan of
reorganization or pursuant to any of its equitable powers or a reduction in
interest or principal due to a modification pursuant to Section 3.30 hereof.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of a fee simple estate,
and, with respect to certain Mortgage Loans, a leasehold estate or both a
leasehold estate and a fee simple estate, or a leasehold estate in a portion of
the property and a fee simple estate in the remainder, 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 Default Interest": As defined in Section 3.05(d).
"Net Income": With respect to any REO Property, all income
received in connection with such REO Property, less any operating expenses,
including, but not limited to, utilities, real estate taxes, property
management fees, insurance premiums, leasing commission fees, expenses for
maintenance and repairs and any other capital expenses directly related to such
REO Property and permitted to be incurred under this Agreement.
"Net Insurance Proceeds": Insurance Proceeds, 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 Mortgage or Note or other documents included in the
Mortgage File or in accordance with prudent and customary servicing practices.
"Net Liquidation Proceeds": The Liquidation Proceeds received
with respect to any Mortgage Loan net of the amount of (i) Liquidation Expenses
incurred with respect thereto and, (ii) with respect to proceeds received in
connection with the taking of a Mortgaged Property (or portion thereof) by the
power of eminent domain in condemnation, amounts required to be applied to the
restoration or repair of the related Mortgaged Property.
"Net Mortgage Pass-Through Rate": With respect to any
Mortgage Loan and any Distribution Date, the per annum rate equal to the
Mortgage Pass-Through Rate for such Mortgage Loan, minus the aggregate of the
applicable Servicing Fee Rate and Trustee Fee Rate.
"Net REO Proceeds": With respect to each REO Property, REO
Proceeds with respect to such REO Property net of any insurance premiums,
taxes, assessments and other costs and expenses permitted to be paid therefrom
pursuant to Section 3.17(b) of this Agreement.
"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.
"NOI Adjustment Worksheet": A report prepared by the Servicer
or the Special Servicer, as the case may be, substantially containing the
content described in Exhibit I-8 attached hereto, presenting the computations
made in accordance with the methodology described in said Exhibit I-8 to
"normalize" the full year net operating income and debt service coverage
numbers used in the other reports required by this Agreement, sent to the
Trustee with each annual operating statement for a Mortgaged Property pursuant
to Section 3.13(d).
"Nonrecoverable Advance": Any portion of an Advance proposed
to be made or previously made which has not been previously reimbursed to the
Servicer, the Special Servicer, the Trustee or the Fiscal Agent, as applicable,
and which, in the good faith business judgment of the Servicer, the Special
Servicer, the Trustee or the Fiscal Agent, as applicable, will not or, in the
case of a proposed Advance, would not be ultimately recoverable from late
payments, Insurance Proceeds, Liquidation Proceeds and other collections on or
in respect of the related Mortgage Loan. The judgment or determination by the
Servicer, the Special Servicer, the Trustee or the Fiscal Agent that it has
made a Nonrecoverable Advance or that any proposed Advance, if made, would
constitute a Nonrecoverable Advance shall be evidenced in the case of the
Servicer or Special Servicer, by a certificate of a Servicing Officer delivered
to the Trustee, the Fiscal Agent, the Depositor and, in the case of the Special
Servicer, to the Servicer, and in the case of the Trustee or the Fiscal Agent,
by a certificate of a Responsible Officer of the Trustee or Fiscal Agent, as
applicable, delivered to the Depositor (and the Trustee if the Certificate is
from the Fiscal Agent), which in each case sets forth such judgment or
determination and the procedures and considerations of the Servicer, Special
Servicer, Trustee or Fiscal Agent, as applicable, forming the basis of such
determination (including, but not limited to, information selected by the
Person making such judgment or determination in its good faith discretion, such
as related income and expense statements, rent rolls, occupancy status,
property inspections, Servicer, Special Servicer, Trustee or Fiscal Agent
inquiries, third party engineering and environmental reports, and an appraisal
conducted by an MAI appraiser in accordance with MAI standards or any Updated
Appraisal thereof conducted within the past 12 months; copies of such documents
to be included with the certificate of a Servicing Officer or a Responsible
Officer). Any determination of non-recoverability made by the Servicer may be
made without regard to any value determination made by the Special Servicer
other than pursuant to an Updated Appraisal. Notwithstanding the above, the
Trustee and the Fiscal Agent shall be entitled to rely upon any determination
by the Servicer that any Advance previously made is a Nonrecoverable Advance or
that any proposed Advance would, if made, constitute a Nonrecoverable Advance
(and with respect to a proposed P&I Advance, the Trustee and the Fiscal Agent,
as applicable, shall rely on the Servicer's determination that the Advance
would be a Nonrecoverable Advance if the Trustee or Fiscal Agent, as
applicable, determines that it does not have sufficient time to make such a
determination).
"Non-U.S. Person": A person that is not a citizen or resident
of the United States, a corporation, partnership, or other entity created or
organized in or under the laws of the United States or any political
subdivision thereof, an estate whose income is subject to United States federal
income tax regardless of its source, or a trust if (A) for taxable years
beginning after December 31, 1996 (or for taxable years ending after August 20,
1996, if the trustee has made an applicable election) a court within the United
States is able to exercise primary supervision over the administration of such
trust, and one or more United States fiduciaries have the authority to control
all substantial decisions of such trust, or (B) for all other taxable years,
such trust is subject to United States federal income tax regardless of the
source of its income.
"Note": With respect to any Mortgage Loan as of any date of
determination, the note or other evidence of indebtedness and/or agreements
evidencing the indebtedness of a Borrower under such Mortgage Loan, including
any amendments or modifications, or any renewal or substitution notes, as of
such date.
"Notice of Termination": Any of the notices given to the
Trustee by the Servicer or any Holder of a Class LR Certificate pursuant to
Section 9.01(c).
"Notional Amount" or "Notional Balance": With respect to each
of the Class PS-1 and Class A-CS1 Certificates, (a) on or prior to the
Distribution Date occurring in April 1997, a notional principal amount equal to
the aggregate initial Notional Balance of such Class, as specified in the
Preliminary Statement hereto, and (b)(i) in the case of the Class A-CS1
Certificates, as of any date of determination after the Distribution Date
occurring in April 1997, the Notional Balance of such Class on the Distribution
Date immediately prior to such date of determination, after distributions of
principal on the Class A-1A Certificates and allocations of Realized Losses on
such Class on such prior Distribution Date and (ii) in the case of the Class
PS-1 Certificate, as of any Distribution Date after April 1997 a notional
principal amount equal to the aggregate Stated Principal Balance of the
Mortgage Loans as of the first day of the related Interest Accrual Period.
"Officers' Certificate": A certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a Vice President
(however denominated) and by the Treasurer, the Secretary, one of the Assistant
Treasurers or Assistant Secretaries, any Trust Officer or other officer of the
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 or the
Servicer, as the case may be.
"Operating Statement Analysis": With respect to each Mortgage
Loan and REO Mortgage Property, a report substantially containing the content
described in Exhibit I-7 attached hereto.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be counsel for the Depositor, the Special Servicer or the
Servicer, as the case may be, acceptable to the Trustee, except that any
opinion of counsel relating to (a) qualification of the Upper-Tier REMIC or
Lower-Tier REMIC as a REMIC or the imposition of tax under the REMIC Provisions
on any income or property of either REMIC, (b) compliance with the REMIC
Provisions (including application of the definition of "Independent
Contractor") or (c) a resignation of the Servicer pursuant to Section 6.04,
must be an opinion of counsel who is Independent of the Depositor and the
Servicer.
"Originator": Any of (i) the Mortgage Loan Seller, and (ii)
Bloomfield Acceptance Company, LLC.
"Ownership Interest": Any record or beneficial interest in a
Class R or Class LR Certificate.
"P&I Advance": As to any Mortgage Loan, any advance made by
the Servicer, the Trustee, or the Fiscal Agent pursuant to Section 4.06. Each
reference to the payment or reimbursement of a P&I Advance shall be deemed to
include, whether or not specifically referred to and without duplication,
payment or reimbursement of interest thereon at the Advance Rate from and
including the date of the making of such P&I Advance through and including the
date of payment or reimbursement.
"Pass-Through Rate": With respect to each Class of
Certificates (other than the Class V-1, Class V-2, Class R and Class LR
Certificates) or Strip Component of a Class of Certificates, the Pass-Through
Rate for such Class or Strip Component are set forth below:
Class/Strip Component Pass-Through Rate
Class A-1A Class A-1A Pass-Through Rate
Class A-1B Class A-1B Pass-Through Rate
Class A-1C Class A-1C Pass-Through Rate
Class A-1D Class A-1D Pass-Through Rate
Class A-1E Class A-1E Pass-Through Rate
Class A-CS1 Class A-CS1 Pass-Through Rate
Class PS-1 Class PS-1 Pass-Through Rate
Class A-2 Class A-2 Pass-Through Rate
Class A-3 Class A-3 Pass-Through Rate
Class A-4 Class A-4 Pass-Through Rate
Class A-5 Class A-5 Pass-Through Rate
Class A-6 Class A-6 Pass-Through Rate
Class A-7 Class A-7 Pass-Through Rate
Class A-8 Class A-8 Pass-Through Rate
Class B-1 Class B-1 Pass-Through Rate
Class B-2 Class B-2 Pass-Through Rate
Class B-3 Class B-3 Pass-Through Rate
Class B-4 Class B-4 Pass Through Rate
Class B-5 Class B-5 Pass Through Rate
Class B-6 Class B-6 Pass Through Rate
Class B-7 Class B-7 Pass-Through Rate
Class B-7H Class B-7H Pass-Through Rate
"Paying Agent": The paying agent appointed pursuant to
Section 5.04.
"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 V-1, Class
V-2, Class R and Class LR Certificates), the percentage interest is equal to
the initial denomination of such Certificate divided by the initial Certificate
Balance or Notional Balance, as applicable, of such Class of Certificates. With
respect to any Class V-1, Class V-2, Class R or Class LR 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 upon which such funds are
required to be drawn, regardless of whether issued by the Depositor, the
Servicer, the Trustee or any of their respective Affiliates and having at all
times the required ratings, if any, provided for in this definition, unless
each Rating Agency shall have confirmed in writing to the Servicer that a lower
rating would not, in and of itself, result in a downgrade, qualification or
withdrawal of the then current ratings assigned to the Certificates:
(i) obligations of, or obligations fully guaranteed as to
payment of principal and interest by, the United States or
any agency or instrumentality thereof provided such
obligations are backed by the full faith and credit of the
United States of America including, without limitation,
obligations of: the U.S. Treasury (all direct or fully
guaranteed obligations), the Farmers Home Administration
(certificates of beneficial ownership), the General Services
Administration (participation certificates), the U.S.
Maritime Administration (guaranteed Title XI financing), the
Small Business Administration (guaranteed participation
certificates and guaranteed pool certificates), the U.S.
Department of Housing and Urban Development (local authority
bonds) and the Washington Metropolitan Area Transit Authority
(guaranteed transit bonds); provided, however, that the
investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that
cannot vary or change, (B) if rated by S&P, must not have an
"r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to
liquidation prior to their maturity;
(ii) Federal Housing Administration debentures;
(iii) obligations of the following United States government
sponsored agencies: Federal Home Loan Mortgage Corp. (debt
obligations), the Farm Credit System (consolidated systemwide
bonds and notes), the Federal Home Loan Banks (consolidated
debt obligations), the Federal National Mortgage Association
(debt obligations), the Student Loan Marketing Association
(debt obligations), the Financing Corp. (debt obligations),
and the Resolution Funding Corp. (debt obligations);
provided, however, that the investments described in this
clause must (A) have a predetermined fixed dollar of
principal due at maturity that cannot vary or change, (B) if
rated by S&P, must not have an "r" highlighter affixed to
their rating, (C) if such investments have a variable rate of
interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must
move proportionately with that index, and (D) such
investments must not be subject to liquidation prior to their
maturity;
(iv) federal funds, unsecured certificates of deposit, time
or similar deposits, bankers' acceptances and repurchase
agreements, with maturities of not more than 365 days, of any
bank, the short term obligations of which are rated in the
highest short term rating category by each Rating Agency (or,
if not rated by DCR, Moody's or Fitch, otherwise acceptable
to DCR, Moody's or Fitch, as applicable, as confirmed in
writing that such investment would not, in and of itself,
result in a downgrade, qualification or withdrawal of the
then current ratings assigned to the Certificates); provided,
however, that the investments described in this clause must
(A) have a predetermined fixed dollar of principal due at
maturity that cannot vary or change, (B) if rated by S&P,
must not have an "r" highlighter affixed to their rating, (C)
if such investments have a variable rate of interest, such
interest rate must be tied to a single interest rate index
plus a fixed spread (if any) and must move proportionately
with that index, and (D) such investments must not be subject
to liquidation prior to their maturity;
(v) fully Federal Deposit Insurance Corporation-insured
demand and time deposits in, or certificates of deposit of,
or bankers' acceptances issued by, any bank or trust company,
savings and loan association or savings bank, the short term
obligations of which are rated in the highest short term
rating category by each Rating Agency (or, if not rated by
DCR, Moody's or Fitch, otherwise acceptable to DCR, Moody's
or Fitch, as applicable, as confirmed in writing that such
investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current
ratings assigned to the Certificates); provided, however,
that the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that
cannot vary or change, (B) if rated by S&P, must not have an
"r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to
liquidation prior to their maturity;
(vi) debt obligations with maturities of not more than 365
days rated by each Rating Agency (or, if not rated by DCR,
Moody's or Fitch, otherwise acceptable to DCR, Moody's or
Fitch, as applicable, as confirmed in writing that such
investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current
ratings assigned to the Certificates) in its highest
long-term unsecured rating category; provided, however, that
the investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that
cannot vary or change, (B) if rated by S&P, must not have an
"r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to
liquidation prior to their maturity;
(vii) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable
on demand or on a specified date not more than one year after
the date of issuance thereof) with maturities of not more
than 365 days and that is rated by each Rating Agency (or, if
not rated by DCR, Moody's or Fitch, otherwise acceptable to
DCR, Moody's or Fitch, as applicable, as confirmed in writing
that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current
ratings assigned to the Certificates) in its highest
short-term unsecured debt rating; provided, however, that the
investments described in this clause must (A) have a
predetermined fixed dollar of principal due at maturity that
cannot vary or change, (B) if rated by S&P, must not have an
"r" highlighter affixed to their rating, (C) if such
investments have a variable rate of interest, such interest
rate must be tied to a single interest rate index plus a
fixed spread (if any) and must move proportionately with that
index, and (D) such investments must not be subject to
liquidation prior to their maturity;
(viii) the Federated Prime Obligation Money Market Fund (the
"Fund") so long as the Fund is rated by each Rating Agency in
its highest short-term unsecured debt ratings category (or,
if not rated by DCR, ▇▇▇▇▇'▇ or Fitch, otherwise acceptable
to DCR, ▇▇▇▇▇'▇ or Fitch, as applicable, as confirmed in
writing that such investment would not, in and of itself,
result in a downgrade, qualification or withdrawal of the
then current ratings assigned to the Certificates); and
(ix) any other demand, money market or time deposit, demand
obligation or any other obligation, security or investment,
provided that each Rating Agency has confirmed in writing to
the Servicer, Special Servicer or Trustee, as applicable,
that such investment would not, in and of itself, result in a
downgrade, qualification or withdrawal of the then current
ratings assigned to the Certificates;
provided, however, that, in the judgment of the Servicer, such instrument
continues to qualify as a "cash flow investment" pursuant to Code Section
860G(a)(6) earning a passive return in the nature of interest and that no
instrument or security shall be a Permitted Investment if (i) such instrument
or security evidences a right to receive only interest payments or (ii) the
right to receive principal and interest payments derived from the underlying
investment provides a yield to maturity in excess of 120% of the yield to
maturity at par of such underlying investment.
"Permitted Transferee": With respect to a Class R or Class LR
Certificate, any Person or agent thereof that is a Qualified Institutional
Buyer, an Affiliated Person or an Institutional Accredited Investor, other than
(a) a Disqualified Organization, (b) any other Person so 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 or Class LR Certificate to
such Person may cause the Upper-Tier REMIC or Lower-Tier REMIC to fail to
qualify as a REMIC at any time that the Certificates are outstanding, (c) a
Person that is a Disqualified Non-U.S. Person and (d) a Plan or any Person
investing the assets of a Plan.
"Person": Any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Plan": As defined in Section 5.02(k).
"Prepayment Assumption": The assumption that each Mortgage
Loan with an Anticipated Repayment Date prepays on such date and that each
other Mortgage Loan does not prepay prior to its respective Maturity Date.
"Prepayment Interest Shortfall": With respect to any
Distribution Date, the amount of any shortfall in collections of interest
(adjusted to the applicable Net Mortgage Pass-Through Rate plus the Trustee
Fee) resulting from a Principal Prepayment on such Mortgage Loan during the
related Collection Period and prior to the related Due Date other than
Prepayment Interest Shortfalls relating to any Specially Serviced Mortgage
Loan.
"Prepayment Premium": Payments received on a Mortgage Loan as
the result of a Principal Prepayment thereon, not otherwise due thereon in
respect of principal or interest, other than an amount paid in connection with
the release of the related Mortgaged Property through defeasance, which are
intended to compensate the holder of the related Note for prepayment.
"Principal Distribution Amount": For any Distribution Date
will be equal to the sum of:
(i) the principal component of all scheduled Monthly Payments
(other than Balloon Payments) due on the Mortgage Loans on or before the
related Due Date (if received or advanced);
(ii) the principal component of all Assumed Scheduled
Payments or Minimum Defaulted Monthly Payments, as applicable, due on or before
the related Due Date (if received or advanced) with respect to any Mortgage
Loan that is delinquent in respect of its Balloon Payment;
(iii) the Stated Principal Balance of each Mortgage Loan that
was, during the related Collection Period, repurchased from the Trust Fund in
connection with the breach of a representation or warranty pursuant to Section
2.03 or purchased from the Trust Fund pursuant to Section 9.01;
(iv) the portion of Unscheduled Payments allocable to
principal of any Mortgage Loan that was liquidated during the related
Collection Period;
(v) the principal component of all Balloon Payments and, to
the extent not included in the preceding clauses, any other principal payment
on any Mortgage Loan received on or after the Maturity Date thereof, to the
extent received during the related Collection Period;
(vi) to the extent not included in the preceding clauses
(iii) or (iv), all other Principal Prepayments received in the related
Collection Period; and
(vii) to the extent not included in the preceding clauses,
any other full or partial recoveries in respect of principal, including
Insurance Proceeds, Liquidation Proceeds and Net REO Proceeds received in the
related Collection Period (in the case of clauses (i) through (vii) net of any
reimbursement for related outstanding P&I Advances allocable to principal and
amounts received on a Mortgage Loan which represent recoveries in respect of
any Subordinate Class Advance Amount);
The principal component of the amounts set forth above shall be determined in
accordance with Section 1.02 hereof.
"Principal Prepayment": Any payment of principal made by the
Borrower on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not accompanied by an amount of interest representing the
full amount of scheduled interest due on any date or dates in any month or
months subsequent to the month of prepayment other than any amount paid in
connection with the release of the related Mortgaged Property through
defeasance.
"Property Advance": As to any Mortgage Loan, any advance made
by the Servicer, Special Servicer, the Trustee or the Fiscal Agent in respect
of Property Protection Expenses or any expenses incurred to protect, preserve
and enforce the security for a Mortgage Loan or taxes and assessments or
insurance premiums, pursuant to Section 3.04 or Section 3.24, as applicable.
Each reference to the payment or reimbursement of a Property Advance shall be
deemed to include, whether or not specifically referred to, payment or
reimbursement of interest thereon at the Advance Rate from and including the
date of the making of such Advance through and including the date of payment or
reimbursement.
"Property Protection Expenses": Any costs and expenses
incurred by the Servicer or the Special Servicer pursuant to Sections 3.04,
3.08, 3.10(b), 3.10(e), 3.10(f), 3.10(g), 3.10(h), 3.10(k), 3.17(b) and 3.18 or
indicated herein as being a cost or expense of the Trust Fund or the Lower-Tier
REMIC or Upper-Tier REMIC to be advanced by the Servicer or the Special
Servicer, as applicable.
"Prospectus": The Depositor's Prospectus Supplement dated
March 26, 1997 relating to the Class A-1A, Class A-1B, Class A-1C, Class A-1D,
Class A-CS1, Class PS-1, Class A-1E, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class A-7 and Class A-8 Certificates.
"Qualified Institutional Buyer": A qualified institutional
buyer within the meaning of Rule 144A.
"Qualified Insurer": As used in Section 3.08, (i) an
insurance company or security or bonding company qualified to write the related
insurance policy in the relevant jurisdiction which shall have a claims paying
ability of "AA" or better by S&P and Fitch (or, if such company is not rated by
Fitch, is rated at least A-1X by A.M. Best's Key Rating Guide) and "Baa3" or
better by ▇▇▇▇▇'▇ and "A" or better by DCR (or, if such company is not rated by
DCR, is rated at least in an equivalent category by at least two nationally
recognized statistical ratings organizations), (ii) in the case of public
liability insurance policies required to be maintained with respect to REO
Properties in accordance with Section 3.08(a), shall have a claims paying
ability of "A" or better by S&P and Fitch (or, if such company is not rated by
Fitch, is rated at least A-1X by A.M. Best's Key Rating Guide) and DCR (or, if
such company is not rated by DCR, is rated at least in an equivalent category
by at least two nationally recognized statistical ratings organizations) and
"Baa3" or better by ▇▇▇▇▇'▇ and (iii) in the case of the fidelity bond and the
errors and omissions insurance required to be maintained pursuant to Section
3.08(c), shall have a claims paying ability rated by each Rating Agency no
lower than two ratings categories (without regard to pluses or minuses or
numeric qualifications) lower than the highest rating of any outstanding Class
of Certificates from time to time (or if such company is not rated by DCR, is
rated at least in an equivalent category by at least two nationally recognized
statistical ratings organizations and, if such company is not rated by Fitch,
is rated at least A-VIII by A.M. Best's Key Rating Guide), but in no event
lower than "BBB" by S&P, Fitch and DCR and "Baa3" by ▇▇▇▇▇'▇, unless in any
such case each of the Rating Agencies has confirmed in writing that obtaining
the related insurance from an insurance company that is not rated by each of
the Rating Agencies (subject to the foregoing exceptions) or that has a lower
claims-paying ability than such requirements shall not result, in and of
itself, in a downgrade, qualification or withdrawal of the then current ratings
by such Rating Agency to any Class of Certificates.
"Qualified Mortgage": A Mortgage Loan that is a "qualified
mortgage" within the meaning of Code 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": April 14, 2029, the next
Distribution Date occurring two years after the latest Assumed Maturity Date of
any of the Mortgage Loans.
"Rating Agency": Any of DCR, Fitch, ▇▇▇▇▇'▇ or S&P.
References herein to the highest long-term unsecured debt rating category of a
Rating Agency shall mean "AAA" with respect to DCR, Fitch and S&P and "Aaa"
with respect to ▇▇▇▇▇'▇ and in the case of any other rating agency shall mean
such highest rating category or better without regard to any plus or minus or
numerical qualification.
"Real Property": Land or improvements thereon such as
buildings or other inherently permanent structures thereon (including items
that are structural components of the buildings or structures), in each such
case as such terms are used in the REMIC Provisions.
"Realized Loss": With respect to any Distribution Date shall
mean the amount, if any, by which the aggregate Certificate Balance of the
Certificates after giving effect to distributions made on such Distribution
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans as of
the Due Date in the month in which such Distribution Date occurs.
"Reassignment of Assignment of Leases, Rents and Profits": As
defined in Section 2.01(viii).
"Record Date": With respect to each Distribution Date, the
close of business on the tenth day of the month in which such Distribution Date
occurs or, if such day is not a Business Day, the preceding Business Day;
provided, however, that with respect to the first Distribution Date, for all
purposes other than receipt of the distribution pursuant to Section 4.01 on
such Distribution Date, the Record Date shall be the Closing Date.
"Reduction Interest Distribution Amount": For the Class PS-1
Certificates, with respect to any Distribution Date and each of clauses ninth,
thirteenth, seventeenth, twenty-first, twenty-fifth, twenty-ninth,
thirty-third, thirty-seventh, forty-first, forty-fifth, forty-ninth,
fifty-third, fifty-seventh and sixty-first of Section 4.01(b) shall be the
amount of interest accrued for the Interest Accrual Period at the applicable
Reduction Interest Pass-Through Rate for such Interest Accrual Period on the
aggregate amount of Appraisal Reduction Amounts and Delinquency Reduction
Amounts notionally allocated to the related classes referred to in subclause
(B) of each such clause as of such Distribution Date, pursuant to Section 4.01(
).
"Reduction Interest Pass-Through Rate": With respect to any
Distribution Date (i) when the Class B-6 Certificates are the most subordinate
class outstanding, the Weighted Average Net Mortgage Pass-Through Rate minus
7.525%, (ii) when the Class B-5 Certificates are the most subordinate class
outstanding, the Weighted Average Net Mortgage Pass-Through Rate minus 7.525%,
(iii) when the Class B-4 Certificates are the most subordinate class
outstanding, the Weighted Average Net Mortgage Pass-Through Rate minus 7.525%,
(iv) when the Class B-3 Certificates are the most subordinate class
outstanding, the Weighted Average Net Mortgage Pass-Through Rate minus 7.525%,
(v) when the Class B-2 Certificates are the most subordinate class outstanding,
the Weighted Average Net Mortgage Pass-Through Rate minus 7.525%, (vi) when the
Class B-1 Certificates are the most subordinate class outstanding, the Weighted
Average Net Mortgage Pass-Through Rate minus 7.525%, (vii) when the Class A-8
Certificates are the most subordinate class outstanding 0.59%, (viii) when the
Class A-7 Certificates are the most subordinate class outstanding 0.94%, (ix)
when the Class A-6 Certificates are the most subordinate class outstanding
0.99%, (x) when the Class A-5 Certificates are the most subordinate class
outstanding 1.08%, (xi) when the Class A-4 Certificates are the most
subordinate class outstanding, 1.13%, (xii) when the Class A-3 Certificates are
the most subordinate class outstanding, 1.16% and (xiii) when the Class A-2
Certificates are the most subordinate class outstanding 1.21%. When the Class
A-1E Certificates are the most subordinate class outstanding, the Weighted
Average Net Mortgage Pass-Through Rate minus 7.525%.
"Reduction Interest Shortfalls": With respect to any
Distribution Date and each of the clauses ninth, thirteenth, seventeenth,
twenty-first, twenty-fifth, twenty-ninth, thirty-third, thirty-seventh,
forty-first, forty-fifth, forty-ninth, fifty-third, fifty-seventh and
sixty-first of Section 4.01(b), any shortfall in the Reduction Interest
Distribution Amount required to be distributed to the Class PS-1 Certificates
pursuant to such clause on such Distribution Date.
"Regular Certificates": The Class A-1A, Class A-1B, Class
A-1C, Class A-1D, Class A-1E, Class A-CS1, Class PS-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5, Class B-6, Class B-7 and Class B-7H
Certificates.
"Regulation D": Regulation D under the Act.
"Regulation S": Regulation S under the Act.
"Regulation S Global Certificate": As defined in Section
5.01.
"Regulation S Investor": With respect to a transferee of an
interest in a Regulation S Global Certificate, a transferee that acquires such
interest pursuant to Regulation S.
"Regulation S Transfer Certificate": A certificate
substantially in the form of Exhibit G hereto.
"Related Certificate" and "Related Lower-Tier Regular
Interest": For any Class or Classes of Lower-Tier Regular Interests, the
related Class of Certificates set forth below and for any Class of Certificates
(other than the Class PS-1, Class A-CS1, Class V-1, Class V-2, Class R and
Class LR), the related Class or Classes of Lower-Tier Regular Interest set
forth below:
Related Lower-Tier
Related Certificate Regular Interest
Class A-1A Class A-1A-L Interest
Class A-1B Class A-1B-L Interest
Class A-1C Class A-1C-L Interest
Class A-1D Class A-1D-L Interest
Class A-1E Class A-1E-L Interest
Class A-2 Class A-2-L Interest
Class A-3 Class A-3-L Interest
Class A-4 Class A-4-L Interest
Class A-5 Class A-5-L Interest
Class A-6 Class A-6-L Interest
Class A-7 Class A-7-L Interest
Class A-8 Class A-8-L Interest
Class B-1 Class B-1-L Interest
Class B-2 Class B-2-L Interest
Class B-3 Class B-3-L Interest
Class B-4 Class B-4-L Interest
Class B-5 Class B-5-L Interest
Class B-6 Class B-6-L Interest
Class B-7 Class B-7-L Interest
Class B-7H Class B-7H-L Interest
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"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.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code, which
income, subject to the terms and conditions of that Section of the Code in its
present form, does not include:
(i) except as provided in Section 856(d)(4) or (6) of
the Code, any amount received or accrued, directly
or indirectly, with respect to such REO Property, if
the determination of such amount depends in whole or
in part on the income or profits derived by any
Person from such property (unless such amount is a
fixed percentage or percentages of receipts or sales
and otherwise constitutes Rents from Real Property);
(ii) any amount received or accrued, directly or
indirectly, from any Person if the Trust Fund owns
directly or indirectly (including by attribution) a
ten percent or greater interest in such Person
determined in accordance with Sections 856(d)(2)(B)
and (d)(5) of the Code;
(iii) any amount received or accrued, directly or
indirectly, with respect to such REO Property if any
Person Directly Operates such REO Property;
(iv) any amount charged for services that are not
customarily furnished in connection with the rental
of property to tenants in buildings of a similar
class in the same geographic market as such REO
Property within the meaning of Treasury Regulations
Section 1.856-4(b)(1) (whether or not such charges
are separately stated); and
(v) rent attributable to personal property unless such
personal property is leased under, or in connection
with, the lease of such REO Property and, for any
taxable year of the Trust Fund, such rent is no
greater than 15 percent of the total rent received
or accrued under, or in connection with, the lease.
"REO Account": As defined in Section 3.17(b).
"REO Mortgage Loan": Any Mortgage Loan as to which the
related Mortgaged Property has become an REO Property.
"REO Proceeds": With respect to any REO Property and the
related REO Mortgage Loan, all revenues received by the Special Servicer with
respect to such REO Property or REO Mortgage Loan which do not constitute
Liquidation Proceeds.
"REO Property": A Mortgaged Property title to which has been
acquired by the Special Servicer on behalf of the Trust Fund through
foreclosure, deed in lieu of foreclosure or otherwise.
"REO Status Report": A report substantially containing the
content described in Exhibit I-5 attached hereto, setting forth, among other
things, with respect to each REO Property that was included in the Trust Fund
as of the close of business on the Due Date immediately preceding the
preparation of such report, (i) the acquisition date of such REO Property, (ii)
the amount of income collected with respect to any REO Property net of related
expenses and other amounts, if any, received on such REO Property during the
related Collection Period and (iii) the value of the REO Property based on the
most recent appraisal or other valuation thereof available to the Special
Servicer as of such date of determination (including any prepared internally by
the Special Servicer).
"Repurchase Price": With respect to any Mortgage Loan to be
repurchased pursuant to Section 2.03(d), 2.03(e) or 9.01, or any Specially
Serviced Mortgage Loan or any REO Mortgage Loan to be sold or repurchased
pursuant to Section 3.18, an amount, calculated by the Servicer, equal to:
(i) the unpaid principal balance of such Mortgage Loan
as of the Due Date as to which a payment was last
made by the Borrower (less any Advances previously
made on account of principal); plus
(ii) unpaid accrued interest from the Due Date as to
which interest was last paid by the Borrower up to
the Due Date in the month following the month in
which the purchase or repurchase occurred at a rate
equal to the Mortgage Rate on the unpaid principal
balance of such Mortgage Loan (less any Advances
previously made on account of interest); plus
(iii) any unreimbursed Advances and unpaid Servicing Fees,
Trustee Fees and Special Servicing Compensation
allocable to such Mortgage Loan together with
interest thereon at the Advance Rate; plus
(iv) in the event that the Mortgage Loan is required to
be repurchased pursuant to Sections 2.03(d) or
2.03(e), expenses reasonably incurred or to be
incurred by the Servicer, the Special Servicer or
the Trustee in respect of the breach or defect
giving rise to the repurchase obligation, including
any expenses arising out of the enforcement of the
repurchase obligation.
"Request for Release": A request for a release signed by a
Servicing Officer, substantially in the form of Exhibit E hereto.
"Reserve Accounts": With respect to any Mortgage Loan,
reserve accounts, if any, established pursuant to the Mortgage or the Loan
Agreement and any Escrow Account. Any Reserve Account may be a sub-account of a
related Cash Collateral Account. 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 terms and
provisions of the related Mortgage Loan and Section 3.07, which Person shall be
taxed on all reinvestment income or gain thereon. The Servicer shall be
permitted to make withdrawals therefrom for deposit into the related Cash
Collateral Account, if applicable, or the Collection Account or for the
purposes set forth under the related Mortgage Loan.
"Responsible Officer": Any officer of the Asset-Backed Trust
Services Department of the Trustee or the Fiscal Agent (and, in the event that
the Trustee is the Certificate Registrar or the Paying Agent, 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
to whom such matter is referred because of such officer'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 whose name and
specimen signature appears on a list of corporate trust officers furnished to
the Servicer by the Trustee and the Fiscal Agent, as such list may from time to
time be amended.
"Revised Rate": With respect to the Mortgage Loans, the
increased interest rate after the Anticipated Repayment Date (in the absence of
a default) for each applicable Mortgage Loan, as calculated and as set forth in
the related Mortgage Loan.
"S&P": Standard & Poor's Ratings Services, or its successor
in interest.
"Scheduled Final Distribution Date": As to each Class of
Certificates, April 14, 2027, the next Distribution Date occurring after the
latest maturity date of any Mortgage Loan.
"Securities Legend": With respect to each Residual
Certificate or any Individual Certificate, the legend set forth in, and
substantially in the form of, Exhibit G hereto.
"Separation Date": With respect to any of the Class B-1,
Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates, the date
on which such Class is assigned a rating of "BBB" or higher by S&P or Fitch.
"Servicer": AMRESCO Management, Inc., a Texas corporation, or
its successor in interest, or any successor Servicer appointed as herein
provided.
"Servicer Event of Default": As defined in Section 7.01(a).
"Servicer Prepayment Interest Shortfall": With respect to any
Distribution Date, the amount of any shortfall in collections of interest
(adjusted to the applicable Net Mortgage Pass-Through Rate plus the Trustee Fee
Rate) resulting from a Principal Prepayment on a Mortgage Loan during the
related Collection Period and prior to the related Due Date, which Principal
Prepayment, pursuant to the terms of the related Mortgage Loan, was not
permitted to be made on any date other than a Due Date under such Mortgage
Loan, but was nonetheless accepted by the Servicer; provided, however, that the
aggregate amount of the Servicer Prepayment Interest Shortfall with respect to
any Interest Accrual Period shall not exceed the amount of the Servicing Fee
attributable to the Mortgage Loan being prepaid and the investment income
accruing on the related Principal Prepayment with respect to such Interest
Accrual Period.
"Servicer Remittance Date": With respect to any Distribution
Date, the Business Day preceding such Distribution Date.
"Servicer Remittance Report": A report prepared by the
Servicer and/or the Special Servicer in such media as may be agreed upon by the
Servicer, the Special 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 4.01 and to furnish statements to
Certificateholders pursuant to Section 4.02, including information on the
outstanding principal balances of each Mortgage Loan specified therein, and
containing such additional information as the Servicer, the Special Servicer
and the Trustee may from time to time agree.
"Servicer's Appraisal Estimate": As defined in the definition
of Appraisal Reduction Amount.
"Servicing Compensation": With respect to any Distribution
Date, the related Servicing Fee and any other fees, charges or other amounts
payable to the Servicer on such Distribution Date.
"Servicing Fee": With respect to each Mortgage Loan and for
any Distribution Date, an amount per Interest Accrual Period equal to the
product of (i) one-twelfth of the Servicing Fee Rate and (ii) the Stated
Principal Balance of such Mortgage Loan as of the Due Date (after giving effect
to all payments of principal on such Mortgage Loan on such Due Date) in the
month preceding the month in which such Distribution Date occurs.
"Servicing Fee Rate": A rate equal to 0.04625% per annum.
"Servicing Officer": Any officer or employee of the Servicer
or the Special Servicer, as applicable, 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 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 Servicer or the Special Servicer, as applicable, as such list
may from time to time be amended.
"Servicing Standard": With respect to the Servicer or Special
Servicer shall mean the servicing of the Mortgage Loans by the Servicer or
Special Servicer solely in the best interests of and for the benefit of all of
the Certificateholders (as determined by the Servicer or Special Servicer as
the case may be, in its reasonable judgment) and in accordance with applicable
law, the specific terms of the respective Mortgage Loans and this Agreement and
to the extent not inconsistent with the foregoing, in the same manner in which,
and with the same care, skill, prudence and diligence with which, it (i)
services and administers similar mortgage loans for other third-party
portfolios or (ii) administers mortgage loans for its own account, whichever
standard is higher, but in any case without regard to:
(i) any known relationship that the Servicer, the Special
Servicer, any subservicer or any Affiliate of the Servicer,
the Special Servicer or any subservicer may have with any
Borrower or any other parties to the Pooling and Servicing
Agreement;
(ii) the ownership of any Certificate by the Servicer, the
Special Servicer or any Affiliate of the Servicer or Special
Servicer, as applicable;
(iii) the Servicer's or Special Servicer's obligation to make
P&I Advances, Property Advances or to incur servicing
expenses with respect to the Mortgage Loans;
(iv) the Servicer's, Special Servicer's or any sub-servicer's
right to receive compensation for its services hereunder or
with respect to any particular transaction; or
(v) the ownership, or servicing or management for others, by
the Servicer, the Special Servicer or any sub-servicer, of
any other mortgage loans or properties.
"Similar Law": As defined in Section 5.02(k) hereof.
"Special Servicer": The Servicer, in such capacity, or any
successor Special Servicer appointed as provided in Section 3.25. In the event
that the Servicer is terminated or resigns as the Servicer hereunder, the
Servicer shall be terminated as the Special Servicer hereunder.
"Special Servicer Event of Default": As defined in Section
7.01(b).
"Special Servicing Compensation": With respect to any
Mortgage Loan, any of the Special Servicing Fee and Principal Recovery Fee
which shall be due to the Special Servicer.
"Special Servicing Fee": With respect to each Specially
Serviced Mortgage Loan and any Distribution Date, an amount per Special
Servicing Period equal to the product of (i) one-twelfth of the Special
Servicing Fee Rate and (ii) the Stated Principal Balance of such Specially
Serviced Mortgage Loan as of the Due Date (after giving effect to all payments
of principal on such Specially Serviced Mortgage Loan on such Due Date) in the
month preceding the month in which such Distribution Date occurs.
"Special Servicing Fee Rate": A rate equal to 0.50% per annum
(except that if the Special Servicer is, or is an Affiliate of, the Holder or
Holders of Certificates, representing greater than 50% of the Voting Rights of
the most subordinate Class of Certificates then outstanding, the Special
Servicer shall provide written notice thereof to the Servicer and the rate
shall equal 0.25% per annum).
"Special Servicing Period": Any Interest Accrual Period
during which a Mortgage Loan is at any time a Specially Serviced Mortgage Loan.
"Specially Serviced Mortgage Loan": Subject to Section 3.26,
any Mortgage Loan with respect to which:
(i) the related Borrower has not made two consecutive Monthly
Payments (and has not cured at least one such delinquency by
the next due date under the related Mortgage Loan);
(ii) the Servicer, the Trustee or the Fiscal Agent,
individually or collectively, have made four consecutive P&I
Advances (regardless of whether such P&I Advances have been
reimbursed);
(iii) the related Borrower has expressed to the Servicer an
inability to pay or a hardship in paying the Mortgage Loan in
accordance with its terms;
(iv) the Servicer has received notice that the Borrower has
become the subject of any bankruptcy, insolvency or similar
proceeding, admitted in writing the inability to pay its
debts as they come due or made an assignment for the benefit
of creditors;
(v) the Servicer has received notice of a foreclosure or
threatened foreclosure of any lien on the Mortgage Property
securing the Mortgage Loan;
(vi) a default of which (A) the Servicer has notice (other
than a failure by the Borrower to pay principal or interest)
and (B) which materially and adversely affects the interests
of the Certificateholders has occurred and remained
unremedied for the applicable grace period specified in the
Mortgage Loan (or, if no grace period is specified, 60 days);
provided, that a default requiring a Property Advance shall
be deemed to materially and adversely affect the interests of
the Certificateholders;
(vii) the Special Servicer proposes to commence foreclosure
or other workout arrangements;
(viii) the related Borrower has failed to make a Balloon
Payment as and when due; or
(ix) in the opinion of the Servicer (consistent with the
Servicing Standard) a default under a Mortgage Loan is
imminent and such Mortgage Loan deserves the attention of the
Special Servicer.
provided, however, that a Mortgage Loan will cease to be a Specially Serviced
Mortgage Loan:
(a) with respect to the circumstances described in
clause (i) or (ii) or (viii) above, when the
Borrower thereunder has brought the Mortgage Loan
current (or, with respect to the circumstances
described in clause (viii), pursuant to any work-out
implemented by the Special Servicer) and thereafter
made three consecutive full and timely Monthly
Payments (including pursuant to any workout of the
Mortgage Loan);
(b) with respect to the circumstances described in
clause (iii), (iv), (v) and (vii) above, when such
circumstances cease to exist in the good faith
judgment of the Servicer; or
(c) with respect to the circumstances described in
clause (vi) above, when such default is cured;
provided, further, that at that time no circumstance identified in clauses (i)
through (vii) above exists that would cause the Mortgage Loan to continue to be
characterized as a Specially Serviced Mortgage Loan.
"Spread Rate": The Spread Rate for each Class of Certificates
is as set forth below:
Class Spread Rate
Class A-CS1..................................... 2.5%
Class PS-1...................................... 2.1%
Class A-1A...................................... 0.44%
Class A-1B...................................... 0.56%
Class A-1C...................................... 0.59%
Class A-1D...................................... 0.66%
"Startup Day": The day designated as such pursuant to Section
2.06(a) hereof.
"Stated Principal Balance": With respect to any Mortgage
Loan, at any date of determination, an amount equal to (a) the principal
balance as of the Cut-off Date of such Mortgage Loan, minus (b) the sum of (i)
the principal portion of each Monthly Payment due on such Mortgage Loan after
the Cut-off Date up to such date of determination, if received from the
Borrower or advanced (including Subordinate Class Advance Amounts) by the
Servicer, Trustee, or Fiscal Agent, (ii) all voluntary and involuntary
principal prepayments and other unscheduled collections of principal received
with respect to such Mortgage Loan and (iii) any principal forgiven by the
Special Servicer or Interest Shortfalls resulting from reductions or deferrals
of interest resulting from modifications made pursuant to Section 3.30 hereof.
The Stated Principal Balance of a Mortgage Loan with respect to which title to
the related Mortgaged Property has been acquired by the Trust Fund is equal to
the principal balance thereof outstanding on the date on which such title is
acquired less any Net REO Proceeds allocated to principal on such Mortgage
Loan. The Stated Principal Balance of a Specially Serviced Mortgage Loan with
respect to which the Servicer or Special Servicer has made a Final Recovery
Determination is zero.
"Subordinate Class Advance Amount": As defined in Section
4.06(d).
"Successor Manager": As defined in Section 3.19(b) below.
"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 the Upper-Tier REMIC or Lower-Tier REMIC 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.
"Terminated Party": As defined in Section 7.01(c).
"Terminating Party": As defined in Section 7.01(c).
"Termination Date": The Distribution Date on which the Trust
Fund is terminated pursuant to Section 9.01.
"Transfer": Any direct or indirect transfer or other form of
assignment of any Ownership Interest in a Class R or Class LR Certificate.
"Transferee Affidavit": As defined in Section 5.02(l)(ii).
"Transferor Letter": As defined in Section 5.02(l)(ii).
"Trust Fund": The corpus of the trust created hereby and to
be administered hereunder, consisting of: (i) such Mortgage Loans as from time
to time are subject to this Agreement, together with the Mortgage Files
relating thereto; (ii) all scheduled or unscheduled payments on or collections
in respect of the Mortgage Loans due after the Cut-off Date; (iii) any REO
Property; (iv) all revenues received in respect of any REO Property; (v) the
Servicer's, the Special Servicer's and the Trustee's rights under the insurance
policies with respect to the 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; (vii) any indemnities or
guaranties given as additional security for any Mortgage Loans; (viii) all
assets deposited in the Lock-Box Accounts, Cash Collateral Accounts, Escrow
Accounts and Reserve Accounts (to the extent such assets are not assets of the
respective Borrowers), the Collection Account, the Distribution Account, the
Upper-Tier Distribution Account, the Excess Interest Distribution Account,
Interest Reserve Account and the Default Interest Distribution Account,
including reinvestment income; (ix) any environmental indemnity agreements
relating to the Mortgaged Properties; (x) the rights and remedies under the
Mortgage Loan Purchase and Sale Agreement and Bloomfield Purchase Agreement;
and (xi) the proceeds of any of the foregoing (other than any interest earned
on deposits in the Lock-Box Accounts, Cash Collateral Accounts, Escrow Accounts
and any Reserve Accounts, to the extent such interest belongs to the related
Borrower).
"Trust REMICs": The Lower-Tier REMIC and the Upper-Tier
REMIC.
"Trustee": LaSalle National Bank, a nationally chartered
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 and for any
Distribution Date, an amount per Interest Accrual Period equal to the product
of (i) one-twelfth of the Trustee Fee Rate multiplied by (ii) the Stated
Principal Balance of such Mortgage Loan as of the Due Date (after giving effect
to all payments of principal on such Mortgage Loan on such Due Date) in the
month preceding the month in which such Distribution Date occurs.
"Trustee Fee Rate": A rate equal to 0.00375% per annum.
"Underwriter": Bear, ▇▇▇▇▇▇▇ & Co. Inc. with respect to the
Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6
Certificates, and Nomura Securities International, Inc. with respect to all
Classes of Certificates.
"Unitholder": Any Certificateholder holding a beneficial
interest in the Classes of Certificates comprising the Units.
"Units": Units consisting of the Class B-1 Certificates, the
Class B-2 Certificates, the Class B-3 Certificates, the Class B-4 Certificates,
the Class B-5 Certificates and the Class B-6 Certificates, subject to any
separation as provided for in Section 5.01(j).
"Unscheduled Payments": With respect to a Mortgage Loan and a
Collection Period, all Net Liquidation Proceeds and Net Insurance Proceeds
payable under such Mortgage Loan, the Repurchase Price of any Mortgage Loan
that is repurchased or purchased pursuant to Sections 2.03(d), 2.03(e) or 9.01,
and any other payments under or with respect to such Mortgage Loan not
scheduled to be made, including Principal Prepayments received by the Servicer,
but excluding Prepayment Premiums, during such Collection Period.
"Updated Appraisal": An appraisal of a Mortgaged Property or
REO Property, as the case may be, conducted subsequent to any appraisal
performed on or prior to the Cut-off Date and in accordance with MAI standards,
the costs of which shall be paid as a Property Advance by the Servicer. Updated
Appraisals shall be conducted by an MAI appraiser selected by the Servicer
after consultation with the Special Servicer.
"Upper-Tier Distribution Account": The trust account or
accounts created and maintained as a separate trust account or accounts by the
Trustee pursuant to Section 3.05(c), which shall be entitled "LaSalle National
Bank, as Trustee, in trust for Holders of Asset Securitization Corporation,
Commercial Mortgage Pass-Through Certificates, Series 1997-D4, Upper-Tier
Distribution Account" and which must be an Eligible Account.
"Upper-Tier REMIC": A segregated asset pool within the Trust
Fund consisting of the Lower-Tier Regular Interests and amounts held from time
to time in the Upper-Tier Distribution Account.
"Voting Rights": 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 V-1,
Class V-2, Class R and Class LR Certificates, (b) 0.09% in the case of the
Class A-CS1 Certificates, 3.58% in the case of the Class PS-1 Certificates (the
sum of such percentages for each such Class outstanding is the "Fixed Voting
Rights Percentage"); provided that the Voting Rights of (i) the Class ACS-1
Certificates will be reduced to zero upon the reduction of the Notional Balance
of such class to zero, and (ii) the Class PS-1 Certificates will be reduced to
zero on the Distribution Date on which none of the A-1B, Class A-1C, Class
A-1D, Class A-1E, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 Certificates are outstanding, (c) in the case of any of the Class
A-1A, Class A-1B, Class A-1C, Class A-1D, Class A-1E, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5, Class B-6, Class B-7, and Class B-7H
Certificates, a percentage equal to the product of (i) 100% minus the Fixed
Voting Rights Percentage multiplied by (ii) a fraction, the numerator of which
is equal to the aggregate outstanding Certificate Balance of any such Class and
the denominator of which is equal to the aggregate outstanding Certificate
Balances of all Classes of Certificates. The Class A-CS1 and Class PS-1
Certificates shall not be entitled to vote with respect to proposed extensions
of a Specially Serviced Mortgage Loan. 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. Any
Certificateholder may transfer its Voting Rights without transferring its
ownership interest in the related Certificates provided that such
Certificateholder provides notice of such transfer to the Trustee prior to the
effectiveness of such transfer. The Fixed Voting Right Percentage of the Class
A-CS1 and Class PS-1 Certificates will be proportionally reduced upon the
allocation of Appraisal Reduction Amounts with respect to any component of such
Classes based on the amount of such reduction.
"Watch List": A report substantially containing the content
described in Exhibit I-6 attached hereto, setting forth, among other things,
any Mortgage Loan that is in jeopardy of becoming a Specially Serviced Mortgage
Loan.
"Weighted Average Net Mortgage Pass-Through Rate": With
respect to any Distribution Date, a per annum rate equal to the fraction
(expressed as a percentage) the numerator of which is the sum of the products
of (i) the Net Mortgage Pass-Through Rate of each Mortgage Loan and (ii) the
Stated Principal Balance of each Mortgage Loan and the denominator of which is
the sum of the Stated Principal Balances of each Mortgage Loan, as of the Due
Date occurring in the month preceding the month in which such Distribution Date
occurs.
"Weighted Average Pass-Through Rate": With respect to any
Interest Accrual Period, a fraction (expressed as a percentage), the numerator
of which is the sum of (i) the sum of the products of (A) the Pass-Through Rate
with respect to each class of Certificates having a Pass-Through Rate (other
than the Class PS-1 and Class A-CS1 Certificates) and (B) the Certificate
Balance of such Class as of the first day of such Interest Accrual Period and
(ii) the product of (A) the Pass-Through Rate on the Class A-CS1 Certificates
and (B) the Notional Balance of such class as of such date and the denominator
of which is the sum of the Certificate Balances of each class included in
clause (i)(A) above as of such date (provided in the case of clauses (i) and
(ii), any reductions in Certificate Balance as a result of distributions or
allocations of Realized Losses to such class, respectively, occurring in an
Interest Accrual Period shall be deemed to have been made on the first day of
such Interest Accrual Period).
"Withheld Amounts": As defined in Section 3.27(a).
SECTION 1.02. Certain Calculations.
Unless otherwise specified herein, the following provisions
shall apply:
(a) All calculations of interest with respect to the Mortgage
Loans (other than the Actual/360 Mortgage Loans) and of Advances provided for
herein shall be made on the basis of a 360-day year consisting of twelve 30-day
months. All calculations of interest with respect to the Actual/360 Mortgage
Loans and of Advances provided for herein shall be made as set forth in such
Mortgage Loans with respect to the calculation of the related Mortgage Rate.
(b) Any Mortgage Loan payment is deemed to be received on the
date such payment is actually received by the Servicer, or the Trustee;
provided, however, that for purposes of calculating distributions on the
Certificates, Principal Prepayments with respect to any Mortgage Loan are
deemed to be received on the date they are applied in accordance with Section
3.01(b) to reduce the outstanding principal balance of such Mortgage Loan on
which interest accrues.
(c) Any amounts received in respect of a Mortgage Loan as to
which a default has occurred and is continuing in excess of Monthly Payments
shall be applied to Default Interest and other amounts due on such Mortgage
Loan prior to the application to late fees.
SECTION 1.03. Certain Constructions.
For purposes of the definitions of "Minimum Defaulted Monthly
Payment", "Special Servicing Fee", Section 3.19, Section 3.12, Section 3.25,
Section 3.30 and Section 4.06(d), references to the most or next most
subordinate Class of Certificates (or Lower-Tier Regular Interests) outstanding
at any time shall mean the most or next most subordinate Class of Certificates
(or Lower-Tier Regular Interests) then outstanding as among the Class A-1A,
Class A-1B, Class A-1C, Class A-1D, Class A-CS1, Class PS-1, Class A-1E, Class
A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class
B-1, Class B-2, Class B-3, Class B-4, Class B-5, Class B-6, Class B-7 and Class
B-7H Certificates (and the Classes of Related Lower-Tier Regular Interests).
For such purposes, the Class B-7 and Class B-7H Certificates (and the Classes
of Related Lower-Tier Regular Interests) together shall be considered to be one
Class and the Class A-1A, Class A-1B, Class A-1C, Class A-1D, Class A-CS1 and
Class PS-1 Certificates (and the Classes of Related Lower-Tier Regular
Interests) collectively shall be considered to be one Class. For purposes of
this Agreement, each Class of Certificates other than the Class V-1, Class V-2,
Class LR and Class R Certificates shall be deemed to be outstanding only to the
extent its respective Certificate Balance has not been reduced to zero. For
purposes of this Agreement, the Class V-1 Certificates shall be deemed to be
outstanding so long as there are any Notes outstanding, the Class V-2
Certificates shall be deemed outstanding so long as there are any Notes
outstanding that provide for the payment of Excess Interest, the Class B-7H
Certificates and the Class B-7H-L Interest shall be deemed to be outstanding so
long as there are any Notes outstanding that provide for payments of Prepayment
Premiums in connection with voluntary or involuntary prepayments and the Class
R and Class LR Certificates shall be deemed to be outstanding so long as the
Trust Fund has not been terminated pursuant to Section 9.01. For purposes of
this Agreement, the Class A-CS1 and Class PS-1 Certificates shall be deemed to
be outstanding until their respective Notional Balances have been reduced to
zero.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01. Conveyance of Mortgage Loans;
Assignment of Mortgage Loan Purchase
and Sale Agreement.
The Depositor, concurrently with the execution and delivery
hereof, does hereby sell, transfer, assign, set over and otherwise convey to
the Trustee without recourse (except to the extent herein provided) all the
right, title and interest of the Depositor in and to the Mortgage Loans,
including all rights to payment in respect thereof, except as set forth below,
and any security interest thereunder (whether in real or personal property and
whether tangible or intangible) in favor of the Depositor, and all Reserve
Accounts, Lock-Box Accounts, Cash Collateral Accounts and all other assets
included or to be included in the Trust Fund for the benefit of the
Certificateholders. Such transfer and assignment includes all interest and
principal due on or with respect to the Mortgage Loans after the Cut-off Date.
In connection with such transfer and assignment, the Depositor shall make a
cash deposit to the Collection Account in an amount equal to the Cash Deposit.
The Depositor, concurrently with execution and delivery hereof, does also
hereby 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 and, in, to and under each Bloomfield Purchase Agreement as assignee
of the Mortgage Loan Seller's rights thereunder to the extent related to any
Mortgage Loan. The Servicer, Special Servicer or the Trustee shall notify the
Mortgage Loan Seller and the Depositor upon such party's becoming aware of any
breach of the representations and warranties contained in this Agreement or the
Mortgage Loan Purchase and Sale Agreement that gives rise to a cure or
repurchase obligation; provided, that the failure of the Servicer, the Special
Servicer or Trustee to give such notification shall not constitute a waiver of
any cure or repurchase obligation. The Depositor shall cause the Reserve
Accounts, Cash Collateral Accounts and Lock-Box Accounts to be transferred to
and held in the name of the Servicer on behalf of the Trustee as successor to
the Mortgage Loan Seller and the Originators.
In connection with such transfer and assignment, the
Depositor does hereby deliver to, and deposit with, the Custodian (on behalf of
the Trustee), with copies to the Servicer and the Special Servicer, the
following documents or instruments with respect to each Mortgage Loan so
assigned (provided, however, the documents specified in item (ix) shall be
delivered only to the Servicer):
(i) the original of the Note, endorsed without recourse to
the order of the Trustee in the following form: "Pay to the
order of LaSalle National Bank, as Trustee, without
recourse", or in blank, which Note and all endorsements
thereon shall, unless the Mortgage Loan was originated by the
Mortgage Loan Seller (as indicated on the Mortgage Loan
Schedule), show a complete chain of endorsement from the
Originator to the Trustee;
(ii) the original recorded Mortgage or counterpart thereof
showing the Originator as mortgagee or, if any such original
Mortgage has not been returned from the applicable public
recording office, a copy thereof certified to be a true and
complete copy of the original thereof submitted for
recording;
(iii) an executed Assignment of Mortgage in suitable form for
recordation in the jurisdiction in which the Mortgaged
Property is located to "LaSalle National Bank, as Trustee,
without recourse";
(iv) if the related security agreement is separate from the
Mortgage, the original executed version or counterpart
thereof of such security agreement and the assignment thereof
to Trustee;
(v) a copy of the UCC-1 financing statement, together with an
original executed UCC-2 or UCC-3 financing statement, in a
form suitable for filing, disclosing the assignment to the
Trustee of the security interest in the personal property (if
any) constituting security for repayment of the Mortgage
Loan;
(vi) the original of the Loan Agreement or counterpart
thereof relating to such Mortgage Loan, if any;
(vii) the original lender's title insurance policy (or the
original pro forma title insurance policy), together with any
endorsements thereto;
(viii) if any related Assignment of Leases, Rents and Profits
is separate from the Mortgage, the original executed version
or counterpart thereof, together with an executed
reassignment of such instrument to the Trustee (a
"Reassignment of Assignment of Leases, Rents and Profits") in
suitable form for recordation in the jurisdiction in which
the Mortgaged Property is located (which reassignment,
however, may be included in the Assignment of Mortgage and
need not be a separate instrument);
(ix) copies of the original Environmental Reports of the
Mortgaged Properties made in connection with origination of
the Mortgage Loans, if any;
(x) copies of the original Management Agreements, if any, for
the Mortgaged Property;
(xi) a copy of the related ground lease, as amended, for the
Mortgaged Property, if any;
(xii) if the related assignment of contracts is separate from
the Mortgage, the original executed version of such
assignment of contracts and the assignment thereof to the
Trustee;
(xiii) if any related Lock-Box Agreement or Cash Collateral
Agreement is separate from the Mortgage or Loan Agreement, a
copy thereof; with respect to the Reserve Accounts, Cash
Collateral Accounts and Lock-Box Accounts, if any, a copy of
the UCC-1 financing statements, if any, submitted for filing
with respect to the Mortgage Loan Seller's security interest
in the Reserve Accounts, Cash Collateral Accounts and
Lock-Box Accounts and all funds contained therein (and UCC-3
financing statements assigning such security interest to the
Trustee on behalf of the Certificateholders);
(xiv) any and all amendments, modifications and supplements
to, and waivers related to, any of the foregoing; and
(xv) any other written agreements related to the Mortgage
Loan.
On or promptly following the Closing Date, the Servicer
shall, to the extent possession thereof has been delivered to it, at the
expense of the Depositor, (1) record, (a) each Assignment of Mortgage referred
to in Section 2.01(iii) which has not yet been submitted for recording and (b)
each Reassignment of Assignment of Leases, Rents and Profits referred to in
Section 2.01(viii) (if not otherwise included in the related Assignment of
Mortgage) which has not yet been submitted for recordation; and (2) file, each
UCC-2 or UCC-3 financing statement referred to in Section 2.01(v) or (xiii)
which has not yet been submitted for filing. The Servicer shall upon delivery
promptly submit (and in no event later than five Business Days following the
receipt of the related documents in the case of clause 1(a) above and 60 days
following the Closing Date in the case of clauses 1(b) and 2 above) for
recording or filing, as the case may be, in the appropriate public recording
office, each such document. In the event that any such document is lost or
returned unrecorded because of a defect therein, the Servicer, at the expense
of the Depositor, shall use its best efforts to promptly prepare a substitute
document for signature by the Depositor, and thereafter the Servicer shall
cause each such document to be duly recorded. The Servicer shall, promptly upon
receipt of the original recorded copy (and in no event later than five Business
Days following such receipt) deliver such original to the Custodian.
Notwithstanding anything to the contrary contained in this Section 2.01, in
those instances where the public recording office retains the original
Mortgage, Assignment of Mortgage or Reassignment of Assignment of Leases, Rents
and Profits, if applicable, after any 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 Mortgage, 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 will promptly deliver to the Custodian the related original title
insurance policy upon receipt thereof. The Depositor shall promptly cause the
UCC-1's referred to in Section 2.01(v) to be filed in the applicable public
recording office and upon filing will promptly deliver to the Custodian the
related UCC-1, with evidence of filing thereon. The Depositor shall reimburse
the Servicer for all out-of-pocket expenses incurred and filing fees paid by
the Servicer in connection with its obligations under this paragraph. Copies of
recorded or filed Assignments, Reassignments, UCC-1's and UCC-3's shall be
delivered to the Trustee by the Depositor or Servicer, as applicable.
All original documents relating to the Mortgage Loans which
are not delivered to the Custodian are and shall be held by the Depositor, the
Trustee or the 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 Mortgage File, such
document shall be delivered promptly to the Custodian.
SECTION 2.02. Acceptance by Custodian and the Trustee.
If the Depositor cannot deliver any original or certified
recorded document described in Section 2.01 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 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 it 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 receipt thereof). 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 Mortgage File (to the extent the
documents constituting the 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. With the exception of any Notes listed by the
Trustee on an exception report and delivered to the Depositor on the Closing
Date, the Trustee hereby acknowledges the receipt of the Notes. The Trustee
agrees to review each Mortgage File within 45 days after the later of (a) the
Trustee's receipt of such Mortgage File or (b) execution and delivery of this
Agreement, to ascertain that all documents (other than documents referred to in
clause (ix) of Section 2.01 which shall be delivered to the Servicer) referred
to in Section 2.01 above (in the case of the documents referred to in Section
2.01(iv), (v), (vi), (vii) (in the case of any endorsement thereto), (viii) and
(x) through (xv), as identified to it in writing by the Depositor) and any
original recorded documents referred to in the first sentence of this Section
included in the delivery of a Mortgage File have been received, have been
executed, appear 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 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 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 by
providing a written report, setting forth for each affected Mortgage Loan, with
particularity, the nature of the defective or missing document. The Depositor
shall, or shall cause the Mortgage Loan Seller to, deliver an executed,
recorded or undamaged document, as applicable, or, if the failure to deliver
such document in such form has a material adverse effect on the security
provided by the related Mortgaged Property, the Depositor shall, or shall cause
the Mortgage Loan Seller to, repurchase the related Mortgage Loan in the manner
provided in Section 2.03. None of the Servicer, the Special Servicer and
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 Mortgage File noted on such a report or for any failure by the Depositor
to use its best efforts to deliver any such document.
In reviewing any Mortgage File pursuant to the preceding
paragraph or Section 2.01, the Servicer shall have no responsibility to cause
the Trustee to, and the Trustee will have no responsibility to, determine
whether any document or opinion is legal, valid, binding or enforceable,
whether the text of any assignment or endorsement is in proper or recordable
form (except, if applicable, to determine if 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 Illinois on
the date hereof) in Illinois and, except as otherwise specifically provided in
this Agreement, shall not remove such instruments from Illinois, as applicable,
unless it receives an Opinion of Counsel (obtained and delivered at the expense
of the Person requesting the removal of such instruments from 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 2.03. Representations and Warranties
of the Depositor.
(a) The Depositor hereby represents and warrants that:
(i) The Depositor is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware;
(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 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 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 certificate of
incorporation or bylaws, or any law or regulation to which
the Depositor is subject, or conflict with, result in a
breach of or constitute a default under (or an event which
with notice or lapse of time or both would constitute a
default under) any of the terms, conditions or provisions of
any agreement or instrument to which the Depositor is a party
or by which it is bound, or any order or decree applicable to
the Depositor, or result in the creation or imposition of any
lien on any of the Depositor's assets or property, which
would materially and adversely affect the ability of the
Depositor to carry out the transactions contemplated by this
Agreement. 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 certificate of incorporation of the Depositor
provides that the Depositor is permitted to engage in only
the following activities:
(A) to acquire, own, hold, sell, transfer, assign,
pledge, finance, refinance and otherwise deal with (I)
loans secured by first or second mortgages, deeds of
trust or similar liens on residential, including
single-family and multi-family, commercial or mixed
commercial and residential properties, shares issued by
private non-profit housing corporations, or manufactured
housing contracts, (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
described in clause (A)(I) and the participation
interests, securities and funding agreements described
in clause (A)(II), collectively, "Mortgage Loans"),
(III) receivables and loan obligations, whether secured
or unsecured, including, but not limited to, retail
automotive, truck or manufactured housing installment
sale contracts or loans or automotive, truck or
manufactured housing leases, consumer or commercial
loans or leases, credit card accounts, accounts
receivable, corporate receivables, trade receivables,
trade bills, boat and recreational vehicle loans,
computer or other equipment loans or leases, mobile home
loans and pads, construction equipment, dealer and floor
plan financing notes, insurance policy loans, medical
and health care receivables, municipal and other
governmental leases, short-term notes secured by a lien
on a small business or all or part of its assets, and
loans to lesser-developed countries, (IV) 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 receivables and loans described in clause
(A)(III) and the participation interests, securities and
funding agreements described in clause (A)(IV),
collectively, "Receivables");
(B) to authorize and issue one or more series (each, a
"Pass-Through Series") of pass-through securities
("Certificates") pursuant to pooling and servicing
agreements (each, a "Pooling and Servicing Agreement"),
each of which Pass-Through Series (I) represents an
ownership interest in Mortgage Loans or Receivables,
related property and/or collections in respect thereof
and (II) may be structured to contain one or more
classes of Certificates, each class having the
characteristics specified in the related Pooling and
Servicing Agreement, and to acquire, own, hold, sell,
transfer, assign, pledge, finance or refinance one or
more Certificates or classes of Certificates of any
Pass-Through Series;
(C) to establish one or more trusts ("Trusts") to issue,
acquire, own, and hold one or more series (each, a "Bond
Series") of debt obligations ("Bonds"), each issued
pursuant to an indenture ("Indenture"), each of which
bond series (I) is collateralized by Mortgage Loans,
receivables and any supplemental collateral (the
"Supplemental Collateral"; Mortgage Loans, Receivables
and Supplemental Collateral, collectively, the
"Collateral") and/or related property and/or collections
in respect thereof and (II) may be structured to contain
one or more classes of Bonds, each class having the
characteristics specified in the related Indenture, and
to acquire, own, hold, sell, transfer, assign, pledge,
finance or refinance one or more Bonds or classes of
Bonds of any Bond Series; provided, however, that the
Bonds of any Bond Series have been rated in one of the
two highest rating categories by one or more nationally
recognized statistical rating agencies and, provided
further, that the Bonds of any Bond Series other than
the initial Bond Series issued by a Trust have been
rated in the same or a higher rating category by the
nationally recognized statistical rating agency or
agencies that rated the initial Bond Series issued by
such Trust;
(D) to issue, acquire, assume, own, hold, sell,
transfer, assign, pledge and finance indebtedness that
(I) is subordinated to the Bonds; (II) is nonrecourse to
the Depositor and the related Trust other than to cash
flow on the Collateral securing a Bond Series issued by
the related Trust in excess of amounts necessary to pay
holders of Bonds ("Bondholders") of such Bond Series;
(III) does not constitute a claim against the Depositor
to the extent that funds are insufficient to pay such
indebtedness; and (IV) does not result in a lowering or
withdrawal of the rating or ratings then assigned to the
Bonds of any Bond Series issued by the Trust issuing
such subordinated indebtedness, as confirmed in writing
by the nationally recognized statistical rating agency
or agencies rating such Bond Series;
(E) (I) to establish one or more Trusts to engage in any
one or more of the activities described in (A) and (D)
above, each of which Trusts and any Trust formed to
engage in one or more of the activities described in (C)
above may deliver to the Depositor Certificates ("Trust
Certificates") representing the ownership interest in
the assets of such Trust, (II) to acquire, own, hold,
sell, transfer, assign, pledge, finance, and otherwise
deal with any or all of the Trust Certificates in any
Trust that it establishes and (III) to act as settlor or
depositor of such Trusts and to invest in or sell Trust
Certificates; and
(F) to engage in any other acts and activities and to
exercise any powers permitted to corporations under the
laws of the State of Delaware which are incidental to,
or connected with, the foregoing, and necessary,
suitable or convenient to accomplish any of the
foregoing;
Capitalized terms defined in this clause (v) shall apply only
to such clause.
(vi) There is no action, suit or proceeding pending 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; and
(vii) The Trustee, if not the owner of the related Mortgage
Loan, will have a valid and perfected security interest of
first priority in each of the Mortgage Loans and any proceeds
thereof.
(b) The Depositor hereby represents and warrants
with respect to each Mortgage Loan that:
(i) Immediately prior to the transfer and assignment to the
Trustee, the Note and the Mortgage were not subject to an
assignment or pledge, and the Depositor had good title to,
and was the sole owner of, the Mortgage Loan and had full
right to transfer and sell the Mortgage Loan to the Trustee
free and clear of any encumbrance, equity, lien, pledge,
charge, claim or security interest;
(ii) The Depositor is transferring such Mortgage Loan free
and clear of any and all liens, pledges, charges or security
interests of any nature encumbering such Mortgage Loan;
(iii) The related Assignment of Mortgage constitutes the
legal, valid and binding assignment of such 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 from the Depositor to the
Trustee;
(iv) No claims have been made by the Depositor under the
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;
(v) All of the representations and warranties of the Mortgage
Loan Seller contained in the Mortgage Loan Purchase and Sale
Agreement are true and correct as of the Cut-off Date;
(vi) (1) Such Mortgage Loan is directly secured by a Mortgage
on Real Property, and (2) either (i) substantially all of the
proceeds of such Mortgage Loan were used to acquire or
improve or protect an interest in real property that, at the
origination date, was the only security for the Mortgage Loan
(in the case of a Mortgage Loan that has not been modified in
a manner that constituted a deemed exchange under Section
1001 of the Code at a time when the Mortgage Loan was not in
default or default with respect thereto was not reasonably
foreseeable) or (ii) the fair market value of such real
property was at least equal to 80% of the principal amount of
the Mortgage Loan (a) at origination (or, if the Mortgage
Loan has been modified in a manner that constituted a deemed
exchange under Section 1001 of the Code at a time when the
Mortgage Loan was not in default or default with respect
thereto was not reasonably foreseeable, the date of the last
such modification) or (b) at the Closing Date; provided that
for purposes of this clause (ii) the fair market value of the
real property interest must first be reduced by (A) the
amount of any lien on the real property interest that is
senior to the Mortgage Loan (unless such senior lien also
secures a Mortgage Loan, in which event the computation
described in (a) and (b) of this clause (ii) shall be made on
an aggregate basis) and (B) a proportionate amount of any
lien that is in parity with the Mortgage Loan (unless such
other lien secures a Mortgage Loan that is
cross-collateralized with such Mortgage Loan, in which event
the computation described in (a) and (b) of this clause (ii)
shall be made on an aggregate basis); and
(vii) The information set forth with respect to such Mortgage
Loan on the Mortgage Loan Schedule is true and correct in all
material respects as of the dates respecting which such
information is given, or if no date is specified, as of the
Cut-off Date.
(c) It is understood and agreed that the representations and
warranties set forth in this Section 2.03 shall survive delivery of the
respective Mortgage Files to the Trustee until the termination of this
Agreement, and shall inure to the benefit of the Certificateholders and the
Servicer.
(d) Upon discovery by the Custodian, the Servicer, the
Special Servicer or the Trustee of a breach of the representation and warranty
set forth in Section 2.03(b)(vi) or that any Mortgage Loan otherwise fails to
constitute a Qualified Mortgage, such Person shall give prompt notice thereof
to the Depositor and the Depositor shall correct such condition or repurchase
or cause the Mortgage Loan Seller to repurchase such Mortgage Loan at the
Repurchase Price within 90 days of discovery of such failure; it being
understood and agreed that none of such Persons has an obligation to conduct
any investigation with respect to such matters. It is understood and agreed
that the obligations of the Depositor set forth in this Section 2.03(d) to cure
or repurchase a Mortgage Loan which fails to constitute a Qualified Mortgage
shall be the sole remedies available to the Trustee against the Depositor
respecting, a breach of a representation or warranty set forth in Section
2.03(b)(vi).
(e) Upon discovery by the Custodian, the Servicer, the
Special Servicer or the Trustee of a breach of any representation or warranty
of the Mortgage Loan Seller in the Mortgage Loan Purchase and Sale Agreement
with respect to any Mortgage Loan, or that any document required to be included
in the Mortgage File does not conform to the requirements of Section 2.01, such
Person shall give prompt notice thereof to the Mortgage Loan Seller and the
Mortgage Loan Seller shall, to the extent the Mortgage Loan Seller is obligated
to cure or repurchase the related Mortgage Loan under the terms of the Mortgage
Loan Purchase and Sale Agreement, either cure such breach or repurchase said
Mortgage Loan at the Repurchase Price within 90 days of the receipt of notice
of the breach as provided in the Mortgage Loan Purchase and Sale Agreement; it
being understood and agreed that none of the Custodian, the Servicer, the
Special Servicer, and the Trustee has an obligation to conduct any
investigation with respect to such matters (except, in the case of the Mortgage
Files, to the extent provided in Section 2.01); provided, however, that in the
event that such breach is capable of being cured as determined by the Servicer
or the Special Servicer, as applicable, but not within such 90 day period and
the Mortgage Loan Seller has commenced and is diligently proceeding with the
cure of such breach within such 90 day period (other than a breach that is also
a breach of Section 2.03(b)(vi) or 2.03(d)), the Mortgage Loan Seller shall
have an additional 90 days to complete such cure; provided, further, that with
respect to such additional 90 day period the Mortgage Loan Seller shall have
delivered an officer's certificate to the Trustee and the Servicer setting
forth the reason such breach is not capable of being cured within the initial
90 day period and what actions the Mortgage Loan Seller is pursuing in
connection with the cure thereof and stating that the Mortgage Loan Seller
anticipates that such breach will be cured within the additional 90 day period;
and, provided, further, that in the event the Mortgage Loan Seller fails to
cure such breach within such additional 90-day period, the Repurchase Price
shall include interest on any Advances made in respect of the related Mortgage
Loan during such period.
(f) Upon receipt by the Servicer from the Depositor or
Mortgage Loan Seller of the Repurchase Price for the repurchased Mortgage Loan,
the Servicer shall deposit such amount in the Collection Account, and the
Trustee, pursuant to Section 3.11, shall, upon receipt of a certificate of a
Servicing Officer certifying as to the receipt by the Servicer of the
Repurchase Price and the deposit of the Repurchase Price into the Collection
Account pursuant to this Section 2.03(f), release or cause to be released to
the Depositor or the Mortgage Loan Seller the related 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
Servicer to vest in the Depositor or 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 it related to such Mortgage Loan
that was initially transferred to the Trust Fund under Section 2.01, and if
applicable any rights of the Mortgage Loan Seller or Depositor in, to and under
the related Bloomfield Purchase Agreement as it related to such Mortgage Loan
that were initially transferred to the Trust Fund under Section 2.01, and the
Trustee and the Servicer shall have no further responsibility with regard to
such Mortgage File.
(g) 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 2.03(e) which also constitutes a default under the related
Mortgage Loan, the Mortgage Loan Seller shall have a right, subrogated to that
of the Trustee, as successor to the mortgagee, to recover the amount of such
expenses from the related Borrower. The Servicer shall use reasonable efforts
in recovering, or assisting the Mortgage Loan Seller in recovering, from the
related Borrower the amount of any such expenses.
(h) In the event that any litigation is commenced which
alleges facts which, in the judgment of the Depositor, could constitute a
breach of any of the Depositor's representations and warranties relating to the
Mortgage Loans, the Depositor hereby reserves the right to conduct the defense
of such litigation at its expense.
(i) If for any reason the Mortgage Loan Seller or the
Depositor fails to fulfill its obligations under this Section 2.03 with respect
to any Mortgage Loan, the Servicer shall use reasonable efforts in enforcing
any obligation of the Originator to cure or repurchase such Mortgage Loan under
the terms of the related Bloomfield Purchase Agreement.
SECTION 2.04. Representations, Warranties and Covenants
of the Servicer, Special Servicer and
Trustee
(a) The Servicer, as Servicer, and if it is also the Special
Servicer, as the Special Servicer, hereby represents, warrants and covenants
that as of the Closing Date or as of such date specifically provided herein:
(i) The Servicer is a corporation, duly organized, validly
existing and in good standing under the laws of the State of
Texas 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 is located to the
extent necessary to comply with its duties and
responsibilities hereunder with respect to each Mortgage Loan
in accordance with the terms of this Agreement;
(ii) The Servicer has the full corporate power, authority and
legal right to execute and deliver this Agreement and to
perform in accordance herewith; the execution and delivery of
this Agreement by the Servicer and its performance and
compliance with the terms of this Agreement will not violate
the Servicer's charter or by-laws or constitute a default (or
an event which, with notice or lapse of time, or both, would
constitute a default) under, or result in the breach of, any
material contract, agreement or other instrument to which the
Servicer is a party or which may be applicable to the
Servicer or any of its assets;
(iii) This Agreement has been duly and validly authorized,
executed and delivered by the Servicer and, assuming due
authorization, execution and delivery by the other parties
hereto, constitutes a legal, valid and binding obligation of
the 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), and all requisite corporate action has been taken by
the Servicer to make this Agreement and all agreements
contemplated hereby valid and binding upon the Servicer in
accordance with their terms;
(iv) The Servicer is not in violation of, and the execution
and delivery of this Agreement by the 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 binding on the Servicer or any order or
regulation of any federal, state, municipal or governmental
agency having jurisdiction, or result in the creation or
imposition of any lien, charge or encumbrance which, in any
such event, would have consequences that would materially and
adversely affect the condition (financial or otherwise) or
operation of the Servicer or its properties or impair the
ability of the Trust Fund to realize on the Mortgage Loans;
(v) There is no action, suit, proceeding or investigation
pending or threatened against the Servicer which, either in
any one instance or in the aggregate, would result in any
material adverse change in the business, operations,
financial condition, properties or assets of the Servicer, or
in any material impairment of the right, or would, if
adversely determined, materially impair the ability of the
Servicer, to carry on its business substantially as now
conducted, or in any material liability on the part of the
Servicer, 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
Servicer contemplated herein, or which would be likely to
impair materially the ability of the Servicer to perform
under the terms of this Agreement; 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 Servicer of or compliance by
the Servicer with this Agreement, or if required, such
approval has been obtained prior to the Cut-off Date.
(b) It is understood and agreed that the representations and
warranties set forth in this Section shall survive delivery of the respective
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, the Depositor and the Servicer or Special Servicer, as the case may
be. Upon discovery by the Depositor, the Servicer, 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 Servicer, Special Servicer or the Trustee in any
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties hereto and the Mortgage Loan Seller.
(c) The Trustee hereby represents and warrants that
as of the Closing Date:
(i) The Trustee is a nationally chartered bank duly
organized, validly existing, and in good standing under the
laws of the United States and has full power, authority and
legal right to own its properties and conduct its business as
presently conducted and to execute, deliver and perform the
terms of this Agreement.
(ii) This Agreement has been duly authorized, executed and
delivered by the Trustee and, assuming due authorization,
execution and delivery by the other parties hereto,
constitutes a legal, valid and binding instrument enforceable
against the Trustee in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights in general and by general
equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(iii) Neither the execution and delivery of this Agreement by
the Trustee nor the consummation by the Trustee of the
transactions herein contemplated to be performed by the
Trustee, nor compliance by the Trustee with the provisions
hereof, will conflict with or result in a breach of, or
constitute a default under, any of the provisions of any
applicable law (subject to the appointment in accordance with
such applicable law of any co-trustee or separate trustee
required pursuant to this Agreement), governmental rule,
regulation, judgment, decree or order binding on the Trustee
or its properties or the organizational documents of the
Trustee or the terms of any material agreement, instrument or
indenture to which the Trustee is a party or by which it is
bound.
SECTION 2.05. Execution and Delivery of Certificates;
Issuance of Lower-Tier Regular Interests.
The Trustee acknowledges the assignment to it of the Mortgage
Loans and the delivery of the Mortgage Files to the Custodian (to the extent
the documents constituting the Mortgage Files are actually delivered to the
Custodian), subject to the provisions of Section 2.01 and Section 2.02 and,
concurrently with such delivery, (i) acknowledges the issuance of and hereby
declares that it holds the Lower-Tier Regular Interests on behalf of the
Upper-Tier REMIC and the Holders of the Regular Certificates and the Class R
Certificates and (ii) has caused to be executed and caused to be authenticated
and delivered to or upon the order of the Depositor, or as directed by the
terms of this Agreement, Class A-1A, Class ▇-▇▇, ▇▇▇▇▇ ▇- ▇▇, Class A-1D, Class
A-CS1, Class PS-1, Class A-1E, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6, Class A-7, Class A-8, Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5, Class B-6, Class B-7, Class B-7H, Class V-1, Class V-2, Class R and
Class LR Certificates in authorized denominations, in each case registered in
the names set forth in such order or so directed in this Agreement and duly
authenticated by the Authenticating Agent, which Certificates (described in the
preceding clause (ii)) and Lower Tier Regular Interests evidence ownership of
the entire Trust Fund.
SECTION 2.06. Miscellaneous REMIC and Grantor
Trust Provisions.
(a) The Class A-1A-L, Class A-1B-L, Class A-1C-L, Class
A-1D-L, Class A-1E-L, Class A-2-L, Class A-3-L, Class A-4-L, Class A-5-L, Class
A-6-L, Class A-7-L, Class A-8-L, Class B-1-L, Class B-2-L, Class B-3-L, Class
B-4-L, Class B-5-L, Class B-6-L, Class B-7-L and Class B-7H-L Interests are
hereby designated as "regular interests" in the Lower-Tier REMIC within the
meaning of Section 860G(a)(1) of the Code, and the Class LR Certificates are
hereby designated as the sole Class of "residual interests" in the Lower-Tier
REMIC within the meaning of Section 860G(a)(2) of the Code. The Class A-1A,
Class A-1B, Class A-1C, Class A-1D, Class A-1E, Class A-CS1, Class PS-1, Class
A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class
B-1, Class B-2, Class B-3, Class B-4, Class B-5, Class B-6, Class B-7 and Class
B-7H Certificates are hereby designated as "regular interests" in the
Upper-Tier REMIC within the meaning of Section 860G(a)(1) of the Code and the
Class R Certificates are hereby designated as the sole Class of "residual
interests" in the Upper-Tier REMIC within the meaning of Section 860G(a)(2) of
the Code. The Closing Date is hereby designated as the "Startup Day" of the
Lower-Tier REMIC and the Upper-Tier REMIC within the meaning of Section
860G(a)(9) of the Code. The "latest possible maturity date" of the Lower-Tier
Regular Interests and the Regular Certificates for purposes of Section
860G(a)(1) of the Code is the Scheduled Final Distribution Date. The initial
Certificate Balance of each Class of the Lower-Tier Regular Interests is equal
to the Certificate Balance of the Related Certificates. The rate of interest
for each Class of Lower-Tier Regular Interests is a per annum rate equal to the
Weighted Average Net Mortgage Pass-Through Rate.
(b) The Class V-1 Certificates represent pro rata undivided
beneficial interests in the Default Interest subject to the liability of the
Trust Fund to pay interest on Advances at the Advance Rate. The Class V-2
Certificates represent beneficial pro rata undivided interests in the Excess
Interest. The Class V-1 and Class V-2 Certificates do not represent regular or
residual interests in either the Upper-Tier REMIC or the Lower-Tier REMIC.
(c) None of the Depositor, the Trustee, the Servicer, the
Fiscal Agent or the Special 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.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
SECTION 3.01. Servicer to Act as Servicer; Administration
of the Mortgage Loans.
(a) The Servicer and the Special Servicer, each as an
independent contractor servicer, shall service and administer the Mortgage
Loans on behalf of the Trust Fund and the Trustee (as trustee for
Certificateholders) in accordance with the Servicing Standard.
The Servicer's or Special Servicer's liability for actions
and omissions in its capacity as Servicer or Special Servicer, as the case may
be, hereunder is limited as provided herein (including, without limitation,
pursuant to Section 6.03 hereof). To the extent consistent with the foregoing
and subject to any express limitations set forth in this Agreement, the
Servicer and Special Servicer shall seek to maximize the timely and complete
recovery of principal and interest on the Notes; provided, however, that
nothing herein contained shall be construed as an express or implied guarantee
by the Servicer or Special Servicer of the collectability of the Mortgage
Loans. Subject only to the Servicing Standard, the Servicer and Special
Servicer shall have full power and authority, acting alone or through
sub-servicers (subject to paragraph (c) of this Section 3.01 and to Section
3.02), to do or cause to be done any and all things in connection with such
servicing and administration which it may deem consistent with the Servicing
Standard and, in its reasonable judgment, in the best interests of the
Certificateholders, including, without limitation, with respect to each
Mortgage Loan, to prepare, execute and deliver, on behalf of the
Certificateholders and the Trustee or any of them: (i) any and all financing
statements, continuation statements and other documents or instruments
necessary to maintain the lien on each Mortgaged Property and related
collateral; (ii) subject to Sections 3.09, 3.10 and 3.30, any modifications,
waivers, consents or amendments to or with respect to any documents contained
in the related Mortgage File; and (iii) any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Mortgage Loans and the Mortgaged
Properties. Notwithstanding the foregoing, neither the Servicer nor the Special
Servicer shall modify, amend, waive or otherwise consent to any change of the
terms of any Mortgage Loan except under the circumstances described in Sections
3.09, 3.10, 3.28 and 3.30 or the definition of Minimum Defaulted Monthly
Payment hereof. The Servicer and Special Servicer shall service and administer
the Mortgage Loans in accordance with applicable law and shall provide to the
Borrowers any reports required to be provided to them thereby. Subject to
Section 3.11, the Trustee shall, upon the receipt of a written request of a
Servicing Officer, execute and deliver to the Servicer and Special Servicer any
powers of attorney and other documents prepared by the Servicer and Special
Servicer and necessary or appropriate (as certified in such written request) to
enable the Servicer and Special Servicer to carry out their servicing and
administrative duties hereunder.
(b) Unless otherwise provided in the related Note, the
Servicer shall apply any partial Principal Prepayment received on a Mortgage
Loan on a date other than a Due Date to the principal balance of such Mortgage
Loan as of the Due Date immediately following the date of receipt of such
partial Principal Prepayment. Unless otherwise provided in the related Note,
the Servicer shall apply any amounts received on U.S. Treasury obligations
(which shall not be redeemed by the Servicer prior to the maturity thereof) in
respect of a Mortgage Loan being defeased pursuant to its terms to the
principal balance of and interest on such Mortgage Loan as of the Due Date
immediately following the receipt of such amounts.
(c) Each of the Servicer and the Special Servicer may enter
into sub-servicing agreements with third parties with respect to any of its
respective obligations hereunder, provided, that (i) any such agreement shall
be consistent with the provisions of this Agreement and (ii) no sub-servicer
retained by the Servicer or the Special Servicer, as applicable, shall grant
any modification, waiver or amendment to any Mortgage Loan without the approval
of the Servicer or the Special Servicer, as applicable, which approval shall be
given or withheld in accordance with the procedures set forth in Sections 3.09,
3.10, 3.28 or 3.30 (or the definition of Minimum Defaulted Monthly Payment),
and (iii) such agreement shall be consistent with the Servicing Standard. 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 3.01(c).
Any sub-servicing agreement entered into by the Servicer or
the Special Servicer, as applicable, shall provide that it may be assumed or
terminated by the Trustee or the Servicer, respectively, if the Trustee or the
Servicer, respectively, has assumed the duties of the Servicer or the Special
Servicer, respectively, or any successor Servicer or Special Servicer, as
applicable, without cost or obligation to the assuming or terminating party or
the Trust Fund, upon the assumption by such party of the obligations of the
Servicer or the Special Servicer, as applicable, pursuant to Section 7.02.
Any sub-servicing agreement, and any other transactions or
services relating to the Mortgage Loans involving a sub-servicer, shall be
deemed to be between the Servicer or the Special Servicer, as applicable, and
such sub-servicer alone, and the Trustee, the Trust Fund 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, except as set forth in Section 3.01(d) and no provision herein
may be construed so as to require the Trust Fund to indemnify any such
sub-servicer.
(d) If the Trustee or any successor Servicer assumes the
obligations of the Servicer, or if the Servicer or any successor Special
Servicer assumes the obligations of the Special Servicer, in each case in
accordance with Section 7.02, the Trustee, the Servicer or such successor, as
applicable, to the extent necessary to permit the Trustee, the Servicer or such
successor, as applicable, to carry out the provisions of Section 7.02, shall,
without act or deed on the part of the Trustee, the Servicer or such successor,
as applicable, succeed to all of the rights and obligations of the Servicer or
the Special Servicer, as applicable, under any sub-servicing agreement entered
into by the Servicer or the Special Servicer, as applicable, pursuant to
Section 3.01(c), subject to the right of termination by the Trustee or
Servicer, as applicable, set forth in Section 3.01(c). In such event, the
Trustee, the Servicer or the successor Servicer or the Special Servicer, as
applicable, shall be deemed to have assumed all of the Servicer's or the
Special Servicer's interest, as applicable, therein (but not any liabilities or
obligations in respect of acts or omissions of the Servicer or the Special
Servicer, as applicable, prior to such deemed assumption) and to have replaced
the Servicer or the Special Servicer, as applicable, as a party to such
sub-servicing agreement to the same extent as if such sub-servicing agreement
had been assigned to the Trustee, the Servicer or such successor Servicer or
successor Special Servicer, as applicable, except that the Servicer or the
Special Servicer, as applicable, shall not thereby be relieved of any liability
or obligations under such sub-servicing agreement that accrued prior to the
succession of the Trustee, the Servicer or the successor Servicer or successor
Special Servicer, as applicable.
In the event that the Trustee, the Servicer or any successor
Servicer or Special Servicer, as applicable, assumes the servicing obligations
of the Servicer or the Special Servicer, as applicable, upon request of the
Trustee, the Servicer or such successor Servicer or Special Servicer, as
applicable, the Servicer or Special Servicer shall at its own expense (except
in the event that the Servicer is terminated pursuant to Section 6.04(c), in
which event, at the expense of the Certificateholders effecting such
termination) deliver to the Trustee, the Servicer or such successor Servicer or
Special Servicer, as applicable, all documents and records relating to any
sub-servicing agreement and the Mortgage Loans then being serviced thereunder
and an accounting of amounts collected and held by it, if any, and will
otherwise use its best efforts to effect the orderly and efficient transfer of
any sub-servicing agreement to the Trustee, the Servicer or the successor
Servicer or Special Servicer, as applicable.
SECTION 3.02. Liability of the Servicer.
Notwithstanding any sub-servicing agreement, any of the
provisions of this Agreement relating to agreements or arrangements between the
Servicer or Special Servicer and any Person acting as sub-servicer (or its
agents or subcontractors) or any reference to actions taken through any Person
acting as sub-servicer or otherwise, the Servicer or Special Servicer, as
applicable, shall remain obligated and primarily liable to the Trustee and
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of this Agreement without diminution of such
obligation or liability by virtue of such sub-servicing agreements or
arrangements or by virtue of indemnification from the Depositor or any other
Person acting as sub-servicer (or its agents or subcontractors) to the same
extent and under the same terms and conditions as if the Servicer or Special
Servicer, as applicable, alone were servicing and administering the Mortgage
Loans. Each of the Servicer and the Special Servicer shall be entitled to enter
into an agreement with any sub-servicer providing for indemnification of the
Servicer or 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 3.03. Collection of Certain Mortgage Loan Payments.
(a) The Servicer or the Special Servicer, as applicable,
shall use reasonable efforts to collect all payments called for under the terms
and provisions of the Mortgage Loans it is obligated to service hereunder, and
shall follow the Servicing Standard with respect to such collection procedures.
With respect to each Specially Serviced Mortgage Loan, the Special Servicer
shall use its reasonable efforts to collect income statements and rent rolls
from Borrowers as required by the Loan Documents and the terms hereof and shall
provide copies thereof to the Servicer as provided herein. The Servicer shall
provide at least six month's notice to the Special Servicer and Borrowers of
Balloon Payments coming due. Consistent with the foregoing, the Servicer or
Special Servicer, as applicable, may in its discretion waive any late payment
charge in connection with any delinquent Monthly Payment or Balloon Payment
with respect to any Mortgage Loan. In addition, the Servicer shall be entitled
to take such actions with respect to the collection of payments on the Mortgage
Loans as are permitted or required under Section 3.28 hereof.
(b) In the event that the Servicer or Special Servicer
receives, or receives notice from the related Borrower that it will be
receiving, Excess Interest in any Collection Period, the Servicer or Special
Servicer, as applicable, will promptly notify the Trustee.
SECTION 3.04. Collection of Taxes, Assessments and
Similar Items; Escrow Accounts.
(a) With respect to each Mortgage Loan (other than any REO
Mortgage Loan), the 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 the related Mortgaged
Property and the status of insurance premiums payable with respect thereto.
From time to time, the 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 such Mortgaged Properties prior to the applicable penalty
or termination date, in each case employing for such purpose Escrow Payments as
allowed under the terms of the related Mortgage Loan. If a Borrower fails to
make any such payment on a timely basis or collections from the Borrower are
insufficient to pay any such item before the applicable penalty or termination
date, the Servicer shall advance the amount of any shortfall as a Property
Advance unless the Servicer determines in its good faith business judgment that
such Advance would be a Nonrecoverable Advance. The Servicer shall be entitled
to reimbursement of Advances, with interest thereon at the Advance Rate, that
it makes pursuant to the preceding sentence from amounts received on or in
respect of the related Mortgage Loan respecting which such Advance was made or
if such Advance has become a Nonrecoverable Advance, to the extent permitted by
Section 3.06 of this Agreement. No costs incurred by the Servicer in effecting
the payment of taxes and assessments on the Mortgaged Properties shall, for the
purpose of calculating distributions to Certificateholders, be added to the
amount owing under the related Mortgage Loans, notwithstanding that the terms
of such Mortgage Loans so permit.
(b) The Servicer shall segregate and hold all funds collected
and received pursuant to any Mortgage Loan constituting Escrow Payments
separate and apart from any of its own funds and general assets and shall
establish and maintain one or more segregated custodial accounts (each, an
"Escrow Account") into which all Escrow Payments shall be deposited within one
(1) Business Day after receipt. The Servicer shall also deposit into each
Escrow Account any amounts representing losses on Permitted Investments
pursuant to Section 3.07(b) and any Insurance Proceeds or Liquidation Proceeds
which are required to be applied to the restoration or repair of any Mortgaged
Property pursuant to the related Mortgage Loan. Escrow Accounts shall be
Eligible Accounts (except to the extent the related Mortgage Loan requires it
to be held in an account that is not an Eligible Account) and shall be entitled
"AMRESCO Management, Inc., as Servicer, in trust for LaSalle National Bank, as
Trustee in trust for Holders of Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997-D4, and Various Borrowers".
Withdrawals from an Escrow Account may be made by the Servicer only:
(i) to effect timely payments of items constituting Escrow
Payments for the related Mortgage;
(ii) to transfer funds to the Collection Account to reimburse
the Servicer, the Special Servicer, the Trustee or the Fiscal
Agent, as applicable, for any Advance (with interest thereon
at the Advance Rate) relating to Escrow Payments, but only
from amounts received with respect to the related 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 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 related Borrower any
interest or investment income earned on funds deposited in
the Escrow Account if such income is required to be paid to
the related Borrower under law or by the terms of the
Mortgage Loan, or otherwise to the Servicer; and
(vi) to remove any funds deposited in an Escrow Account that
were not required to be deposited therein.
SECTION 3.05. Collection Account; Distribution Account;
Upper-Tier Distribution Account; Default
Interest Distribution Account; and
Excess Interest Distribution Account.
(a) The Servicer shall establish and maintain the Collection
Account in the Trustee's name, for the benefit of the Certificateholders and
the Trustee as the Holder of the Lower-Tier Regular Interests. The Collection
Account shall be established and maintained as an Eligible Account. The
Servicer shall deposit or cause to be deposited in the Collection Account
within one Business Day following receipt the following payments and
collections received or made by it on or with respect to the Mortgage Loans:
(i) all payments on account of principal on the Mortgage
Loans, including the principal component of Unscheduled
Payments;
(ii) all payments on account of interest on the Mortgage
Loans and the interest portion of all Unscheduled Payments
and all Prepayment Premiums;
(iii) any amounts required to be deposited pursuant to
Section 3.07(b), in connection with net losses realized on
Permitted Investments with respect to funds held in the
Collection Account;
(iv) all Net REO Proceeds withdrawn from an REO Account
pursuant to Section 3.17(b) and all Net Insurance Proceeds
and Net Liquidation Proceeds;
(v) any amounts received from Borrowers which represent
recoveries of Property Protection Expenses, to the extent not
permitted to be retained by the Servicer or Special Servicer
as provided herein;
(vi) any other amounts required by the provisions of this
Agreement to be deposited into the Collection Account by the
Servicer or Special Servicer, including, without limitation,
proceeds of any repurchase of a Mortgage Loan pursuant to
Sections 2.03(d) and (e) hereof; and
(vii) any Servicer Prepayment Interest Shortfalls.
The foregoing requirements for deposits in the Collection
Account shall be exclusive, it being understood and agreed that, without
limiting the generality of the foregoing, payments in the nature of late
payment charges (subject to Section 3.12 hereof), 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 Servicer and, to the extent permitted by applicable
law, the Servicer or the Special Servicer, as applicable in accordance with
Section 3.12 hereof, shall be entitled to retain any such charges and fees
received with respect to the Mortgage Loans. In the event that the Servicer
deposits in the Collection Account any amount not required to be deposited
therein, it may at any time withdraw such amount from the Collection Account,
any provision herein to the contrary notwithstanding.
(b) The Trustee shall establish and maintain the Distribution
Account in the name of the Trustee, in trust for the benefit of the
Certificateholders and the Trustee as the Holder of the Lower-Tier Regular
Interests. The Distribution Account shall be established and maintained as an
Eligible Account.
(c) The Trustee shall establish and maintain the Upper-Tier
Distribution Account in the name of the Trustee, in trust for the benefit of
the Certificateholders. The Upper-Tier Distribution Account shall be
established and maintained as an Eligible Account. With respect to each
Distribution Date, the Trustee shall withdraw from the Distribution Account and
deposit in the Upper-Tier Distribution Account on or before such date the
amount of Available Funds (including P&I Advances) and Prepayment Premiums to
be distributed in respect of the Lower-Tier Regular Interests pursuant to
Section 4.01 hereof on such date.
(d) Prior to the Servicer Remittance Date relating to any
Collection Period, in which Default Interest is received, the Trustee shall
establish and maintain the Default Interest Distribution Account in the name of
the Trustee in trust for the benefit of the Holders of the Class V-1
Certificates. The Default Interest Distribution Account shall be established
and maintained as an Eligible Account. On or before the Servicer Remittance
Date related to each Distribution Date, the Servicer shall remit to the Trustee
for deposit in the Default Interest Distribution Account an amount equal to (i)
the amount of the aggregate Default Interest received during the preceding
Collection Period, minus (ii) any portions thereof withdrawn from the
Collection Account pursuant to clause (iii) of Section 3.06 (such amount, if
any, the "Net Default Interest" for such Distribution Date).
(e) Prior to the Servicer Remittance Date relating to any
Collection Period, in which Excess Interest is received, the Trustee shall
establish and maintain the Excess Interest Distribution Account in the name of
the Trustee in trust for the benefit of the Holders of the Class V-2
Certificates. The Excess Interest Distribution Account shall be established and
maintained as an Eligible Account. On or before the Servicer Remittance Date
related to the applicable Distribution Date, the Servicer shall remit to the
Trustee for deposit in the Excess Interest Distribution Account an amount equal
to the Excess Interest received during the applicable Collection Period.
Following the distribution of Excess Interest to Certificateholders on the
first Distribution Date after which there are no longer any Mortgage Loans
outstanding which pursuant to their terms could pay Excess Interest, the
Trustee shall terminate the Excess Interest Distribution Account.
(f) Funds in the Collection Account, the Distribution
Account, the Upper-Tier Distribution Account, the Default Interest Distribution
Account and the Excess Interest Distribution Account may be invested in
Permitted Investments in accordance with the provisions of Section 3.07. The
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 3.06. Permitted Withdrawals from the
Collection Account.
The Servicer may make withdrawals from the Collection Account
only as described below (the order set forth below not constituting an order of
priority for such withdrawals):
(i) to remit to the Trustee for deposit in the Distribution
Account, the Default Interest Distribution Account, the
Interest Reserve Account, and the Excess Interest
Distribution Account, the amounts required to be deposited in
the Distribution Account, the Default Interest Distribution
Account, the Interest Reserve Account, and the Excess
Interest Distribution Account pursuant to Sections 4.06,
3.05(c), 3.05(d), 3.27(a) and 3.05(e);
(ii) to pay or reimburse the Trustee, the Fiscal Agent, the
Servicer and the Special Servicer for Advances (provided,
that the Trustee and the Fiscal Agent shall have priority
with respect to such payment or reimbursement), the
Servicer's right to reimburse any such Person pursuant to
this clause (ii) being limited to (x) any collections on or
in respect of the particular Mortgage Loan or REO Property
with respect to which such Advance was made, (y) with respect
to P&I Advances, any Subordinate Class Advance Amounts with
respect to the related Distribution Date as provided in
Section 4.06(d), or (z) any other amounts in the Collection
Account in the event that such Advances have been deemed to
be Nonrecoverable Advances or are not reimbursed from
recoveries in respect of the related Mortgage Loan or REO
Property after a Final Recovery Determination;
(iii) (A) to pay to the Servicer, the Trustee or the Fiscal
Agent the Advance Interest Amount relating to P&I Advances
(to the extent not reimbursed from Default Interest), and (B)
to pay to the Servicer, Special Servicer, Trustee or Fiscal
Agent any Advance Interest Amounts not relating to any P&I
Advances (provided that in the case of both (A) and (B), the
Trustee and the Fiscal Agent shall have priority with respect
to such payments);
(iv) to pay on or before each Servicer Remittance Date to the
Servicer and the Special Servicer, as applicable, as
compensation, the aggregate unpaid Servicing Compensation and
Special Servicing Compensation (if any), respectively, in
respect of the immediately preceding month, to be paid, in
the case of the Servicing Fee, from interest received on the
related Mortgage Loan, and to pay from time to time to the
Servicer in accordance with Section 3.07(b) any interest or
investment income earned on funds deposited in the Collection
Account) (the Servicer may rely on a certification of the
Special Servicer as to amounts of Special Servicing
Compensation to be withdrawn pursuant to this clause (iv));
(v) to remit to the Distribution Account, an amount equal to
the Trustee Fee in respect of the immediately preceding month
to be paid from interest received on the related Mortgage
Loan;
(vi) to pay on or before each Distribution Date to the
Depositor, the Mortgage Loan Seller or other Originator, 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 2.03(d), Section 2.03(e), Section 3.18
or Section 9.01, all amounts received thereon during the
related Collection Period and subsequent to the date as of
which the amount required to effect such purchase or
repurchase was determined;
(vii) to the extent not reimbursed or paid pursuant to any
other clause of this Section 3.06, to reimburse or pay the
Servicer, the Trustee, the Special Servicer, the Depositor or
the Fiscal Agent, as applicable, for unpaid Servicing Fees,
Special Servicing Compensation and other unpaid items
incurred by such Person pursuant to the second sentence of
Section 3.07(c), Section 3.08(a) and (b), Section 3.10,
Section 3.12(e), Section 3.17(a), (b) and (c), Section
3.18(a), the fourth paragraph of Section 3.22, Section 6.03,
Section 7.04, Section 8.01(c)(v), Section 8.05(d) or Section
10.07, 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 (vii) 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;
(viii) to transfer to the Trustee for 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 the
Upper-Tier REMIC or the Lower-Tier REMIC under the
circumstances and to the extent described in Section 4.05;
(ix) to withdraw any amount deposited into the Collection
Account that was not required to be deposited therein; and
(x) to clear and terminate the Collection Account pursuant to
Section 9.01.
The 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)-(vii) above.
The Servicer shall pay to the Trustee, the Fiscal Agent or
the Special Servicer from the Collection Account (to the extent permitted by
clauses (i)-(vii) above) amounts permitted to be paid to the Trustee, the
Fiscal Agent or the Special Servicer therefrom, promptly upon receipt of a
certificate of a Responsible Officer of the Trustee or the Fiscal Agent or a
certificate of a Servicing Officer, as applicable, describing the item and
amount to which such Person is entitled. The 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
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 the Servicing Compensation (including investment
income), or Trustee Fees, Special Servicing Compensation, Advances, Advance
Interest Amounts, their respective expenses hereunder to the extent such fees
and expenses are to be reimbursed or paid from amounts on deposit in the
Collection Account pursuant to this Agreement (and to have such amounts paid
directly to third party contractors for any invoices approved by the Trustee,
the Servicer or the Special Servicer, as applicable) and any federal, state or
local taxes imposed on either the Upper-Tier REMIC or Lower-Tier REMIC.
SECTION 3.07. Investment of Funds in the Collection
Account, the REO Account, the Lock-Box
Accounts, the Cash Collateral Accounts,
the Interest Reserve Account
and the Reserve Accounts.
(a) The Servicer (or with respect to any REO Account, the
Special Servicer, or with respect to the Interest Reserve Account, Nomura
Securities International, Inc.) may direct any depository institution
maintaining the Collection Account, any Borrower Accounts (subject to the
second succeeding sentence), the Interest Reserve Account and any REO Account
(each, for purposes of this Section 3.07, 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 Servicer, the Special Servicer or by Nomura
Securities International, Inc., 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 Escrow Account, Lock-Box Account, Cash
Collateral Account or Reserve Account (the "Borrower Accounts"), the Servicer
shall act upon the written request of the related Borrower or Manager to the
extent the Servicer is required to do so under the terms of the respective
Mortgage Loan or related documents, provided that in the absence of appropriate
written instructions from the related Borrower or Manager meeting the
requirements of this Section 3.07, the Servicer shall have no obligation to,
but will be entitled to, direct the investment of funds in such accounts in
Permitted Investments. 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 control of
the Servicer (or Nomura Securities International, Inc., with respect to the
Interest Reserve Account, or the Special Servicer, with respect to any REO
Accounts), 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 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 Servicer, the Special Servicer, Nomura Securities
International, Inc., any Borrower or Manager or any losses resulting therefrom,
whether from Permitted Investments or otherwise. The Servicer shall have no
responsibility or liability with respect to the investment directions of Nomura
Securities International, Inc., the Special Servicer, any Borrower or Manager
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 Servicer (or the
Special Servicer or Nomura Securities International, Inc., as applicable)
shall:
(x) consistent with any notice required to be
given thereunder, demand that payment
thereon be made on the last day such
Permitted Investment may otherwise mature
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 Servicer (or the Special Servicer or
Nomura Securities International, Inc., 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 any Investment Account shall be for the benefit of the Servicer
(except with respect to the investment of funds deposited in (i) any Borrower
Account, which shall be for the benefit of the related Borrower to the extent
required under the Mortgage Loan or applicable law, (ii) any REO Account, which
shall be for the benefit of the Special Servicer or (iii) the Interest Reserve
Account, which shall be for the benefit of Nomura Securities International,
Inc.) and, if held in the Collection Account or REO Account shall be subject to
withdrawal by the Servicer or the Special Servicer, as applicable, in
accordance with Section 3.06 or Section 3.17(b), as applicable, and if held in
the Interest Reserve Account, shall be subject to withdrawal by Nomura
Securities International, Inc. pursuant to written instructions. The Servicer
(or with respect to any REO Account, the Special Servicer or with respect to
the Interest Reserve Account, Nomura Securities International, Inc.) shall
deposit from its own funds into the Collection Account, any REO Account or the
Interest Reserve Account, as applicable, the amount of any loss incurred in
respect of any such Permitted Investment immediately upon realization of such
loss; provided, however, that the Servicer, Special Servicer, or Nomura
Securities International, Inc. as applicable, may reduce the amount of such
payment to the extent it forgoes any investment income in such Investment
Account otherwise payable to it. The Servicer shall also deposit from its own
funds in any Borrower Account the amount of any loss incurred in respect of
Permitted Investments, except to the extent that amounts are invested for the
benefit of the Borrower under the terms of the Mortgage Loan or applicable law.
(c) Except as otherwise expressly provided in this Agreement,
if any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Trustee may, and upon the request of Holders of
Certificates representing greater than 50% of the Percentage Interests of any
Class shall, take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
proceedings. In the event the Trustee takes any such action, the Trust Fund
shall pay or reimburse the Trustee for all reasonable out-of-pocket expenses,
disbursements and advances incurred or made by the Trustee in connection
therewith. In the event that the Trustee does not take any such action, the
Servicer may take such action at its own cost and expense.
SECTION 3.08. Maintenance of Insurance Policies
and Errors and Omissions and
Fidelity Coverage.
(a) The Servicer on behalf of the Trustee, as mortgagee,
shall cause the related Borrower to maintain, to the extent required by each
Mortgage Loan (other than REO Mortgage Loans), and if the Borrower does not so
maintain, shall itself maintain (subject to the provisions of this Agreement
concerning Nonrecoverable Advances) to the extent the Trustee as mortgagee has
an insurable interest and to the extent available at commercially reasonable
rates, (i) fire and hazard insurance with extended coverage on the related
Mortgaged Property in an amount which is at least equal to the lesser of (A)
one hundred percent (100%) of the then "full replacement cost" of the
improvements and equipment, (excluding foundations, footings and excavation
costs), without deduction for physical depreciation, and (B) the outstanding
principal balance of the related Mortgage Loan or such greater 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 a
co-insurer and provided such policy shall include a "replacement cost" rider,
(ii) insurance providing coverage against 18 months (or such longer period or
with such extended period endorsement as provided in the related Mortgage or
other loan document) of rent interruptions and (iii) such other insurance as is
required in the related Mortgage Loan. The Special Servicer shall maintain fire
and hazard insurance with extended coverage on each REO Property (subject to
the provisions of this Agreement concerning Nonrecoverable Advances) in an
amount which is at least equal to one hundred percent (100%) of the then "full
replacement cost" of the improvements and equipment (excluding foundations,
footings and excavation costs), without deduction for physical depreciation. If
the Special Servicer does not maintain the insurance described in the preceding
sentence or the required flood insurance described below, the Servicer shall,
as soon as practicable after receipt of notice of such failure, maintain such
insurance, and if the Servicer does not maintain such insurance, the insurance
required in the first sentence of this Section 3.08(a) or the required flood
insurance described below (if the related Borrower fails to maintain such
insurance), the Trustee shall, as soon as practicable after receipt of notice
of such failure, maintain such insurance and if the Trustee does not maintain
such insurance, the Fiscal Agent shall do so, provided that, in each such case,
such obligation will be subject to the provisions of this Agreement concerning
Nonrecoverable Advances. The Special Servicer shall maintain, with respect to
each REO Property (i) public liability insurance providing such coverage
against such risks as the Special Servicer determines, consistent with the
related Mortgage and the Servicing Standard, to be in the best interests of the
Trust Fund, (ii) insurance providing coverage against 24 months of rent
interruptions and (iii) such other insurance as was required pursuant to the
terms of the related Mortgage Loan. All insurance for an REO Property shall be
from a Qualified Insurer. Any amounts collected by the Servicer or the Special
Servicer under any such policies (other than amounts required 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 3.05,
subject to withdrawal pursuant to Section 3.06. Any cost incurred by the
Servicer, Special Servicer, Trustee or Fiscal Agent in maintaining any such
insurance shall not, for the purpose of calculating distributions to
Certificateholders, be added to the unpaid principal balance of the related
Mortgage Loan, notwithstanding that the terms of such Mortgage Loan so permit.
It is understood and agreed that no other additional insurance other than flood
insurance or earthquake insurance subject to the conditions set forth below is
to be required of any Borrower or to be maintained by the Servicer other than
pursuant to the terms of the related Mortgage and pursuant to such applicable
laws and regulations as shall at any time be in force and as shall require such
additional insurance. If the Mortgaged Property (other than an REO Property) is
located in a federally designated special flood hazard area, the Servicer will
use its best efforts to cause the related Borrower to maintain, to the extent
required by each Mortgage Loan, and if the related Borrower does not so
maintain, will itself obtain (subject to the provisions of this Agreement
concerning Nonrecoverable Advances) flood insurance in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the unpaid
principal balance of the related Mortgage Loan and (ii) the maximum amount of
such insurance required by the terms of the related Mortgage and as is
available for the related property under the national flood insurance program
(assuming that the area in which such property is located is participating in
such program). If an REO Property (i) is located in a federally designated
special flood hazard area or (ii) is related to a Mortgage Loan pursuant to
which earthquake insurance was in place at the time of origination and
continues to be available at commercially reasonable rates, the Special
Servicer will obtain (subject to the provisions of this Agreement concerning
Nonrecoverable Advances) flood insurance and/or earthquake insurance in respect
thereof providing substantially the same coverage as described in the preceding
sentences or, with respect to earthquake insurance, in the amount required by
the Mortgage Loan or, if not specified, in-place at origination. If at any time
during the term of this Agreement a recovery under a flood or fire and hazard
insurance policy in respect of an REO Property is not available but would have
been available if such insurance were maintained thereon in accordance with the
standards applied to Mortgaged Properties described herein, the Special
Servicer shall (subject to the provisions of this Agreement concerning
Nonrecoverable Advances) either (i) immediately deposit into the Collection
Account from its own funds the amount that would have been recovered or (ii)
apply to the restoration and repair of the property from its own funds the
amount that would have been recovered, if such application would be consistent
with the Servicing Standard; provided, however, that the Special Servicer shall
not be responsible for any shortfall in insurance proceeds resulting from an
insurer's refusal or inability to pay a claim. In the case of any insurance
otherwise required to be maintained pursuant to this Section that is not being
so maintained because the Servicer or the Special Servicer, as applicable, has
determined that it is not available at commercially reasonable rates, the
Servicer or the Special Servicer, as applicable, shall deliver an Officer's
Certificate to the Trustee and each Rating Agency which details the steps that
were taken in seeking such insurance and the factors which led to the
determination that such insurance was not so available. Costs to the Servicer
or Special Servicer of maintaining insurance policies pursuant to this Section
3.08 shall be paid by the Servicer or Special Servicer as a Property Advance
and shall be reimbursable to the Servicer or Special Servicer with interest at
the Advance Rate, which reimbursement may be effected under Section 3.06(ii) or
(vii).
The Servicer (or the Special Servicer, with respect to the
Specially Serviced Mortgage Loans) agrees to prepare and present, on behalf of
itself, the Trustee and the Certificateholders, claims under each related
insurance policy maintained pursuant to this Section 3.08(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.
All insurance policies required hereunder shall name the
Trustee or the Servicer or the Special Servicer, on behalf of the Trustee as
the mortgagee, as loss payee.
Any determination made by the Servicer or Special Servicer
that insurance is not commercially reasonably available shall be subject to
confirmation by Fitch that such determination not to purchase such insurance
will not result in a downgrade, qualification or withdrawal of the then current
ratings assigned to the Certificates rated by Fitch.
(b) (I) If the Servicer or the Special Servicer, as
applicable, obtains and maintains a blanket insurance policy insuring
against fire and hazard losses on all of the Mortgaged Properties (other
than REO Properties) as to which the related Borrower has not maintained
insurance required by the related Mortgage Loan or on all of the REO
Properties, as the case may be, it shall conclusively be deemed to have
satisfied its respective obligations concerning the maintenance of
insurance coverage set forth in Section 3.08(a). Any such blanket
insurance policy shall be maintained with a Qualified Insurer. A blanket
insurance policy may contain a deductible clause, in which case the
Servicer or the Special Servicer, as applicable, shall, in the event that
(i) there shall not have been maintained on the related Mortgaged Property
a policy otherwise complying with the provisions of Section 3.08(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 any such deductible
limitation, the deductible limitation which is consistent with the
Servicing Standard. In connection with its activities as Servicer or the
Special Servicer hereunder, as applicable, the Servicer or the Special
Servicer, respectively, 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 Servicer or the Special Servicer, as applicable,
causes any Mortgaged Property or REO Property to be covered by a master
force placed insurance policy, such policy shall be issued by a Qualified
Insurer and provide no less coverage in scope and amount for such
Mortgaged Property or REO Property than the insurance required to be
maintained pursuant to Section 3.08(a) in which case the Servicer or
Special Servicer shall conclusively be deemed to have satisfied its
respective obligations to maintain insurance pursuant to Section 3.08(a).
Such policy may contain a deductible clause, in which case the Servicer or
the Special Servicer, as applicable, shall, in the event that (i) there
shall not have been maintained on the related Mortgaged Property or REO
Property a policy otherwise complying with the provisions of Section
3.08(a), and (ii) there shall have been one or more losses which would
have been covered by such a policy had it been maintained, immediately
deposit into the Collection Account from its own funds the amount not
otherwise payable under such policy because of such deductible to the
extent that any such deductible exceeds the deductible limitation that
pertained to the related Mortgage Loan, or, in the absence of any such
deductible limitation, the deductible limitation which is consistent with
the Servicing Standard.
(c) The Servicer and the Special Servicer shall maintain a
fidelity bond in the form and amount that would meet the servicing requirements
of prudent institutional commercial mortgage lenders and loan servicers with
the Trustee named as loss payee. The Servicer and the Special Servicer each
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 Servicer and the Special
Servicer, as applicable. In addition, the Servicer and the Special Servicer
shall keep in force during the term of this Agreement a policy or policies of
insurance covering loss occasioned by the errors and omissions of its officers
and employees in connection with its obligations to service the Mortgage Loans
hereunder in the form and amount that would meet the servicing requirements of
prudent institutional commercial mortgage lenders and loan servicers with the
Trustee named as loss payee. The Servicer shall cause each and every
sub-servicer for it to maintain, or cause to be maintained by any agent or
contractor servicing any Mortgage Loan on behalf of such sub-servicer, a
fidelity bond and an errors and omissions insurance policy which satisfy the
requirements for the fidelity bond and the errors and omissions policy to be
maintained by the Servicer pursuant to this Section 3.08(c). All fidelity bonds
and policies of errors and omissions insurance obtained under this Section
3.08(c) shall be issued by a Qualified Insurer.
SECTION 3.09. Enforcement of Due-On-Sale Clauses;
Assumption Agreements; Defeasance
Provisions.
(a) If any Mortgage Loan contains a provision in
the nature of a "due-on-sale" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at
the mortgagee's option) become due and payable upon
the sale or other transfer of an interest in the
related Mortgaged Property, or
(ii) provides that such Mortgage Loan may not be assumed
without the consent of the related mortgagee in
connection with any such sale or other transfer,
then, for so long as such Mortgage Loan is included in the Trust Fund, the
Servicer or Special Servicer, as applicable, on behalf of the Trust Fund shall
not be required to enforce such due-on-sale clause and in connection therewith
shall not be required to (x) accelerate payments thereon or (y) withhold its
consent to such an assumption to the extent permitted under the terms of the
related Mortgage Loan if (x) such provision is not exercisable under applicable
law or such exercise is reasonably likely to result in meritorious legal action
by the Borrower or (y) the Servicer or Special Servicer, as applicable,
determines, in accordance with the Servicing Standard, that granting such
consent would be likely to result in a greater recovery, on a present value
basis (discounting at the related Mortgage Rate) than would enforcement of such
clause. If the Servicer or Special Servicer, as applicable, determines that
granting of such consent would likely result in a greater recovery or such
provision is not legally enforceable, the Servicer or Special Servicer, as
applicable, is authorized to take or enter into an assumption agreement from or
with the Person to whom the related Mortgaged Property has been or is about to
be conveyed, and to release the original Borrower from liability upon the
Mortgage Loan and substitute the new Borrower as obligor thereon, provided,
that (a) the credit status of the prospective new Borrower is in compliance
with the Servicer's or Special Servicer's regular commercial mortgage
origination or servicing standards and criteria (as evidenced in writing by the
Servicer or Special Servicer) and the terms of the related Mortgage and (b) the
Servicer or Special Servicer has received written confirmation from each of
Fitch, ▇▇▇▇▇'▇ and S&P, and, if the Mortgage Loan represents greater than 2% of
the aggregate Stated Principal Balances of the Mortgage Loans, DCR that such
assumption or substitution would not, in and of itself, cause a downgrade,
qualification or withdrawal of the then current ratings assigned to the
Certificates. In connection with each such assumption or substitution entered
into by the Special Servicer, the Special Servicer shall give prior notice
thereof to the Servicer. The Servicer or Special Servicer, as applicable, shall
notify the Trustee that any such assumption or substitution agreement has been
completed by forwarding to the Trustee (with a copy to the Servicer, if
applicable,) the original copy of such agreement, which copies 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.
(b) If any Mortgage Loan contains a provision in the nature
of a "due-on-encumbrance" clause, which by its terms:
(i) provides that such Mortgage Loan shall (or may at
the mortgagee's option) become due and payable upon
the creation of any lien or other encumbrance on the
related Mortgaged Property, or
(ii) requires the consent of the related mortgagee
to the creation of any such lien or other
encumbrance on the related Mortgaged Property,
then the Servicer or Special Servicer, as applicable, on behalf of the Trust
Fund, shall not be required to enforce such due-on-encumbrance clause and in
connection therewith will not be required to (i) accelerate the payments on the
related Mortgage Loan or (ii) withhold its consent to such lien or encumbrance
if the Servicer or Special Servicer, as applicable, (x) determines, in
accordance with the Servicing Standard, that such consent would be in the best
interests of the Trust Fund and (y) receives prior written confirmation from
each of Fitch, ▇▇▇▇▇'▇ and S&P, and, if the Mortgage Loan represents greater
than 2% of the aggregate Stated Principal Balances of the Mortgage Loans, DCR
that granting such consent would not, in and of itself, cause a downgrade,
qualification or withdrawal of any of the then current ratings assigned to the
Certificates.
(c) Nothing in this Section 3.09 shall constitute a waiver of
the Trustee's right, as the mortgagee of record, to receive notice of any
assumption of a Mortgage Loan, any sale or other transfer of the related
Mortgaged Property or the creation of any lien or other encumbrance with
respect to such Mortgaged Property.
(d) In connection with the taking of, or the failure to take,
any action pursuant to this Section 3.09, neither the Servicer nor the Special
Servicer shall agree to modify, waive or amend, and no assumption or
substitution agreement entered into pursuant to Section 3.09(a) shall contain
any terms that are different from, any term of any Mortgage Loan or the related
Note, other than pursuant to Section 3.30.
(e) With respect to any Mortgage Loan which permits release
of Mortgaged Properties through defeasance:
(i) In the event such Mortgage Loan requires that the
Servicer on behalf of the Trustee purchase the
required U.S. government obligations, the Servicer
shall purchase such obligations in accordance with
the terms of such Mortgage Loan; provided, that the
Servicer shall not accept the amounts paid by the
related Borrower to effect defeasance until
acceptable U.S. government obligations have been
identified.
(ii) In the event that such Mortgage Loan permits the
assumption of the obligations of the related
Borrower by a successor mortgagor, prior to
permitting such assumption and to the extent not
inconsistent with such Mortgage Loan, the Servicer
shall obtain written confirmation from each Rating
Agency that such assumption would not, in and of
itself, cause a downgrade, qualification or
withdrawal of the then current ratings assigned to
the Certificates.
(iii) To the extent not inconsistent with such Mortgage
Loan, the Servicer shall require an Opinion of
Counsel to the related Borrower (which shall be an
expense of the related Borrower) to the effect that
the Trustee has a first priority security interest
in the defeasance deposit and the U.S. government
obligations and the assignment thereof is valid and
enforceable; such opinion, together with any other
certificates or documents to be required in
connection with such defeasance shall be in form and
substance acceptable to each Rating Agency.
(iv) To the extent not inconsistent with the Mortgage
Loan, the Servicer shall require a certificate at
the related Borrower's expense from an Independent
certified public accountant certifying that the U.S.
government obligations comply with the requirements
of the related Loan Agreement or Mortgage.
(v) Prior to permitting release of any Mortgaged
Properties through defeasance, to the extent not
inconsistent with the related Mortgage Loan, the
Servicer shall obtain written confirmation from each
Rating Agency that such defeasance would not, in and
of itself, result in a downgrade, qualification or
withdrawal of the then current ratings assigned to
the Certificates.
(vi) Prior to permitting release of any Mortgaged
Property through defeasance, if the related Mortgage
Loan so requires and provides for the related
Borrower to pay the cost thereof, the Servicer shall
require an Opinion of Counsel of the related
Borrower to the effect that such release will not
cause either the Upper-Tier REMIC or Lower-Tier
REMIC to fail to qualify as a REMIC at any time that
any Certificates are outstanding or cause a tax to
be imposed on the Trust Fund under the REMIC
Provisions.
SECTION 3.10. Appraisals; Realization Upon Defaulted
Mortgage Loans.
(a) Contemporaneously with the earliest of (i) the effective
date of any (A) modification of a Mortgage Rate, principal balance or
amortization terms of any Mortgage Loan, or any other term of a Mortgage Loan,
(B) extension of the Maturity Date of a Mortgage Loan as described below in
Section 3.30(c), or (C) consent to the release of any Mortgaged Property from
the lien of the related Mortgage other than pursuant to the terms of the
related Mortgage Loan, (ii) the occurrence of any Appraisal Reduction Event,
(iii) a default in the payment of a Balloon Payment, or (iv) the date on which
the Special Servicer, consistent with the Servicing Standard, requests that an
Updated Appraisal be obtained, the Servicer (after consultation with the
Special Servicer) shall obtain an Updated Appraisal; provided, however, that
the Servicer shall not be required to obtain an Updated Appraisal pursuant to
clauses (i) through (iv) above with respect to any Mortgaged Property for which
there exists an appraisal which is less than twelve months old. The Servicer
shall obtain letter updates to each Updated Appraisal annually and prior to the
Special Servicer granting extensions beyond one year or any subsequent
extension after granting a one year extension with respect to the same Mortgage
Loan. For so long as any Mortgage Loan for which an Updated Appraisal has been
obtained is included in the Trust Fund, the Servicer shall obtain a new Updated
Appraisal with respect to an Updated Appraisal which is more than three years
old. The Servicer shall send all such letter updates and Updated Appraisals to
the Rating Agencies.
(b) Upon the occurrence of a material default under a
Specially Serviced Mortgage Loan, except as otherwise specifically provided in
Section 3.09(a) and (b), the Special Servicer may, consistent with the
Servicing Standard, accelerate such Specially Serviced Mortgage Loan and
commence a foreclosure or other acquisition with respect to the related
Mortgaged Property or Properties, provided, that the Special Servicer
determines that such acceleration and foreclosure are more likely to produce a
greater recovery to Certificateholders on a present value basis (discounting at
the related Mortgage Rate) than would a waiver of such default or an extension
or modification in accordance with the provisions of Section 3.30 hereof. In
connection with any foreclosure or other acquisition as to which the Special
Servicer is not required to act under Instructions from the Directing Holders,
the Servicer shall pay the costs and expenses in any such proceedings as an
Advance unless the Servicer determines, in its good faith judgment, that such
Advance would constitute a Nonrecoverable Advance. The Servicer shall be
entitled to reimbursement of Advances (with interest at the Advance Rate) made
pursuant to the preceding sentence to the extent permitted by Section 3.06(ii),
(iii) and (vii). If the Special Servicer is acting pursuant to Instructions,
the cost and expenses in any such proceeding shall be paid by the Directing
Certificateholders or the Special Servicer, without reimbursement therefor by
the Trust Fund.
(c) If the Special Servicer elects to proceed with a
non-judicial foreclosure in accordance with the laws of the state where the
Mortgaged Property is located, the Special Servicer shall not be required to
pursue a deficiency judgment against the related Borrower or any other liable
party if the laws of the state do not permit such a deficiency judgment after a
non-judicial foreclosure or if the Special Servicer determines, in its best
judgment, that the likely recovery if a deficiency judgment is obtained will
not be sufficient to warrant the cost, time, expense and/or exposure of
pursuing the deficiency judgment and such determination is evidenced by an
Officers' Certificate delivered to the Trustee.
(d) 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 Special Servicer) or a separate trustee or co-trustee on
behalf of the Trustee as holder of the Lower-Tier Regular Interests and
Certificateholders. Notwithstanding any such acquisition of title and
cancellation of the related Mortgage Loan, such Mortgage Loan shall (except for
purposes of Section 9.01) be considered to be an REO Loan held in the Trust
Fund until such time as the related REO Property shall be sold by the Trust
Fund and shall be reduced only by collections net of expenses. 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
Stated Principal Balance thereof, the related amortization
schedule in effect at the time of any such acquisition of
title shall remain in effect; and
(ii) Subject to Section 1.02(b), 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 (not including Excess 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 until such principal has
been paid in full and then to Excess Interest and other
amounts due under such Mortgage Loan. 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.
(e) Notwithstanding any provision herein to the contrary, the
Special Servicer shall not acquire for the benefit of the Trust Fund any
personal property pursuant to this Section 3.10 unless either:
(i) such personal property is incident to real property
(within the meaning of Section 856(e)(1) of the Code) so
acquired by the Special Servicer for the benefit of the Trust
Fund; or
(ii) the Special Servicer shall have requested and received
an Opinion of Counsel (which opinion shall be an expense of
the Lower-Tier REMIC) to the effect that the holding of such
personal property by the Lower-Tier REMIC will not cause the
imposition of a tax on the Lower-Tier REMIC or Upper-Tier
REMIC under the REMIC Provisions or cause the Lower-Tier
REMIC or Upper-Tier REMIC to fail to qualify as a REMIC at
any time that any Certificate is outstanding.
(f) Notwithstanding any provision to the contrary in this
Agreement, the Special Servicer shall not, on behalf of the Trust Fund, obtain
title to any direct or indirect partnership interest or other equity interest
in any Borrower pledged pursuant to any pledge agreement unless the Special
Servicer shall have requested and received an Opinion of Counsel (which opinion
shall be an expense of the Trust Fund) to the effect that the holding of such
partnership interest or other equity interest by the Trust Fund will not cause
the imposition of a tax on the Lower-Tier REMIC or Upper-Tier REMIC under the
REMIC Provisions or cause the Lower-Tier REMIC or Upper-Tier REMIC to fail to
qualify as a REMIC at any time that any Certificate is outstanding.
(g) Notwithstanding any provision to the contrary contained
in this Agreement, the Special Servicer shall not, on behalf of the Trust Fund,
obtain title to a Mortgaged Property as a result of or in lieu of foreclosure
or otherwise, obtain title to any direct or indirect partnership interest in
any Borrower pledged pursuant to a pledge agreement and thereby be the
beneficial owner of a Mortgaged Property, and shall not otherwise acquire
possession of, or take any other action with respect to, any Mortgaged Property
if, as a result of any such action, the Trustee, for the Trust Fund or the
Certificateholders, would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of such
Mortgaged Property within the meaning of the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
or any comparable law, unless the Special Servicer has previously determined in
accordance with the Servicing Standard, based on an updated environmental
assessment report prepared by an Independent Person who regularly conducts
environmental audits, that:
(i) 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
(ii) there are no circumstances present at such
Mortgaged Property relating to the use, management or disposal of any
Hazardous Materials for which investigation, testing, monitoring,
containment, clean-up or remediation could be required under any
currently effective federal, state or local law or regulation, or
that, if any such Hazardous Materials are present for which such
action could be required, after consultation with an environmental
consultant, it would be in the best economic interest of the Trust
Fund to take such actions with respect to the affected Mortgaged
Property.
In the event that the environmental assessment first obtained
by the Special Servicer with respect to a Mortgaged Property indicates that
such Mortgaged Property may not be in compliance with applicable environmental
laws or that Hazardous Materials may be present but does not definitively
establish such fact, the Special Servicer shall cause such further
environmental tests to be conducted by an Independent Person who regularly
conducts such tests as the Special Servicer shall deem prudent to protect the
interests of Certificateholders. Any such tests shall be deemed part of the
environmental assessment obtained by the Special Servicer for purposes of this
Section 3.10.
(h) The environmental assessment contemplated by Section
3.10(g) shall be prepared within three months of the determination that such
assessment is required by any Independent Person who regularly conducts
environmental audits for purchasers of commercial property where the Mortgaged
Property is located, as determined by the Special Servicer in a manner
consistent with the Servicing Standard. The Servicer shall advance the cost of
preparation of such environmental assessments unless the Servicer determines,
in its good faith judgment, that such Advance would be a Nonrecoverable
Advance. The Servicer shall be entitled to reimbursement of Advances (with
interest at the Advance Rate) made pursuant to the preceding sentence in the
manner set forth in Section 3.06.
(i) If the Special Servicer determines pursuant to Section
3.10(g)(i) 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 in
compliance therewith, or if the Special Servicer determines pursuant to Section
3.10(g)(ii) 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 Hazardous Materials affecting such Mortgaged Property as is
required by law or regulation, the Special Servicer shall take such action as
it deems to be in the best economic interest of the Trust Fund, 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 greater than 50% of the aggregate Voting
Rights of such Classes directing the Special Servicer not to take such action.
Notwithstanding the foregoing, if the Special Servicer reasonably determines
that it is likely that within such 30-day period irreparable environmental harm
to such Mortgage Property would result from the presence of such Hazardous
Materials and provides a prior written statement to the Trustee setting forth
the basis for such determination, then the Special Servicer may take such
action to remedy such condition as may be consistent with the Servicing
Standard. None of the Trustee, the Servicer or the Special Servicer shall be
obligated to take any action or not take any action pursuant to this Section
3.10(i) at the direction of the Certificateholders unless the
Certificateholders agree to indemnify the Trustee, the Servicer and the Special
Servicer with respect to such action or inaction. The Special Servicer shall
advance the cost of any such compliance, containment, clean-up or remediation
unless the Special Servicer determines, in its good faith judgment, that such
Advance would constitute a Nonrecoverable Advance.
(j) The Special Servicer shall report to the IRS and to the
related Borrower, in the manner required by applicable law, the information
required to be reported regarding any Mortgaged Property which is abandoned or
foreclosed or regarding any cancellation of indebtedness with respect to any
Mortgage Loan. The Special Servicer shall deliver a copy of any such report to
the Trustee.
(k) The costs of any Updated Appraisal obtained pursuant to
this Section 3.10 shall be paid by the Servicer as an Advance and shall be
reimbursable from the Collection Account (or from the Collateral Account to the
extent Advances are otherwise reimbursable therefrom pursuant to this Section
3.10).
SECTION 3.11. Trustee to Cooperate; Release of
Mortgage Files.
Upon the payment in full of any Mortgage Loan, or the receipt
by the Servicer of a notification that payment in full has been escrowed in a
manner customary for such purposes, the Servicer shall immediately notify the
Trustee or 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 3.05 have been or will be so deposited)
of a Servicing Officer and shall request delivery to it of the Mortgage File.
No expenses incurred in connection with any instrument of satisfaction or deed
of reconveyance shall be chargeable to the Trust Fund.
From time to time upon request of the Servicer or 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
Servicer or Special Servicer, as applicable. Upon return of the foregoing to
the Custodian, or in the event of a liquidation or conversion of the Mortgage
Loan into an REO Property, receipt by the Trustee of a certificate of a
Servicing Officer stating that such Mortgage Loan was liquidated and that all
amounts received or to be received in connection with such liquidation 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 deliver a copy of the Request for Release to the
Servicer or Special Servicer, as applicable.
Upon written certification of a Servicing Officer, the
Trustee shall execute and deliver to the Special Servicer any court pleadings,
requests for trustee's sale or other documents prepared by the Special
Servicer, its agents or attorneys, necessary to the foreclosure or trustee's
sale in respect of a Mortgaged Property or to any legal action brought to
obtain judgment against any Borrower on the Note or Mortgage or to obtain a
deficiency judgment, or to enforce any other remedies or rights provided by the
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 Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
SECTION 3.12. Servicing Fees, Trustee Fees and
Special Servicing Compensation.
(a) As compensation for its activities hereunder, the
Servicer shall be entitled with respect to each Mortgage Loan to the Servicing
Fee, which shall be payable from amounts on deposit in the Collection Account
as set forth in Section 3.06(iv). The Servicer's rights to the Servicing Fee
may not be transferred in whole or in part except in connection with the
transfer of all of the Servicer's responsibilities and obligations under this
Agreement. In addition, the Servicer shall be entitled to receive, as
additional Servicing Compensation, to the extent permitted by applicable law
and the related Mortgage Loans (and not otherwise payable to the Special
Servicer pursuant to Section 3.12(b)), any late payment charges, assumption
fees, loan modification fees, extension fees, loan service transaction fees,
demand fees, beneficiary statement charges or similar items (but not including
any Prepayment Premiums), in each case to the extent received and not required
to be deposited or retained in the Collection Account pursuant to Section 3.05;
provided, however, that the Servicer shall not be entitled to apply or retain
any amounts as additional compensation, any late payment charges with respect
to any Mortgage Loan with respect to which a default or event of default
thereunder has occurred and is continuing unless and until such default or
event of default has been cured and all delinquent amounts (including any
Default Interest) due with respect to such Mortgage Loan have been paid. The
Servicer shall also be entitled pursuant to, and to the extent provided in,
Sections 3.06(iv) and 3.07(b) to withdraw from the Collection Account and to
receive from any Borrower Accounts (to the extent not payable to the related
Borrower under the Mortgage Loan or applicable law), the Distribution Account,
Upper-Tier Distribution Account, Default Interest Distribution Account, and the
Excess Interest Distribution Account, any interest or other income earned on
deposits therein. Notwithstanding the foregoing, the Servicing Fee and
investment income earned on any Principal Prepayments during the related
Collection Period and due to the Servicer on any Distribution Date shall be
reduced by the amount of any Servicer Prepayment Interest Shortfalls.
As compensation for its activities hereunder on each
Distribution Date, the Trustee shall be entitled with respect to each Mortgage
Loan to the Trustee Fee, which shall be payable from amounts on deposit in the
Collection Account as set forth in Section 3.06(v). 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.
Except as otherwise provided herein, the Servicer shall pay
all expenses incurred by it in connection with its servicing activities
hereunder, including all fees of any sub-servicers retained by it. Except as
otherwise provided herein, the Trustee shall pay all expenses incurred by it in
connection with its activities hereunder.
(b) As compensation for its activities hereunder, the Special
Servicer shall be entitled with respect to each Specially Serviced Mortgage
Loan to the Special Servicing Fee, which shall be payable from amounts on
deposit in the Collection Account as set forth in Section 3.06(iv). The Special
Servicer's rights to the Special Servicing Fee may not be transferred in whole
or in part except in connection with the transfer of all of the Special
Servicer's responsibilities and obligations under this Agreement. In addition,
the Special Servicer shall be entitled to receive, as Special Servicing
Compensation, (i) to the extent permitted by applicable law and the related
Loan Documents, any Assumption Fees, loan service transaction fees, demand
fees, statement charges and other fees relating to any Specially Serviced
Mortgage Loan or with respect to servicing activities performed by the Special
Servicer and, for any modification, extension or other action by the Special
Servicer for which the consent of, or review by, the Servicer is required,
one-half of any modification, extension or other fees payable by the related
Borrower in connection therewith and (ii) any interest or other income earned
on deposits in the REO Accounts. If a review by, or the consent of, the
Servicer is not required in connection with an extension, modification or other
action, the Special Servicer shall be entitled to the full amount of any
modification, extension or other fees.
Except as otherwise provided herein, the Special Servicer
shall pay all expenses incurred by it in connection with its servicing
activities hereunder.
(c) Reserved.
(d) Notwithstanding the foregoing, in the event that the
Special Servicer is, or is an Affiliate of, or has an economic arrangement for
the purpose of retaining the full Special Servicing Fee Rate with, the Holder
or Holders of Certificates representing greater than 50% of the Percentage
Interests of the most subordinate Class of Certificates then outstanding, the
Special Servicer shall provide written notice thereof to the Servicer and the
Special Servicer shall be entitled to receive a Special Servicing Fee that
accrues at a rate equal to one-half of the Special Servicing Fee Rate.
(e) The Servicer, Special Servicer and Trustee shall be
entitled to reimbursement from the Trust Fund for the 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)(iii). Such expenses shall include,
by way of example and not by way of limitation, environmental assessments,
Updated Appraisals and appraisals in connection with foreclosure, the fees and
expenses of any administrative or judicial proceeding and expenses expressly
identified as reimbursable in Section 3.06(vii).
(f) No provision of this Agreement or of the Certificates
shall require the Servicer, the Special Servicer, the Trustee or the Fiscal
Agent to expend or risk their own funds or otherwise incur any financial
liability in the performance of any of their duties hereunder or thereunder, or
in the exercise of any of their rights or powers, if, in the good faith
business judgment of the Servicer, Special Servicer, Trustee or Fiscal Agent,
as the case may be, repayment of such funds would not be ultimately recoverable
from late payments, Net Insurance Proceeds, Net Liquidation Proceeds and other
collections on or in respect of the Mortgage Loans, or from adequate indemnity
from other assets comprising the Trust Fund against such risk or liability.
If the Servicer, the Special Servicer or the Trustee receives
a request or inquiry from a Borrower, any Certificateholder or any other Person
the response to which would, in the Servicer's or the Trustee's good faith
business judgment require the assistance of Independent legal counsel or other
consultant to the Servicer, the Special Servicer or the Trustee, the cost of
which would not be an expense of the Trust Fund hereunder, then the Servicer,
the Special Servicer or the Trustee, as the case may be, shall not be required
to take any action in response to such request or inquiry unless the Borrower
or such Certificateholder or such other Person, as applicable, makes
arrangements for the payment of the Servicer's, the Special Servicer's or the
Trustee's expenses associated with such counsel (including, without limitation,
posting an advance payment for such expenses) satisfactory to the Servicer, the
Special Servicer or the Trustee, as the case may be, in its sole discretion.
Unless such arrangements have been made, the Servicer, the Special Servicer or
the Trustee, as the case may be, shall have no liability to any Person for the
failure to respond to such request or inquiry.
SECTION 3.13. Reports to the Trustee; Collection
Account Statements.
(a) The Servicer shall deliver to the Trustee and the Special
Servicer, no later than 12:00 noon Central time on the Servicer Remittance Date
prior to each Distribution Date, the Servicer Remittance Report with respect to
the related Distribution Date (which shall include, without limitation, the
amount of Available Funds for such related Collection Period) including a
written statement of anticipated P&I Advances for the related Distribution
Date. The Servicer's responsibilities under this Section 3.13(a) with respect
to REO Loans shall be subject to the satisfaction of the Special Servicer's
obligations under Section 3.26.
(b) For so long as the Servicer makes deposits into and
withdrawals from the Collection Account, not later than fifteen days after each
Distribution Date, the Servicer shall forward to the Trustee and the Fiscal
Agent a statement prepared by the 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 and showing the aggregate amount of deposits into and
withdrawals from the Collection Account of each category of deposit specified
in Section 3.05 and each category of withdrawal specified in Section 3.06 for
the related Collection Period. The Trustee and its agents and attorneys may at
any time during normal business hours, upon reasonable notice, inspect and copy
the books, records and accounts of the Servicer solely relating to the Mortgage
Loans and the performance of its duties hereunder.
(c) No later than 12:00 noon Central time on the Servicer
Remittance Date, the Servicer shall deliver or cause to be delivered to the
Trustee the following reports with respect to the Mortgage Loans (and, if
applicable, the related REO Properties), providing the required information as
of the Due Date: (i) a Comparative Financial Status Report, (ii) a Delinquent
Loan Status Report; (iii) an Historical Loss Estimate Report; (iv) an
Historical Loan Modification Report; and (v) an REO Status Report. Such reports
shall be presented in writing and on a computer readable medium reasonably
acceptable to the Trustee. The information that pertains to Specially Serviced
Mortgage Loans and REO Properties reflected in such reports shall be based
solely upon the reports delivered by the Special Servicer to the Servicer at
least one Business Day prior to the related Servicer Remittance Date in the
form required by Section 3.13(f) or shall be provided by means of such reports
so delivered by the Special Servicer to the Servicer in the form so required.
In the absence of manifest error, the Servicer shall be entitled to
conclusively rely upon, without investigation or inquiry, the information and
reports delivered to it by the Special Servicer, and the Trustee shall be
entitled to conclusively rely upon the Servicer's reports and the Special
Servicer's reports without any duty or obligation to recompute, verify or
recalculate any of the amounts and other information stated therein.
(d) The Servicer shall deliver or cause to be delivered to
the Trustee the following materials, in each case to the extent that such
materials or the information on which they are based have been received by the
Servicer:
(i) At least annually by June 30th, with respect to
each Mortgage Loan and REO Mortgage Loan (to the extent prepared by
and received from the Special Servicer in the case of any Specially
Serviced Mortgage Loan or REO Mortgage Loan), an Operating Statement
Analysis for the related Mortgaged Property or REO Property as of the
end of the preceding fiscal year, together with copies of the
operating statements and rent rolls (but only to the extent the
related Borrower is required by the Mortgage to deliver, or otherwise
agrees to provide such information and, with respect to operating
statements and rent rolls for Specially Serviced Mortgage Loans and
REO Properties, only to the extent requested by the Special Servicer)
for the related Mortgaged Property or REO Property as of the end of
the preceding fiscal year. The Servicer shall use its best reasonable
efforts to obtain said annual operating statements and rent rolls with
respect to each of the Mortgage Loans other than Specially Serviced
Mortgage Loans or REO Mortgage Loans, which efforts shall include a
letter sent to the related Borrower each quarter (followed up with
telephone calls) requesting such annual operating statements and rent
rolls until they are received to the extent such action is consistent
with applicable law and the terms of the Mortgage Loans.
(ii) Within thirty days after receipt by the
Servicer (or the Special Servicer in the case of a Specially Serviced
Mortgage Loan or REO Property) of any annual operating statements with
respect to any Mortgaged Property or REO Property (to the extent
prepared by and received from the Special Servicer in the case of any
Specially Serviced Mortgage Loan or REO Property), an NOI Adjustment
Worksheet for such Mortgaged Property (with the annual operating
statements attached thereto as an exhibit).
The Servicer shall maintain one Operating Statement Analysis report for each
Mortgaged Property and REO Property (to the extent prepared by and received
from the Special Servicer in the case of any REO Property or any Mortgaged
Property constituting security for a Specially Serviced Mortgage Loan). The
Operating Statement Analysis report for each Mortgaged Property (other than any
such Mortgaged Property which is REO Property or constitutes security for a
Specially Serviced Mortgage Loan) is to be updated by the Servicer and such
updated report delivered to the Trustee within thirty days after receipt by the
Servicer of updated operating statements for such Mortgaged Property. The
Servicer will use the "Normalized" column from the NOI Adjustment Worksheet to
update the Operating Statement Analysis report and will use any operating
statements received with respect to any Mortgaged Property (other than any such
Mortgaged Property which is REO Property or constitutes security for a
Specially Serviced Mortgage Loan) to update the Operating Statement Analysis
report for such Mortgaged Property, such updates to be completed and copies
thereof sent to the Trustee within thirty days after receipt of the necessary
information.
The Special Servicer will be required pursuant to Section
3.13(g) to deliver to the Servicer the information required pursuant to this
Section 3.13(d) with respect to Specially Serviced Mortgage Loans and REO
Mortgage Loans on or before June 10th of each year, commencing on June 10,
1997, and within ten days after its receipt of any operating statement for any
related Mortgaged Property or REO Property.
(e) No later than 12:00 noon Central time on the Servicer
Remittance Date, beginning in May 1997, the Servicer shall prepare and deliver
to the Trustee and the Special Servicer, a Watch List of all Mortgage Loans
that the Servicer has determined are in jeopardy of becoming Specially Serviced
Mortgage Loans. For this purpose, Mortgage Loans that are in jeopardy of
becoming Specially Serviced Mortgage Loans shall include, without limitation:
(i) Mortgage Loans having a current Debt Service Coverage Ratio that is 80% or
less of the Debt Service Coverage Ratio as of the Cut-off Date or having a Debt
Service Coverage Ratio that is less than 1.00x, (ii) Mortgage Loans as to which
any required inspection of the related Mortgaged Property conducted by the
Servicer indicates a problem that the Servicer determines can reasonably be
expected to materially adversely affect the cash flow generated by such
Mortgaged Property, (iii) Mortgage Loans which have come to the Servicer's
attention in the performance of its duties under this Agreement (without any
expansion of such duties by reason hereof) that (A) any tenant occupying 25% or
more of the space in the related Mortgaged Property has vacated (without being
replaced by a comparable tenant and lease) or been the subject of bankruptcy or
similar proceedings or (B) relate to a borrower or an affiliate that is the
subject of a bankruptcy or similar proceeding, (iv) Mortgage Loans that are at
least one Collection Period delinquent in payment, and (v) Mortgage Loans that
are within 60 days of maturity.
The Special Servicer shall report to the Servicer any of the
foregoing events promptly upon the Special Servicer having knowledge of such
event. In addition, in connection with their servicing of the Mortgage Loans,
the Servicer and the Special Servicer shall provide to each other and to the
Trustee written notice of any event that comes to their knowledge with respect
to a Mortgage Loan or REO Property that the Servicer or the Special Servicer,
respectively, determines, in accordance with Servicing Standards, would have a
material adverse effect on such Mortgage Loan or REO Property, which notice
shall include an explanation as to the reason for such material adverse effect.
(f) At least one Business Day prior to each Servicer
Remittance Date, the Special Servicer shall deliver, or cause to be delivered,
to the Servicer and S&P and, upon the request of any of the Trustee, the
Depositor or any other Rating Agency, to such requesting party, the following
reports with respect to the Specially Serviced Mortgage Loans (and, if
applicable, the related REO Properties), providing the required information as
of the Due Date: (i) a Delinquent Loan Status Report; (ii) an Historical Loss
Estimate Report; (iii) an Historical Loan Modification Report; (iv) an REO
Status Report; (v) Comparative Financial Status Reports with respect to all
Specially Serviced Mortgage Loans; and (vi) a Watch List. Such reports shall be
presented in writing and on a computer readable magnetic medium.
(g) The Special Servicer shall deliver or cause to be
delivered to the Servicer and S&P and, upon the request of any of the Trustee,
the Depositor or any other Rating Agency, to such requesting party, the
following materials, in each case to the extent that such materials or the
information on which they are based have been received by the Special Servicer:
(i) Annually, on or before June 10 of each year,
commencing with June 10, 1997, with respect to each Specially Serviced
Mortgage Loan and REO Mortgage Loan, an Operating Statement Analysis
for the related Mortgaged Property or REO Property as of the end of
the preceding calendar year, together with copies of the operating
statements and rent rolls for the related Mortgaged Property or REO
Property as of the end of the preceding calendar year. The Special
Servicer shall use its best reasonable efforts to obtain said annual
operating statements and rent rolls with respect to each Mortgaged
Property constituting security for a Specially Serviced Mortgage Loan
and each REO Property, which efforts shall include a letter sent to
the related Borrower or other appropriate party each quarter (followed
up with telephone calls) requesting such annual operating statements
and rent rolls until they are received.
(ii) Within 10 days of receipt by the Special
Servicer of any annual operating statements with respect to any
Mortgaged Property relating to a Specially Serviced Mortgage Loan, or
at least six months of operating information with respect to any REO
Property, an NOI Adjustment Worksheet for such Mortgaged Property or
REO Property (with the annual operating statements attached thereto as
an exhibit).
The Special Servicer shall maintain one Operating Statement Analysis report for
each Mortgaged Property securing a Specially Serviced Mortgage Loan and REO
Property. The Operating Statement Analysis report for each Mortgaged Property
which constitutes security for a Specially Serviced Mortgage Loan or is a REO
Property is to be updated by the Special Servicer and such updated report
delivered to the Servicer within ten days after receipt by the Special Servicer
of updated operating statements for each such Mortgaged Property. The Special
Servicer will use the "Normalized" column from the NOI Adjustment Worksheet to
update the Operating Statement Analysis report and will use any operating
statements received with respect to any Mortgaged Property which constitutes
security for a Specially Serviced Mortgage Loan or is a REO Property to update
the Operating Statement Analysis report for such Mortgaged Property, such
updates to be completed and copies thereof sent to the Servicer within ten days
after receipt of the necessary information.
(h) The Trustee shall be entitled to rely conclusively on and
shall not be responsible for the content or accuracy of any information
provided to it by the Servicer or the Special Servicer pursuant to this
Agreement.
SECTION 3.14. Annual Statement as to Compliance.
The Servicer and the Special Servicer (the "reporting
person") each shall deliver to the Trustee, the Depositor and to the Rating
Agencies on or before March 15 of each year, beginning with March 15, 1998, an
Officer's Certificate stating, as to each signatory thereof, (i) that a review
of the activities of the reporting person 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, the reporting person 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 related 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 the Upper-Tier REMIC or Lower-Tier REMIC as a
REMIC from the IRS or any other governmental agency or body.
SECTION 3.15. Annual Independent Public Accountants'
Servicing Report.
On or before March 15 of each year, beginning with March 15,
1998, the Servicer and the Special Servicer (the "reporting person") each at
the reporting person's expense shall cause a firm of nationally recognized
Independent public accountants (who may also render other services to the
reporting person) which is a member of the American Institute of Certified
Public Accountants to furnish a statement (an "Accountant's Statement") to the
Trustee, the Depositor and to the Rating Agencies, to the effect that such firm
has examined certain documents and records relating to the servicing of the
similar mortgage loans under similar agreements and that, on the basis of such
examination conducted substantially in compliance with generally accepted
auditing standards and the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Program for Mortgages serviced for FHLMC, such servicing
has been conducted in compliance with similar agreements except for such
significant exceptions or errors in records that, in the opinion of such firm,
generally accepted auditing standards and the Uniform Single Attestation
Program for Mortgage Bankers or the Audit Program for Mortgages serviced for
FHLMC require it to report, in which case such exceptions and errors shall be
so reported. Each reporting person shall obtain from the related accountants,
or shall prepare, an electronic version of each Accountant's Statement and
provide such electronic version to the Trustee for filing in accordance with
the procedures set forth in Section 3.22 hereof. With respect to any electronic
version of an Accountant's Statement prepared by the reporting person, the
reporting person shall receive written confirmation from the related
accountants that such electronic version is a conformed copy of the original
Accountant's Statement.
SECTION 3.16. Access to Certain Documentation.
The Servicer and 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
Servicer or Special Servicer. Nothing in this Section 3.16 shall detract from
the obligation of the Servicer and Special Servicer to observe any applicable
law prohibiting disclosure of information with respect to the Borrowers, and
the failure of the Servicer and Special Servicer to provide access as provided
in this Section 3.16 as a result of such obligation shall not constitute a
breach of this Section 3.16.
SECTION 3.17. Title and Management of REO Properties
and REO Account Properties.
(a) In the event that title to any Mortgaged Property is
acquired for the benefit of Certificateholders in foreclosure, by deed in lieu
of foreclosure or upon abandonment or reclamation from bankruptcy, the deed or
certificate of sale shall be taken in the name of the Trustee, or its nominee
(which shall not include the Servicer), or a separate trustee or co-trustee, on
behalf of the Trust Fund. The Special Servicer, on behalf of the Trust Fund,
shall dispose of any REO Property within two years after the Trust Fund
acquires ownership of such REO Property for purposes of Section 860G(a)(8) of
the Code, unless (i) the Special Servicer on behalf of the Lower-Tier REMIC has
applied for an extension of such two-year period pursuant to Sections 856(e)(3)
and 860G(a)(8)(A) of the Code, in which case the Special Servicer shall sell
such REO Property within the applicable extension period or (ii) the Special
Servicer seeks and subsequently receives an Opinion of Counsel (which opinion
shall be an expense of the Trust Fund), addressed to the Special Servicer and
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 event such two-year period shall be extended by such additional
specified period subject to any conditions set forth in such Opinion of
Counsel. The Special Servicer, on behalf of the Trust Fund, shall dispose of
any REO Property held by the Trust Fund prior to the last day of such period
(taking into account extensions) by which such REO Property is required to be
disposed of pursuant to the provisions of the immediately preceding sentence in
a manner provided under Section 3.18 hereof. The Special Servicer shall manage,
conserve, protect and operate each REO Property for the Certificateholders
solely for the purpose of its prompt 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)).
(b) The Special Servicer shall have full power and authority,
subject only to the specific requirements and prohibitions of this Agreement,
to do any and all things in connection with any REO Property as are consistent
with the manner in which the Special Servicer manages and operates similar
property owned or managed by the Special Servicer or any of its Affiliates, all
on such terms and for such period as the Special Servicer deems to be in the
best interests of Certificateholders, and, in connection therewith, the Special
Servicer shall agree to the payment of management fees that are consistent with
general market standards. Consistent with the foregoing, the Special Servicer
shall cause or permit to be earned with respect to such REO Property any "net
income from foreclosure property," within the meaning of Section 860G(c) of the
Code, which is subject to tax under the REMIC Provisions only if it has
determined, and has so advised the Trustee in writing, that the earning of such
income on a net after-tax basis could reasonably be expected to result in a
greater recovery on behalf of Certificateholders than an alternative method of
operation or rental of such REO Property that would not be subject to such a
tax. The Special Servicer shall segregate and hold all revenues received by it
with respect to any REO Property separate and apart from its own funds and
general assets and shall establish and maintain with respect to any REO
Property a segregated custodial account (each, an "REO Account"), each of which
shall be an Eligible Account and shall be entitled "LaSalle National Bank, as
Trustee, in trust for Holders of Asset Securitization Corporation, Commercial
Mortgage Pass-Through Certificates, Series 1997-D4, REO Account." The Special
Servicer shall be entitled to withdraw for its account any interest or
investment income earned on funds deposited in an REO Account to the extent
provided in Section 3.07(b). The Special Servicer shall deposit or cause to be
deposited in the REO Account within one Business Day after receipt all revenues
received by it with respect to any REO Property (other than Liquidation
Proceeds), and shall withdraw therefrom funds necessary for the proper
operation, management and maintenance of such REO Property and for other
Property Protection Expenses with respect to such REO Property, including:
(i) all insurance premiums due and payable in respect of any
REO Property;
(ii) all real estate taxes and assessments in respect of any
REO Property that may result in the imposition of a lien
thereon;
(iii) all costs and expenses reasonable and necessary to
protect, maintain, manage, operate, repair and restore any
REO Property; and
(iv) any taxes imposed on the Upper Tier REMIC or Lower-Tier
REMIC in respect of net income from foreclosure property in
accordance with Section 4.05.
To the extent that such REO Proceeds are insufficient for the
purposes set forth in clauses (i) through (iii) above and the Special Servicer
has provided written notice of such shortfall to the Servicer at least five
Business Days prior to the date that such amounts are due, the Servicer shall
advance the amount of such shortfall unless the Servicer determines, in its
good faith judgment, that such Advance would be a Nonrecoverable Advance. If
the Servicer does not make any such Advance in violation of the immediately
preceding sentence, the Trustee shall make such Advance; and if the Trustee
fails to make any such Advance, the Fiscal Agent shall make such Advance,
unless in either case, the Trustee or the Fiscal Agent determines that such
Advance would be a Nonrecoverable Advance. The Trustee and the Fiscal Agent
shall be entitled to rely, conclusively, on any determination by the Servicer
that an Advance, if made, would be a Nonrecoverable Advance. The Trustee and
the Fiscal Agent, in determining whether or not a proposed Advance would be a
Nonrecoverable Advance, shall be subject to the standards applicable to the
Servicer hereunder. The Servicer, the Trustee or the Fiscal Agent, as
applicable, shall be entitled to reimbursement of such Advances (with interest
at the Advance Rate) made pursuant to the preceding sentence, to the extent set
forth in Section 3.06. The Special Servicer shall withdraw from each REO
Account and remit to the Servicer for deposit into the Collection Account on a
monthly basis prior to or on the related Due Date the Net REO Proceeds received
or collected from each REO Property, except that in determining the amount of
such Net REO Proceeds, the Special Servicer may retain in each REO Account
reasonable reserves for repairs, replacements and necessary capital
improvements and other related expenses.
Notwithstanding the foregoing, the Special Servicer shall
not:
(i) permit the Trust Fund to enter into, renew or extend
any New Lease, if the New Lease by its terms will
give rise to any income that does not constitute
Rents from Real Property;
(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 ten
percent 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 allow any Person to Directly
Operate any REO Property on any date more than 90
days after its date of acquisition by the Trust
Fund, unless such Person is an Independent
Contractor;
unless, in any such case, the Special Servicer has requested and received an
Opinion of Counsel addressed to the Special Servicer and the Trustee (which
opinion shall be an expense of the Trust Fund) to the effect that such action
will not cause such REO Property to fail to qualify as "foreclosure property"
within the meaning of Section 860G(a)(8) of the Code (determined without regard
to the exception applicable for purposes of Section 860D(a) of the Code) at any
time that it is held by the Trust Fund, in which case the Special Servicer may
take such actions as are specified in such Opinion of Counsel.
The Special Servicer shall be required to contract with an
Independent Contractor (acceptable to each Rating Agency as evidenced by
written confirmation that contracting with such Independent Contractor would
not, in and of itself cause a downgrade, qualification or withdrawal of the
then current ratings assigned to any Class of Certificates), the fees and
expenses of which shall be an expense of the Trust Fund and payable out of REO
Proceeds, for the operation and management of any REO Property, within 90 days
of the Trust Fund's acquisition thereof (unless the Special Servicer shall have
provided the Trustee with an Opinion of Counsel that the operation and
management of any REO Property other than through an Independent Contractor
shall not cause such REO Property to fail to qualify as "foreclosure property"
within the meaning of Code Section 860G(a)(8)) (which opinion shall be an
expense of the Trust Fund), provided that:
(i) the terms and conditions of any such contract shall be
reasonable and customary for the area and type of property
and shall not be inconsistent herewith;
(ii) any such contract shall require, or shall be
administered to require, that the Independent Contractor pay
all costs and expenses incurred in connection with the
operation and management of such REO Property, including
those listed above, and remit all related revenues (net of
such costs and expenses) to the Special Servicer as soon as
practicable, but in no event later than thirty days following
the receipt thereof by such Independent Contractor;
(iii) none of the provisions of this Section 3.17(b) relating
to any such contract or to actions taken through any such
Independent Contractor shall be deemed to relieve the Special
Servicer of any of its duties and obligations to the Trust
Fund or the Trustee on behalf of the Certificateholders with
respect to the operation and management of any such REO
Property; and
(iv) the Special Servicer shall be obligated with respect
thereto to the same extent as if it alone were performing all
duties and obligations in connection with the operation and
management of such REO Property.
The Special Servicer shall be entitled to enter into any
agreement with any Independent Contractor performing services for it related to
its duties and obligations hereunder for indemnification of the Special
Servicer by such Independent Contractor, and nothing in this Agreement shall be
deemed to limit or modify such indemnification.
(c) Promptly following any acquisition by the Trust Fund of
an REO Property, the Special Servicer shall notify the Servicer thereof, and,
upon receipt of such notice, the Servicer shall obtain an Updated Appraisal
thereof, but only in the event that any Updated Appraisal with respect thereto
is more than 12 months old, in order to determine the fair market value of such
REO Property and shall notify the Depositor, the Special Servicer and the
Trustee hereto of the results of such appraisal. Any such appraisal shall be
conducted in accordance with MAI standards and the cost thereof shall be an
expense of the Trust Fund. The Servicer shall obtain a new Updated Appraisal or
a letter update every 12 months thereafter.
(d) When and as necessary, the Special Servicer shall send to
the Trustee a statement prepared by the Special Servicer setting forth the
amount of net income or net loss, as determined for federal income tax
purposes, resulting from the operation and management of a trade or business
on, the furnishing or rendering of a non-customary service to the tenants of,
or the receipt of any other amount not constituting Rents from Real Property in
respect of, any REO Property in accordance with Sections 3.17(a) and 3.17(b).
SECTION 3.18. Sale of Specially Serviced Mortgage
Loans and REO Properties.
(a) With respect to any Specially Serviced Mortgage Loan or
REO Property which the Special Servicer has determined to sell in accordance
with Section 3.10, the Special Servicer shall deliver to the Trustee an
Officers' Certificate to the effect that pursuant to Section 3.10, the Special
Servicer has determined to sell such Specially Serviced Mortgage Loan or REO
Property in accordance with this Section 3.18. The Special Servicer may then
offer to sell to any Person any Specially Serviced Mortgage Loan or any REO
Property or, subject to the following sentence, purchase any such Specially
Serviced Mortgage Loan or REO Property (in each case at the Repurchase Price
therefor), but shall, in any event, so offer to sell any REO Property no later
than the time determined by the Special Servicer to be sufficient to result in
the sale of such REO Property within the period specified in Section 3.17(a).
The Special Servicer shall deliver such Officers' Certificate and give the
Trustee not less than ten Business Days prior written notice of its intention
to sell any Specially Serviced Mortgage Loan or REO Property, in which case the
Special Servicer shall accept the highest offer (of at least three offers)
received from any Person for any Specially Serviced Mortgage Loan or any REO
Property in an amount at least equal to the Repurchase Price therefor or, at
its option, if it has received no offer at least equal to the Repurchase Price
therefor, purchase the Specially Serviced Mortgage Loan or REO Property at the
Repurchase Price.
In the absence of any such offer or purchase by the Special
Servicer, the Special Servicer shall accept the highest offer received from any
Person that is determined by the Special Servicer to be a fair price, as
determined in accordance with Section 3.18(b), for such Specially Serviced
Mortgage Loan or REO Property, if the highest offeror is a Person other than an
Interested Person, or is determined to be a fair price by the Trustee in
accordance with Section 3.18(b), if the highest offeror is an Interested
Person; provided, that the Trustee shall be entitled to engage, at the expense
of the Trust Fund, an Independent appraiser to determine whether the highest
offer is a fair price and, further provided, that if the highest offeror is an
Interested Person such offer shall not be accepted if it is less than the
Repurchase Price, unless the Rating Agencies have confirmed, in writing, that
such acceptance will not, in itself, result in the qualification, downgrade or
withdrawal of the then-current ratings assigned to the Certificates.
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.
The Special Servicer shall not be obligated by either of the
foregoing paragraphs or otherwise to accept the highest offer if the Special
Servicer determines, in accordance with the Servicing Standard, that rejection
of such offer would be in the best interests of the Certificateholders. In
addition, the Special Servicer may accept a lower offer if it determines, in
accordance with the Servicing Standard, that acceptance of such offer would be
in the best interests of the Certificateholders (for example, if the
prospective buyer making the lower offer is more likely to perform its
obligations, or the terms offered by the prospective buyer making the lower
offer are more favorable), provided that the offeror is not an Affiliate of the
Special Servicer. In the event that the Special Servicer determines with
respect to any REO Property that the offers being made with respect thereto are
not in the best interests of the Certificateholders and that the end of the
two-year period referred to in Section 3.17(a) with respect to such REO
Property is approaching, the Special Servicer shall seek an extension of such
two-year period in the manner described in Section 3.17(a); provided, however,
that the Special Servicer shall use its best efforts, consistent with the
Servicing Standard, to sell any REO Property prior to the Rated Final
Distribution Date.
(b) In determining whether any offer received from an
Interested Person represents a fair price for any Specially Serviced Mortgage
Loan or any REO Property, the Trustee may conclusively rely on the opinion of
an Independent appraiser or other Independent expert in real estate matters
retained by the Trustee at the expense of the Trust Fund. In determining
whether any offer constitutes a fair price for any Specially Serviced Mortgage
Loan or any REO Property, the Special Servicer (if the highest offeror is not
an Interested Person) 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, as applicable, among other factors,
any Updated Appraisal previously obtained, the period and amount of any
delinquency on the affected Specially Serviced Mortgage Loan, the physical
(including environmental) condition of the related Mortgaged Property or such
REO Property, the state of the local economy and the Trust Fund's obligation to
dispose of any REO Property within the time period specified in Section
3.17(a).
(c) Subject to the provisions of Section 3.17, the Special
Servicer shall act on behalf of the Trust Fund in negotiating and taking any
other action necessary or appropriate in connection with the sale of any
Specially Serviced Mortgage Loan or REO Property, including the collection of
all amounts payable in connection therewith. Any sale of a Specially Serviced
Mortgage Loan or any REO Property shall be without recourse to, or
representation or warranty by, the Trustee, the Fiscal Agent, the Depositor,
the Servicer, the Special Servicer or the Trust Fund (except that any contract
of sale and assignment and conveyance documents may contain customary
warranties of title, so long as the only recourse for breach thereof is to the
Trust Fund), and, if such sale is consummated in accordance with the duties of
the Special Servicer, the Servicer, the Depositor, the Fiscal Agent 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 the Special Servicer
or, if the offeror is an Interested Person, the Servicer (or the Trustee, if
the Servicer is an offeror).
(d) The Special Servicer shall file information returns
regarding the abandonment or foreclosure of Mortgaged Properties with the IRS
at the time and in the manner required by the Code.
(e) The proceeds of any sale after deduction of the expenses
of such sale incurred in connection therewith shall be promptly, and in any
event within one Business Day following receipt thereof, deposited in the
Collection Account in accordance with Section 3.05(a)(iv).
SECTION 3.19. Additional Obligations of the Servicer
and Special Servicer; Inspections.
(a) The Servicer (or, with respect to Specially Serviced
Mortgage Loans and REO Properties, the Special Servicer) shall inspect or cause
to be inspected (at its own expense) each Mortgaged Property at such times and
in such manner as are consistent with the Servicing Standard, but in any event
shall inspect each Mortgaged Property with an Allocated Loan Amount of (A)
$2,000,000 or more at least once every 12 months and (B) less than $2,000,000
at least once every 24 months, in each case commencing in May 1997 (or at such
lesser frequency as each Rating Agency shall have confirmed in writing to the
Servicer, will not result a downgrade, qualification or withdrawal of the then
current ratings assigned to any Class of the Certificates) and (C) if the
Mortgage Loan (i) becomes a Specially Serviced Mortgage Loan, (ii) has a debt
service coverage ratio of less than 1.0 or (iii) is delinquent for 60 days,
each related Mortgaged Property shall be inspected by the Special Servicer as
soon as practicable and thereafter at least every 12 months for so long as such
condition exists. The Servicer or Special Servicer, as applicable, shall send
to the Rating Agencies, within 20 days of completion, each inspection report.
(b) With respect to each Mortgage Loan, the Servicer (or the
Special Servicer, in the case of a Specially Serviced Mortgage Loan) shall
enforce the Trustee's rights with respect to the Manager under the related Loan
Documents and Management Agreement, provided, that, if such right accrues under
the related Loan Documents or Management Agreement only because of the
occurrence of the related Anticipated Repayment Date, if any, the Servicer (or
Special Servicer, if applicable) shall irrevocably waive such right with
respect to such date. In the event the Servicer (or Special Servicer, as
applicable) is entitled to terminate the Manager, the Servicer (or Special
Servicer, as applicable) shall promptly give notice to the Trustee (who shall
copy the Certificateholders), the Originator, the Depositor, and each Rating
Agency. After receipt of such notice, the most subordinate Class of
Certificates then outstanding shall have the right to recommend termination of
the Manager, and if so, to recommend a Successor Manager (meeting the
requirements set forth below). Certificateholders representing Percentage
Interests of greater than 50% of such subordinate Class of Certificates will
have ten Business Days from the receipt of such notice to respond to such
notice. Upon receipt of a recommendation to terminate the Manager and appoint a
Successor Manager, the Servicer (or Special Servicer, as applicable) shall give
notice of such recommendation to the Trustee (who shall copy the
Certificateholders), and the Servicer (or Special Servicer, as applicable)
shall effect such recommendation unless: (i) within five Business Days of the
receipt of notice of such recommendation, Certificateholders representing
Percentage Interests of greater than 50% of any Class of Certificates then
outstanding which was assigned a rating by any Rating Agency on the Closing
Date reject such proposed Successor Manager in which case the Servicer (or
Special Servicer, as applicable) shall procure a Successor Manager as set forth
in the following sentence; or (ii) the Servicer (or Special Servicer, as
applicable) determines that effecting such recommendation to terminate is not
consistent with the Servicing Standard, the Servicer (or Special Servicer, as
applicable) shall only effect such recommendation if within 30 days of giving
notice to all other Holders the Servicer (or Special Servicer, as applicable)
has not received a rejection of such recommendation from Holders of
Certificates representing Voting Rights of greater than 50% of any Class of
Certificates then outstanding which is assigned a rating by any Rating Agency
on the Closing Date. If the Servicer (or Special Servicer, as applicable) does
not receive a required response (or if the response received is inconsistent)
or in the event a Manager is otherwise terminated or resigns under the related
Mortgage or Management Agreement and the related Borrower does not appoint a
Successor Manager, the Servicer (or Special Servicer, as applicable) shall use
its best efforts to retain a Successor Manager (or the recommended Successor
Manager, if any) on terms substantially similar to the Management Agreement or,
failing that, on terms as favorable to the Trust Fund as can reasonably be
obtained by the Servicer (or Special Servicer, as applicable). For the purposes
of this paragraph, a "Successor Manager" shall be reasonably acceptable to the
Servicer (or Special Servicer, as applicable) and a professional management
corporation or business entity which (i) manages, and is experienced in
managing, other comparable commercial properties, (ii) will not result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
the Certificates by each of Fitch, ▇▇▇▇▇'▇ and S&P, and, if the Mortgage Loan
represents greater than 2% of the aggregate Stated Principal Balances of the
Mortgage Loan, DCR and (iii) otherwise satisfies any criteria set forth in the
Mortgage and related documents.
SECTION 3.20. 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 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 Servicer, having a combined capital and surplus of at least
$15,000,000, authorized under such laws to do a trust business and subject to
supervision or examination by federal or state authorities. The Trustee shall
serve as the initial Authenticating Agent and the Trustee hereby accepts such
appointment.
Any corporation into which the Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the
Authenticating Agent shall be party, or any corporation 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 and the 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 and the 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 3.20, the Trustee promptly shall appoint a successor
Authenticating Agent, which shall be acceptable to the 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 3.20.
The Authenticating Agent shall have no responsibility or
liability for any action taken by it as such at the direction of the Trustee.
Any reasonable compensation paid to the Authenticating Agent shall be an
unreimbursable expense of the Trustee.
SECTION 3.21. 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 debt rating of at least "BBB" from Fitch, S&P and DCR and "Baa2" from
▇▇▇▇▇'▇ , unless the Trustee shall have received prior written confirmation
from each Rating Agency that the appointment of such Custodian would not cause
such Rating Agency to withdraw, qualify or downgrade any of its then-current
ratings on the Certificates, and shall be qualified to do business in the
jurisdiction in which it holds any Mortgage File. Each Custodial Agreement may
be amended only as provided in Section 10.07. Any reasonable compensation paid
to the Custodian shall be an unreimbursable expense of the Trustee. The Trustee
shall serve as the initial Custodian. The Custodian 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 Custodian. In addition, the Custodian shall
keep in force during the term of this Agreement a policy or policies of
insurance covering loss occasioned by the errors and omissions of its officers
and employees in connection with its obligations hereunder in the form and
amount that are customary for securitizations similar to the securitization
evidenced by this Agreement, with the Trustee named as loss payee. All fidelity
bonds and policies of errors and omissions insurance obtained under this
Section 3.21 shall be issued by a Qualified Insurer.
SECTION 3.22. Reports to the Securities and Exchange
Commission; Available Information.
(a) The Servicer shall prepare and sign, on behalf of the
Depositor, any and all Exchange Act Reports; provided, however, that (i) the
Depositor shall prepare, sign and file with the Commission the initial Form 8-K
relating to the Trust Fund and (ii) the Special Servicer shall prepare and sign
on behalf of the Depositor any Exchange Act Report which includes an Annual
Compliance Report relating to the Special Servicer. Each Exchange Act Report
consisting of a monthly Distribution Date Statement, Comparative Financial
Status Report, Delinquent Loan Status Report, Historical Loss Estimate Report,
Historical Loan Modification Report, REO Status Report, Operating Statement
Analysis, NOI Adjustment Worksheet, Watch List, or report pursuant to Section
4.02(b)(i) shall be prepared as an exhibit or exhibits to a Form 8-K. Each
Exchange Act Report consisting of an Annual Compliance Report shall be prepared
as exhibits to an Annual Report on Form 10-K and shall identify the aggregate
number of Holders of Public Certificates and Direct Participants holding
positions in Public Certificates as of December 31 (or the nearest Business Day
if such date is not a Business Day) of the related year based on information
provided by the Trustee. The Trustee shall provide the Servicer and the Special
Servicer with a list of Certificateholders and Direct Participants holding
Public Certificates as of December 31 of the related year no later than two
Business Days prior to the date on which the Servicer or Special Servicer, as
applicable, is required to deliver the related Exchange Act Report to the
Trustee. For each Exchange Act Report, the Servicer or the Special Servicer, as
applicable, shall prepare (i) a manually-signed paper version of such report
and (ii) an electronic version of such report, which version shall be prepared
as a Microsoft Word for Windows file (or in such other format as the Trustee,
the Depositor and the Servicer or the Special Servicer may agree), provided,
that, with respect to the electronic version of each Exchange Act Report
consisting of a monthly Distribution Date Statement, the Servicer need only
deliver an electronic version of the related Form 8-K and the Trustee shall
attach an electronic version of the related monthly Distribution Date Statement
thereto as an exhibit. Exchange Act Reports consisting of (i) a monthly
Distribution Date Statement shall be filed within ten days after the related
Distribution Date; (ii) a Comparative Financial Status Report, Delinquent Loan
Status Report, Historical Loss Estimate Report, Historical Loan Modification
Report, REO Status Report, Operating Statement Analysis, NOI Adjustment
Worksheet, Watch List, or report pursuant to Section 4.02(b)(i) shall be filed
within ten days after each Distribution Date; and (iii) an Annual Compliance
Report shall be filed on or prior to March 15 of each calendar year. Electronic
versions of each Exchange Act Report shall be delivered to the Trustee on a
computer diskette (delivered by courier in packaging designed to shield such
diskette from damage in transmission) or by means of electronic data transfer
system mutually agreed upon by the Trustee and the Servicer or Special
Servicer. The Trustee shall forward each Exchange Act Report to the Depositor
in a manner and in a format agreed upon by the Trustee and the Depositor.
Manually-signed copies of each Exchange Act Report shall be delivered to the
Depositor to the attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (or such other Persons as are
designated in writing by the Depositor), with a copy to the Trustee.
If information for any Exchange Act Report is incomplete by
the date on which such report is required to be filed under the Exchange Act,
the Servicer or, with respect to any Annual Compliance Report relating to the
Special Servicer, the Special Servicer shall prepare and execute a Form 12b-25
under the Exchange Act and shall deliver an electronic version of such form to
the Trustee for forwarding to the Depositor as provided above. The Servicer or
the Special Servicer, as applicable, shall deliver the related report in
electronic form to the Trustee when such information is available and such
completed report shall be forwarded electronically by the Trustee to the
Depositor.
None of the Servicer, the Special Servicer and the Trustee
shall (i) file a Form ID with respect to the Depositor or (ii) cause the Trust
Fund to stop filing reports, statements and information with the Commission
pursuant to this Section unless directed to do so by the Depositor or the
continued reporting is prohibited under the Exchange Act or any regulations
thereunder. Upon the written request of the Depositor, the Servicer shall file
a Form 15 relating to the Trust Fund with the Commission and send a copy
thereof to the Trustee and the Depositor.
The Trustee shall solicit any and all proxies of the
Certificateholders whenever such proxies are required to be solicited pursuant
to the Exchange Act.
(b) [Intentionally left blank].
(c) The Servicer shall, in accordance with such reasonable
rules and procedures as it may adopt (which may include the requirement that an
agreement that provides that such information shall be used solely for purposes
of evaluating the investment characteristics of the Certificates be executed to
the extent the Servicer deems such action to be necessary or appropriate), also
make available any additional information relating to the Mortgage Loans, the
Mortgaged Properties or the Borrowers, for review by the Depositor, the Rating
Agencies and any other Persons to whom the Servicer believes such disclosure is
appropriate, in each case except to the extent doing so is prohibited by
applicable law or by any related Loan Documents related to a Mortgage Loan.
(d) [Intentionally left blank].
The Servicer and the Special Servicer shall make available at
its offices during normal business hours, or send to the requesting party at
the expense of each such requesting party (other than the Rating Agencies and
the Depositor) for review by the Depositor, the Trustee, the Rating Agencies,
any Certificateholder, any Person identified to the Servicer or the Special
Servicer, as applicable, by a Certificateholder as a prospective transferee of
a Certificate and any other Persons to whom the Servicer or the Special
Servicer, as applicable, believes such disclosure to be appropriate the
following items: (i) all financial statements, occupancy information, rent
rolls, retail sales information, average daily room rates and similar
information received by the Servicer or the Special Servicer, as applicable,
from each Borrower, (ii) the inspection reports prepared by or on behalf of the
Servicer or the Special Servicer, as applicable, in connection with the
property inspections pursuant to Section 3.19, (iii) any and all modifications,
waivers and amendments of the terms of a Mortgage Loan entered into by the
Servicer or the Special Servicer, as applicable and (iv) any and all officer's
certificates and other evidence delivered to the Trustee and the Depositor to
support the Servicer's determination that any Advance was, or if made would be,
a Nonrecoverable Advance. Copies of any and all of the foregoing items shall be
available from the Servicer or the Special Servicer, as applicable, or the
Trustee, as applicable, upon request. However, all such items set forth in
(i)-(iv) shall be delivered to DCR without request (and, to the extent
available, electronically), except that, with respect to clause (i), only
annual reports and statements shall be sent without request.
(e) Notwithstanding the obligations of the Servicer set forth
in the preceding provisions of this Section 3.22, the Servicer may withhold any
information not yet included in a Form 8-K filed with the Commission or
otherwise made publicly available with respect to which the Trustee or the
Servicer has determined that such withholding is appropriate.
(f) Notwithstanding any provisions in this Agreement to the
contrary, the Trustee shall not be required to review the content of any
Exchange Act Report for compliance with applicable securities laws or
regulations, completeness, accuracy or otherwise, and the Trustee shall have no
liability with respect to any Exchange Act Report filed with the Commission or
delivered to Certificateholders. None of the Servicer, the Special Servicer and
the Trustee shall be responsible for the accuracy or completeness of any
information supplied by a Borrower or a third party for inclusion in any Form
8-K, and each of the Servicer, the Special Servicer 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. None of the Trustee, the
Special Servicer and the Servicer shall have any responsibility or liability
with respect to any Exchange Act Report filed by the Depositor, and each of the
Servicer, the Special Servicer 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.
SECTION 3.23. Lock-Box Accounts, Cash Collateral
Accounts, Escrow Accounts and Reserve
Accounts.
The Servicer shall administer each Lock-Box Account, Cash
Collateral Account, Escrow Account and Reserve Account in accordance with the
related Mortgage or Loan Agreement, Cash Collateral Account Agreement or
Lock-Box Agreement, if any.
SECTION 3.24. Property Advances.
(a) The Servicer (or, to the extent provided in Section
3.24(b), the Trustee or the Fiscal Agent or to the extent specifically provided
for in this Agreement, the Special Servicer) shall make any Property Advances
as and to the extent otherwise required pursuant to the terms hereof. For
purposes of distributions to Certificateholders and compensation to the
Servicer, Special Servicer or Trustee, Property Advances shall not be
considered to increase the principal balance of any Mortgage Loan,
notwithstanding that the terms of such Mortgage Loan so provide.
(b) The Servicer shall notify the Trustee and the Fiscal
Agent, and the Special Servicer shall notify the Servicer, the Trustee and the
Fiscal Agent, in writing promptly upon, and in any event within one Business
Day after, becoming aware that it will be 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 will 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 the date for payment has passed or
if no such date is specified, then within five Business Days following such
notice, the Trustee (or with respect to a Property Advance required to be made
by the Special Servicer, the Servicer, and if the Servicer so fails, the
Trustee), subject to the provisions of Section 3.24(c), 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, subject to the provisions of Section 3.24(c),
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) None of the Servicer, the Trustee, the Fiscal Agent or
the Special Servicer shall be obligated to make a Property Advance as to any
Mortgage Loan or REO Property if the Servicer, the Trustee, the Fiscal Agent or
the Special Servicer, as applicable, determines that such Advance will be a
Nonrecoverable Advance. The Trustee and the Fiscal Agent (or the Servicer with
respect to a Property Advance required to be made by the Special Servicer)
shall be entitled to rely, conclusively, on any determination by the Servicer
or Special Servicer, as applicable, 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 Servicer hereunder.
(d) The Servicer, the Special Servicer, the Trustee and/or
the Fiscal Agent, as applicable, shall be entitled to the reimbursement of
Property Advances made by any of them to the extent permitted pursuant to
Section 3.06(ii) of this Agreement, together with any related Advance Interest
Amount in respect of such Property Advances, and the Servicer and Special
Servicer hereby covenant and agree to promptly seek and effect the
reimbursement of such Property Advances from the related Borrowers to the
extent permitted by applicable law and the related Loan Documents.
SECTION 3.25. Appointment of Special Servicer.
(a) The Servicer is hereby appointed as the initial Special
Servicer to service each Specially Serviced Mortgage Loan.
(b) Certificateholders representing greater than 50% of the
Percentage Interests of the most subordinate Class of Certificates outstanding
at any time shall be entitled to remove the Special Servicer with or without
cause and to appoint a successor Special Servicer, provided that each Rating
Agency confirms to the Trustee in writing that such appointment, in and of
itself, would not have caused a downgrade, qualification or withdrawal of the
then current ratings assigned to any Class of Certificates. If there is a
Special Servicer Event of Default, the Special Servicer shall be removed and
replaced pursuant to Sections 7.01(c) and 7.02.
(c) The appointment of any such successor Special Servicer,
shall not relieve the Servicer, the Trustee or the Fiscal Agent of their
respective obligations to make Advances as set forth herein; provided, however,
the Servicer shall not be liable for any actions or any inaction of such
successor Special Servicer. Any termination fee payable to the terminated
Special Servicer (and it is acknowledged that there is no such fee payable in
the event of a termination of the Servicer as Special Servicer or in the event
of a termination for breach of this Agreement) shall be paid by the
Certificateholders so terminating the Special Servicer and shall not in any
event be an expense of the Trust Fund.
(d) No termination of the Special Servicer and appointment of
a successor Special Servicer shall be effective until the successor Special
Servicer has assumed all of its responsibilities, duties and liabilities
hereunder pursuant to a writing satisfactory to the Trustee and each Rating
Agency, as evidenced in writing, and the Trustee has received written
confirmation from each Rating Agency that such appointment would not cause any
Rating Agency to qualify, withdraw or downgrade any of its then current ratings
on any Certificates. Any successor Special Servicer shall make the
representations and warranties provided for in Section 2.04(a) mutatis
mutandis.
SECTION 3.26. Transfer of Servicing Between Servicer
and Special Servicer; Record Keeping.
(a) Upon determining that any Mortgage Loan has become a
Specially Serviced Mortgage Loan, the Servicer shall immediately give notice
thereof, to the Special Servicer and shall use its best efforts to provide the
Special Servicer with all information, documents (but excluding the original
documents constituting the Mortgage File) and records (including records stored
electronically on computer tapes, magnetic discs and the like) relating to the
Mortgage Loan and reasonably requested by the Special Servicer to enable it to
assume its duties hereunder with respect thereto without acting through a
sub-servicer. The 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 Servicer and administrator of such Mortgage Loan until the Special
Servicer has commenced the servicing of such Mortgage Loan, which shall occur
upon the receipt by the Special Servicer of the information, documents and
records referred to in the preceding sentence. With respect to each Mortgage
Loan that becomes a Specially Serviced Mortgage Loan, the Servicer shall
instruct the related Borrower to continue to remit all payments in respect of
such Mortgage Loan to the Servicer. If AMRESCO Management, Inc. ceases to be
the Servicer or the Special Servicer, respectively, the remaining party of the
two and the successor Servicer or Special Servicer, as applicable, may agree
that, notwithstanding the preceding sentence, with respect to each Mortgage
Loan that became a Specially Serviced Mortgage Loan, the Servicer shall
instruct the related Borrower to remit all payments in respect of such Mortgage
Loan to the Special Servicer, provided that the payee in respect of such
payments shall remain the Servicer. The Special Servicer shall remit to the
Servicer any such payments received by it pursuant to the preceding sentence
within one Business Day of receipt. The Servicer shall forward any notices it
would otherwise send to the Borrower of a Specially Serviced Mortgage Loan to
the Special Servicer who shall send such notice to the related Borrower.
Upon determining that no event has occurred and is continuing
with respect to a Mortgage Loan that causes such Mortgage Loan to be a
Specially Serviced Mortgage Loan, the Special Servicer shall immediately give
notice thereof to the Servicer, and upon giving such notice, such Mortgage Loan
shall cease to be a Specially Serviced Mortgage Loan in accordance with the
first proviso of the definition of Specially Serviced Mortgage Loan, the
Special Servicer's obligation to service such Mortgage Loan shall terminate and
the obligations of the Servicer to service and administer such Mortgage Loan as
a Mortgage Loan that is not a Specially Serviced Mortgage Loan shall resume. In
addition, if the related Borrower has been instructed, pursuant to the last
sentence of the preceding paragraph, to make payments to the Special Servicer,
upon such determination, the Special Servicer shall instruct the related
Borrower to remit all payments in respect of such Specially Serviced Mortgage
Loan directly to the Servicer.
(b) In servicing any Specially Serviced Mortgage Loan, the
Special Servicer shall provide to the Trustee originals of documents included
within the definition of "Mortgage File" for inclusion in the related Mortgage
File (to the extent such documents are in the possession of the Special
Servicer) and copies of any additional related Mortgage Loan information,
including correspondence with the related Borrower, and the Special Servicer
shall promptly provide copies of all of the foregoing to the Servicer as well
as copies of any analysis or internal review prepared by or for the benefit of
the Special Servicer.
(c) Not later than the Business Day preceding each date on
which the Servicer is required to furnish a report under Section 3.13(a) to the
Trustee, the Special Servicer shall deliver to the Trustee, with a copy to the
Servicer, a written statement describing, on a Mortgage Loan by Mortgage Loan
basis, (i) the amount of all payments on account of interest received on each
Specially Serviced Mortgage Loan, the amount of all payments on account of
principal, including Principal Prepayments, on each Specially Serviced Mortgage
Loan, the amount of Net Insurance Proceeds and Net Liquidation Proceeds
received with respect to each Specially Serviced Mortgage Loan, and the amount
of net income or net loss, as determined from 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 rental income that does not constitute Rents from Real
Property with respect to the REO Property relating to each applicable Specially
Serviced Mortgage Loan, in each case in accordance with Section 3.17 and (ii)
such additional information relating to the Specially Serviced Mortgage Loans
as the Servicer or Trustee reasonably requests to enable it to perform its
duties under this Agreement.
(d) Notwithstanding the provisions of the preceding
subsection (c), the Servicer shall maintain ongoing payment records with
respect to each of the Specially Serviced Mortgage Loans and shall provide the
Special Servicer with any information reasonably required by the Special
Servicer to perform its duties under this Agreement. The Special Servicer shall
provide the Servicer with any information reasonably required by the Servicer
to perform its duties under this Agreement.
(e) The Servicer shall furnish to the Special Servicer a
current copy of any "watch list" that it maintains with respect to the Mortgage
Loans.
SECTION 3.27. Interest Reserve Account.
(a) On each Servicer Remittance Date relating to any Interest
Accrual Period ending in any February and on any Servicer Remittance Date
relating to any Interest Accrual Period ending in any January which occurs in a
year which is not a leap year, the Servicer shall remit to the Trustee, in
respect of the Interest Reserve Loans, for deposit into the Interest Reserve
Account, an amount equal to one day's interest on the Stated Principal Balance
of the Interest Reserve Loans as of the Due Date occurring in the month
preceding the month in which such Servicer Remittance Date occurs at the
related Mortgage Rate, to the extent a full Monthly Payment or P&I Advance is
made in respect thereof (all amounts so deposited in any consecutive January
and February, "Withheld Amounts").
(b) On each Servicer Remittance Date occurring in March, the
Servicer shall withdraw from the Interest Reserve Account an amount equal to
the Withheld Amounts from the preceding January, if any, and February and
deposit such amount into the Distribution Account.
SECTION 3.28. Limitations on and Authorizations of the
Servicer and Special Servicer with
Respect to Certain Mortgage Loans.
(a) Prior to taking any action with respect to a Mortgage
Loan secured by Mortgaged Properties located in a "one-action" state, the
Servicer or Special Servicer, as applicable, shall consult with legal counsel,
the fees and expenses of which shall be an expense of the Trust Fund.
(b) With respect to any Mortgage Loan which permits the
related Borrower, with the consent or grant of a waiver by mortgagee, to incur
additional indebtedness or to amend or modify the related Borrower's
organizational documents, then the Special Servicer may only consent to either
such action, or grant a waiver with respect thereto, if the Special Servicer
determines that such consent or waiver is likely to result in a greater
recovery on a present value basis (discounted at the related Mortgage Rate)
than would not consenting to such action and the Special Servicer first obtains
written confirmation from each Rating Agency that such consent or grant of a
waiver would not, in and of itself, result in a downgrade, qualification or
withdrawal of any of the then current ratings assigned to the Certificates. The
Servicer shall not be entitled or required to consent to, or grant a waiver
with respect to, either action.
(c) With respect to the Mortgage Loans that require the
related Borrower to pay Rating Agency monitoring or review fees, the Servicer
shall enforce the obligation of the related Borrowers to pay Rating Agency
monitoring or review fees and shall remit such fees from the related Cash
Collateral Account for payment of such fees to the applicable Rating Agencies.
The Servicer shall receive bills from the Rating Agencies for monitoring,
review and surveillance of the Certificates and the Mortgage Loans on behalf of
Nomura Securities International, Inc. and shall promptly notify and send such
bills to Nomura Securities International, Inc., Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇.
Nomura Securities International, Inc. will notify each Rating Agency to ▇▇▇▇
▇▇▇▇▇▇ Securities International, Inc. for such services and to send such bills
to the Servicer. Nomura Securities International, Inc. will pay such portion of
the ▇▇▇▇ not paid from funds provided by the applicable Borrowers (as described
in this section (c)) and the Servicer shall notify Nomura Securities
International, Inc., of the portion of the ▇▇▇▇ that it has paid from funds
collected from such Borrowers.
(d) With respect to the Mortgage Loan secured by the
Mortgaged Property known as Marina Harbor Apartments and Anchorage, if a
material payment default has occurred on the related maturity date or, if in
the Servicer's reasonable and good faith judgment, a default in respect of
payment on such Mortgage Loan on the maturity date is reasonably foreseeable
then, notwithstanding Section 3.10 or Section 3.30 hereof, the Servicer shall
extend the term of such Mortgage Loan to the last day of the related
amortization schedule provided that such modification shall contain provisions
substantially similar to the provisions contained in the Mortgage Loans which
have Anticipated Repayment Dates with respect to (i) the application of all
excess Cash Flow to principal, (ii) Excess Interest and (iii) lockboxes has
been executed.
(e) With respect to all Mortgage Loans that provide that the
holder of the related Note may apply the monthly payment against principal,
interest and any other sums due in the order as the holder shall determine, the
Servicer shall apply such Monthly Payment to interest (other than Excess
Interest or Default Interest) under the related Mortgage Loan prior to
application to principal or any other sums due.
(f) With respect to the Mortgage Loans that have Anticipated
Repayment Dates, the Servicer (including the Servicer in its capacity as a
Certificateholder, if applicable), shall not take any enforcement action with
respect to the payment of Excess Interest or principal in excess of the
principal component of the constant Monthly Payment, other than requests for
collection, until the maturity date of the related Mortgage Loan.
(g) To the extent not inconsistent with the related Mortgage
Loan, the Servicer shall not consent to a change of franchise affiliation with
respect to a Mortgaged Property unless it obtains written confirmation from
Fitch, S&P, DCR and ▇▇▇▇▇'▇ that such consent would not, in and of itself,
result in a downgrade, qualification or withdrawal of the then current ratings
assigned to the Certificates.
(h) With respect to the Mortgaged Property known as the
Residence Inn-▇▇▇▇▇▇▇, the Servicer shall require the related borrower to
implement a lockbox if the property manager in place as of the date hereof is
replaced.
(i) With respect to the Mortgage Loans that have Anticipated
Repayment Dates, the Servicer shall be permitted, in its discretion, to waive
all or any accrued Excess Interest if, prior to the related maturity date, the
related Borrower has requested the right to prepay the Mortgage Loan in full
together with all payments required by the Mortgage Loan in connection with
such prepayment except for all or a portion of accrued Excess Interest,
provided that the Servicer's determination to waive the right to such accrued
Excess Interest is reasonably likely to produce a greater payment to
Certificateholders on a present value basis than a refusal to waive the right
to such Excess Interest. Any such waiver shall not be effective until such
prepayment is tendered. The Servicer will have no liability to the Trust Fund,
the Certificateholders or any other person so long as such determination is
based on such criteria. Other than pursuant to Section 3.30, the Special
Servicer shall have no right to waive the payment of Excess Interest under the
circumstances described in this Section 3.28(i).
(j) With respect to the Mortgage Loans that (i) require
earthquake insurance, or (ii) (A) at the date of origination were secured by
Mortgaged Properties on which the related Borrower maintained earthquake
insurance and (B) have provisions which enable the Servicer to continue to
require the related Borrower to maintain earthquake insurance, the Servicer
shall require the related Borrower to maintain such insurance in the amount, in
the case of clause (i), required by the Mortgage Loan and in the amount, in the
case of clause (ii), maintained at origination, in each case, to the extent
such amounts are available at commercially reasonable rates. Any determination
by the Servicer that such insurance is not available at commercially reasonable
rates shall be subject to confirmation by Fitch that such determination not to
purchase such insurance will not result in a downgrade, qualification or
withdrawal of the then current ratings assigned to the Certificates rated by
Fitch.
(k) The Servicer shall send written notice to each Borrower
and the related Manager and clearing bank that, if applicable, the Servicer
and/or the Trustee has been appointed as the "Designee" of the "Lender" under
any related Lock-Box Agreement.
(l) With respect to any Mortgage Loan secured by a hotel the
Special Servicer shall hire a consultant which is experienced in the operation
of hotels in the event that such Mortgage Loan becomes a Specially Serviced
Mortgage Loan.
(m) With respect to the $2,000,000 reserve established by the
borrower with respect to the Sunwest Pool Properties known as Facility Number
5859 and Facility Number 7055, the Servicer shall in accordance with terms of
the Mortgage Loan not release the $2,000,000 to the borrower, except for
testing and remediation, unless and until the environmental issues disclosed in
the related environmental reports with respect to those two properties have
been resolved. If there is an event of default under the related Mortgage Loan,
and the Servicer, in its reasonable judgment, determines that the Trust Fund
may become liable due to such environmental hazards, the Servicer may in
accordance with terms of the Mortgage Loan apply the funds remaining in such
reserve to pay down the related Mortgage Loan in an amount equal to the
Allocated Loan Amount for such properties, and obtain an immediate release of
such properties from the lien of the related Mortgage Loan.
(n) For any Specially Serviced Mortgage Loan and with respect
to which, under the terms of the related Loan Documents, the mortgagee may, in
its discretion, apply Insurance Proceeds, condemnation awards or escrowed funds
to the prepayment of such loan prior to the expiration of the related Lock-out
Period, the Special Servicer may only make such a prepayment if the Special
Servicer has first received (i) the prior written consent of the Servicer
(which consent will be given or withheld in accordance with the Servicing
Standard) or (ii) the affirmative vote in favor of such prepayment from 66 2/3%
of the Voting Rights of all Certificateholders or 66 2/3% of the Voting Rights
of all Certificateholders responding within 20 Business Days of being given
notice by the Trustee of such proposed action. Upon the written request of the
Special Servicer, the Trustee shall forward Certificateholders any request of
the Special Servicer for the vote of the Certificateholders pursuant to this
Section.
(o) If any Mortgage Loan provides that the "Lender" with
respect thereto is required to purchase U.S. government obligations on behalf
of the related Borrower in connection with any defeasance of the related Note,
the Servicer shall purchase such obligations and effectuate such defeasance, at
the Borrower's expense, in accordance with the provisions of the related Loan
Documents, consistent with the Servicing Standard.
SECTION 3.29. [Intentionally left Blank].
SECTION 3.30. Modification, Waiver, Amendment and Consents.
(a) The Special Servicer may, consistent with the Servicing
Standard, agree to any modification, waiver or amendment of any term of any
Mortgage Loan, subject, however, to each of the following limitations,
conditions and restrictions:
(i) the Special Servicer shall not agree to any modification,
waiver or amendment of any term of, or take any action with
respect to, any Mortgage Loan, if such modification, waiver
or amendment relates to any payment term thereof, the release
of the related Borrower from any material term thereunder or
the release or substitution of collateral therefor except in
accordance with clause (b) or (c) of this Section 3.30; and
(ii) the Special Servicer shall not consent to the
modification of any term of a Mortgage Loan pursuant to this
clause (a), or otherwise alter, delete or add, in whole or in
part, any legal right or obligation of the related Borrower
or the Trustee, as holder of the related Mortgage Loan,
unless such modification would not be a "significant
modification" as such term is defined in Treasury Regulations
Section 1.860G-2(b)(3).
(b) The Special Servicer may, consistent with the Servicing
Standard, agree to any modification, waiver or amendment of any term of,
forgive or defer interest on and principal of, and/or add collateral for, any
Mortgage Loan with the consent of Certificateholders representing 100% of the
Percentage Interests of the most subordinate Class of Certificates then
outstanding determined as provided below, subject, however, to each of the
following limitations, conditions and restrictions:
(i) a material default on such Mortgage Loan has occurred or,
in the Special Servicer's reasonable and good faith judgment,
a default in respect of payment on such Mortgage Loan is
reasonably foreseeable, and such modification, waiver,
amendment or other action is reasonably likely to produce a
greater recovery to Certificateholders on a present value
basis (the relevant discounting of anticipated collections
that will be distributable to Certificateholders will be done
at the related Mortgage Rate), than would liquidation;
(ii) the Special Servicer shall not extend the date on which
any Balloon Payment is scheduled to be due on any Specially
Serviced Mortgage Loan except as provided for below;
(iii) no reduction of any scheduled monthly payment of
principal and/or interest on any Specially Serviced Mortgage
Loan may result in a debt service coverage ratio for such
Mortgage Loan of greater than 1.10 to 1, and the Special
Servicer may only agree to reductions lasting a period of no
more than twelve consecutive months and, in the aggregate, no
more than three consecutive reductions of twelve-months or
less each;
(iv) the Special Servicer shall not release or substitute
collateral or release mortgagors or guarantors except as
provided in clause (v) below;
(v) the Special Servicer may only allow a substitution of
collateral and the assumption of a Borrower's obligations
with respect to a Mortgage Loan in accordance with the terms
thereof and the provisions of Section 3.09 hereof;
(vi) the Special Servicer may not forgive an aggregate amount
of principal of the Mortgage Loans in excess of the
Certificate Principal Balance of the most subordinate Class
of Certificates then outstanding (as determined as provided
below) minus the aggregate of the greater of (A) any
Appraisal Reduction Amounts and (B) Delinquency Reduction
Amounts of each Mortgage Loan that, in each case, have not
resulted in a Realized Loss;
(vii) the Special Servicer shall not permit any Borrower to
add any collateral unless (A) the Special Servicer has first
determined in accordance with the Servicing Standard, based
upon an environmental assessment prepared by an Independent
Person who regularly conducts environmental assessments, at
the expense of the Borrower, that such additional collateral
is in compliance with applicable environmental laws and
regulations and that there are no circumstances or conditions
present with respect to such new collateral relating to the
use, management or disposal of any hazardous materials for
which investigation, testing, monitoring, containment,
clean-up or remediation would be required under any then
applicable environmental laws and/or regulations and (B) the
Special Servicer has received an Opinion of Counsel at the
expense of the Special Servicer or the Borrower (unless the
Special Servicer owns the most subordinate Class of
Certificates in which case, at the expense of the Trust
Fund), to the effect that the addition of such collateral
will not cause either the Upper-Tier REMIC or the Lower-Tier
REMIC to fail to qualify as a REMIC or cause a tax to be
imposed on the Trust Fund under the REMIC Provisions; and
(viii) the Special Servicer may waive or reduce a Lock-out
Period or any Prepayment Premiums only if the commencement of
a foreclosure proceeding with respect to the related Mortgage
Loan is imminent and the Special Servicer first receives
written notification from the Servicer that such action in
the opinion of the Servicer, consistent with the Servicing
Standard and based solely upon information furnished by the
Special Servicer without independent investigation of the
Servicer thereof, is more likely to result in a greater
recovery, on a present value basis, than would a foreclosure.
Notwithstanding the foregoing, the Special Servicer shall not
be required to oppose the confirmation of a plan in any bankruptcy or similar
proceeding involving a Borrower if in its reasonable and good faith judgment
such opposition would not (i) ultimately prevent the confirmation of such plan
or one substantially similar and (ii) produce a greater recovery to
Certificateholders on a present value basis.
For purposes of determining the amount of principal which the
Special Servicer may forgive pursuant to clause (vi) above, the most
subordinate Class shall include the next subordinate Class (determined as
provided in the preceding sentence) provided that Certificateholders evidencing
100% of the Percentage Interests of such Class consent to such forgiveness.
(c) Following a default by a Borrower in the payment of a
Balloon Payment on the related Maturity Date, or if the Special Servicer
reasonably determines that a default with respect to such Balloon Loan is
imminent, the Special Servicer may elect to grant a one-year extension of such
Balloon Loan; provided that the Special Servicer may only extend such Balloon
Loan if (i) immediately prior to the default on the Balloon Payment the related
Borrower had made twelve consecutive Monthly Payments on or prior to their Due
Dates, (ii) the Special Servicer determines in its reasonable judgment that
such Borrower has attempted in good faith to refinance such Balloon Loan or
Mortgaged Property, (iii) the Special Servicer determines that (A) extension of
such Balloon Loan is consistent with the Servicing Standard and (B) extension
of such Mortgage Loan is likely to result in a recovery which on a net present
value basis would be greater than the recovery that would result from a
foreclosure, (iv) such extension requires that all cash flow on all related
Mortgaged Property or Properties in excess of amounts required to operate and
maintain such Mortgaged Property or Properties be applied to payments of
principal and interest on such Balloon Loan and (v) the Special Servicer
terminates the related Manager unless the Special Servicer determines that
retaining such Manager is conducive to maintaining the value of the related
Mortgaged Properties; provided, further, the Special Servicer shall provide
notice to the Trustee (and the Trustee hereby agrees to forward such notice
immediately upon receipt to each Certificateholder) that the Special Servicer
has elected to extend the Balloon Loan and submit a case to the Servicer (an
"Extension Case") and if (A) the Servicer, based on such Extension Case but
without any independent investigation thereof, concurs with such Extension Case
but Holders of Certificates evidencing at least 66-2/3% of the Percentage
Interests of each Class of Certificates entitled to vote direct the Special
Servicer not to extend or (B) the Servicer, based on such Extension Case and
without any independent investigation thereof, does not concur with such
Extension Case and Holders of Certificates evidencing greater than (x) 50% of
the aggregate Voting Rights of all Certificateholders entitled to vote and (y)
66-2/3% of the aggregate Voting Rights of all Certificateholders entitled to
vote who respond to such notice within 30 days, direct the Special Servicer not
to extend, then the Special Servicer shall not extend.
The Special Servicer may, consistent with the Servicing
Standard, grant subsequent one-year extensions of such Balloon Loan if (i) the
related Borrower has made twelve consecutive Monthly Payments in an amount
equal to or greater than the Minimum Defaulted Monthly Payments, (ii) the
requirements set forth in clauses (ii) - (iv) of the preceding paragraph are
satisfied; provided, however, the Special Servicer shall provide notice to the
Trustee (and the Trustee hereby agrees to forward such notice immediately upon
receipt to each Certificateholder) that the Special Servicer has elected to
extend the Balloon Loan and submit an Extension Case to the Servicer and if (A)
the Servicer, based on such Extension Case but without any independent
investigation thereof, concurs with such Extension Case but Holders of
Certificates evidencing at least 66-2/3% of the Percentage Interests of each
Class of Certificates entitled to vote direct the Special Servicer not to
extend or (B) the Servicer, based on such Extension Case and without any
independent investigation thereof, does not concur with such Extension Case and
Holders of Certificates evidencing greater than (x) 50% of the aggregate Voting
Rights of all Certificateholders entitled to vote and (y) 66-2/3% of the
aggregate Voting Rights of all Certificateholders entitled to vote who respond
to such notice within 30 Business Days, direct the Special Servicer not to
extend, then the Special Servicer shall not extend. If the related Borrower
fails to make a timely Minimum Defaulted Monthly Payment more than once during
any two year period after an extension of a Balloon Loan, no further extensions
will be granted.
During the 30 day period after notice of a proposed extension
of a Balloon Loan has been given, each of the Servicer and Special Servicer
shall be permitted to communicate with the Certificateholders regarding its
respective position with respect to such extension. Notwithstanding the
foregoing, the Special Servicer shall not agree to any extension of a Mortgage
Loan beyond two years prior to the Rated Final Distribution Date.
Notwithstanding the foregoing, the Special Servicer may extend a defaulted
payment due on the Maturity Date of a Balloon Loan and grant subsequent
extensions pursuant to the Instructions of the Directing Holders (as described
in paragraph (d) below). The Servicer shall within five Business Days after
receipt of an Extension Case from the Special Servicer, give the Special
Servicer written notice as to whether or not it concurs with the extension set
forth in such Extension Case. The Special Servicer shall provide the necessary
information and back-up material for the Servicer to determine whether it would
extend prior to sending any such notice to the Trustee. The Special Servicer
will notify the Servicer of any Mortgage Loan with respect to which the
Borrower has indicated in writing an intent to request an extension.
The Holders of the Class A-CS1 and Class PS-1 Certificates
shall not be entitled to vote with respect to proposed extensions of a Balloon
Loan.
Any extension of a Balloon Loan pursuant to this Section will
require monthly payments in an amount equal to or greater than the Minimum
Defaulted Monthly Payment.
(d) The Special Servicer may be given revocable instructions
("Instructions") (with a copy to the Servicer) to extend a Specially Serviced
Mortgage Loan that has defaulted on a Balloon Payment (which extension shall be
conditioned on the requirements of clauses (ii)-(iv) of Section 3.30(c) above
except that such Instructions shall not be subject to the rejection of the
other Certificateholders and the related Borrower will not be required to have
made twelve consecutive Monthly Payments on or prior to the Due Date) by the
Holders of Certificates representing greater than 50% of the Voting Rights of
the most subordinate Class or Classes of Certificates then outstanding
representing a minimum of 1.0% of the aggregate initial Certificate Balances of
all Classes of Certificates (or if the Certificate Balance of such Class or
Classes has been reduced to less than 40% of its initial Certificate Balance,
the holders of such Class together with the Holders of the next most
subordinate Class) (the "Directing Holders") under the following circumstance:
(i) If the Special Servicer has determined to
commence foreclosure or acquisition proceedings, the Special Servicer
shall notify the Trustee (and the Trustee hereby agrees to notify
Directing Holders ), the Depositor and the Servicer of its proposed
action;
(ii) If the Special Servicer receives contrary
Instructions from the Directing Holders within seven days after notice
was given to the Directing Holders (and the Trustee hereby agrees to
forward to the Special Servicer promptly any Instructions provided by
the Directing Holders), the Special Servicer will delay such
proceedings, and the procedures described below shall apply to the
servicing of such Mortgage Loan; and
(iii) In the event that the Special Servicer does
not receive such Instructions within such seven-day period, the
Special Servicer may proceed in connection with the foreclosure or
acquisition in a manner consistent with the Servicing Standard.
If the Directing Holders revoke their Instructions to extend the Mortgage Loan,
the Special Servicer shall service the Mortgage Loan without regard to such
original Instructions; provided, however, that the Directing Holders shall be
required to maintain the Collateral Account in accordance with this Section
3.30 unless and until the Mortgage Loan is no longer a Specially Serviced
Mortgage Loan for nine consecutive months or has been liquidated; and provided,
further, that any such foreclosure shall be subject to the provisions of
Section 3.10.
(e) If the Special Servicer receives Instructions and the
Servicer has not otherwise been required to obtain an Updated Appraisal as
described in Section 3.10 above within the preceding twelve month period, the
Special Servicer shall notify the Servicer and the Servicer shall as soon as
reasonably practicable obtain an Updated Appraisal of the Mortgaged Property
(the cost of which shall be paid by the Servicer as a Property Advance), in
order to determine the fair market value of such Mortgaged Property, after
accounting for the estimated liquidation and carrying costs (the "Fair Market
Value" of such Mortgaged Property). Within two Business Days after the Special
Servicer's receipt of Instructions, the Servicer shall establish a segregated
account (the "Collateral Account") and the Directing Holders shall deposit
therein (at the Servicer's request), in proportion to their respective
Percentage Interests, an amount equal to the lesser of (i) 125% of the Fair
Market Value of the related Mortgaged Property and (ii) the outstanding
principal balance of the Mortgage Loan plus unreimbursed Advances (with
interest thereon at the Advance Rate) and unpaid accrued interest (the
"Deposit"). If no Updated Appraisal has yet been obtained, the amount of the
Deposit will be determined based on the Servicer's estimate of the Fair Market
Value of the Mortgaged Property, in which case, upon the Servicer's receipt of
such Updated Appraisal, the Servicer shall remit any excess deposit to the
Directing Holders, or the Directing Holders will deposit in the Collateral
Account any shortfall, as the case may be. In the event that the Directing
Holders do not make the required deposit within two Business Days following the
Special Servicer's receipt of Instructions, the Special Servicer shall act in
accordance with the Servicing Standard without regard to such Instructions. The
Directing Holders shall be deemed to have granted to the Servicer for the
benefit of Certificateholders a first priority security interest in the
Collateral Account, as security for the obligations of the Directing Holders.
If the Special Servicer is acting pursuant to Instructions,
the Servicer shall withdraw from the Collateral Account and deposit into the
Collection Account on or prior to the Business Day preceding each Servicer
Remittance Date an amount equal to the sum of (i) the Minimum Defaulted Monthly
Payment on the related Balloon Loan and (ii) any Property Protection Expenses
or any expenses incurred to protect and preserve the security for a Mortgage
Loan or taxes and assessments or insurance premiums (without regard to a
non-recoverability determination), and the Directing Holders shall, upon
request therefor by the Servicer, deposit from their own funds into the
Collateral Account the amount of such P&I Advance or Property Advance. Such
withdrawals shall be reimbursed, with interest, at the Advance Rate (but in no
event greater than the Default Rate on the related Mortgage Loan), and shall be
recoverable only from funds recovered from the related Mortgage Loan (whether
pursuant to liquidation or the Mortgage Loan being brought current) but only
after such funds have been applied to the purposes set forth in Section
3.06(i)-(x). If the Directing Holders fail to make such deposit within one (1)
Business Day after receipt of the Servicer's request, the Special Servicer
shall no longer be required to follow such Instructions and shall specially
service such Mortgage Loan as though no Instructions had been given; provided,
however, that the Directing Holders shall be required to maintain the
Collateral Account in accordance with the requirements of this Section 3.30
unless and until the related Mortgage Loan is no longer a Specially Serviced
Mortgage Loan for nine consecutive months or has been liquidated. The Servicer
shall invest amounts on deposit in the Collateral Account in Permitted
Investments upon direction by the Directing Holders. Directing Holders shall be
entitled to reinvestment income as received, and will reimburse the Collateral
Account for any losses incurred. Any Collateral Account established hereunder
will be an "outside reserve fund" beneficially owned by the related Directing
Holders for federal income tax purposes, and any amounts paid or reimbursed
from the Upper-Tier REMIC or Lower-Tier REMIC to the Collateral Account will be
treated as paid to the Directing Holders as beneficial owners.
(f) If a Balloon Loan or the related Mortgaged Property which
is subject to Instructions is liquidated or disposed of all Net Liquidation
Proceeds shall be deposited in the Collection Account and the Servicer shall
withdraw from the Collateral Account, and deposit into the Collection Account
as additional Liquidation Proceeds for distribution to Certificateholders the
lesser of (a) the amount by which 125% of the Fair Market Value (determined at
the time of the Deposit) (plus accrued and unpaid interest, accumulated
carrying costs and conveyance expenses) exceeds the net sales proceeds, and (b)
the amount by which the outstanding principal balance of the related Mortgage
Loan plus unreimbursed Advances (with interest thereon) and unpaid accrued
interest exceeds the net sales proceeds, provided that in no event shall such
additional Liquidation Proceeds exceed the unpaid principal balance, accrued
and unpaid interest (including Default Interest), unpaid Advances made by the
Servicer, Special Servicer, Trustee or Fiscal Agent and interest thereon, and
any expenses paid by the Trust Fund with respect to such Mortgage Loan.
If the amount realized upon disposition of the Mortgage Loan
or Mortgaged Property exceeds 125% of the Fair Market Value, the Servicer shall
deposit the excess in the Collection Account to the extent not required by
applicable law to be paid to the related Borrower. If the Mortgage Loan has not
been sold, liquidated or disposed of on or before the third anniversary of the
Instructions (or such earlier date so that the Trust Fund owns the Mortgaged
Property for no longer than the period permitted by Section 3.17(a)), the
Directing Holders shall immediately purchase the Mortgage Loan for a purchase
price equal to Fair Market Value (determined at the time of the Deposit) plus
accrued and unpaid interest, accumulated carrying costs and conveyance expenses
and, in connection therewith, amounts then on deposit in the Collateral Account
shall be applied first in payment of such purchase price. For purposes of this
paragraph, if the Updated Appraisal is dated more than twelve months prior to
the date on which such purchase is to occur, then the Servicer shall obtain an
Updated Appraisal upon which the calculation of Fair Market Value shall be
based and the term "Fair Market Value" for purposes of the purchase price and
the first paragraph of this section (d) shall be the greater of (i) the Fair
Market Value calculated at the time the Instructions were first given and (ii)
the Fair Market Value calculated in connection with the referenced Updated
Appraisal, provided that in no event shall such price exceed the unpaid
principal balance, accrued interest (including Default Interest), unpaid
Advances made by the Servicer, Special Servicer, Trustee or Fiscal Agent, and
interest thereon and expenses paid by the Trust Fund with respect to such
Mortgage Loan.
If at any time following the establishment of a Collateral
Account and prior to the disposition of the Specially Serviced Mortgage Loan or
Mortgaged Property, the Mortgaged Property suffers a hazard loss that results
in the Mortgaged Property not being rebuilt and payments to the Trustee are
made under the related hazard insurance policy, the Servicer shall pay all
amounts on deposit in the Collateral Account to the Directing Holders. In
addition, after amounts required to be deposited in the Collection Account as
set forth above have been withdrawn from the Collateral Account following
foreclosure, liquidation, disposition, purchase by Directing Holders, or if the
related Mortgage Loan is no longer a Specially Serviced Mortgage Loan for nine
consecutive months, any remaining amounts in the Collateral Account shall be
released to the Directing Holders.
(h) Until the disposition of the Specially Serviced Mortgage
Loan or Mortgaged Property as to which Directing Holders have provided
Instructions or the cure of such default, no P&I Advances shall be made in
respect of amounts otherwise distributable to the Class of the Directing
Holders in respect of such Mortgage Loan. The Trustee shall notify the Servicer
at least five Business Days prior to the Servicer Remittance Date of the amount
of distributions to be made to the Directing Holders on the related
Distribution Date.
(i) The Special Servicer shall provide copies of any
modifications or extensions to each Rating Agency. All modifications, waivers,
amendments and other actions entered into or taken in respect of the Mortgage
Loans pursuant to this Section 3.30 shall be in writing. The Special Servicer
shall notify the Servicer and the Trustee, in writing, of any modification,
waiver, amendment or other action entered into or taken in respect of any
Mortgage Loan pursuant to this Section 3.30, prior to the effective date
thereof and the date as of which the related modification, waiver or amendment
is to take effect, and shall deliver to the Trustee or the related Custodian
for deposit in the related Mortgage File (with a copy to the Servicer) an
original counterpart of the agreement relating to such modification, waiver,
amendment or other action, promptly (and in any event within 10 Business Days)
following the execution thereof. Following the execution of any modification,
waiver or amendment agreed to by the Special Servicer pursuant to the clause
(a) or (b)(i) above, the Special Servicer shall deliver to the Trustee (with a
copy to the Servicer) an Officer's Certificate setting forth in reasonable
detail the basis of the determination made by it pursuant to clause (a) or
(b)(i) above.
(j) If a modification, waiver or amendment results, in and of
itself, in the withdrawal, downgrade or qualification of any of the
then-current ratings assigned to any Class of Certificates (not including the
Class of Certificates, if any, that consented to such actions), then the
Special Servicer shall be terminated and shall be replaced pursuant to Section
7.02.
(k) Any payment of interest which is deferred as described
herein shall not, for purposes, including, without limitation, of calculating
monthly distributions to Certificateholders, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit or that such interest may actually be capitalized.
SECTION 3.31. Notices to Unitholders.
Unless and until a Certificate has been separated from a Unit
pursuant to Section 5.01(j) hereof, all notices, reports, requests or any other
information required to be sent to Holders of any of the Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5 or Class B-6 Certificates shall be sent to the
related Unitholder as well as to the Holder of the Individual Certificates of
the Class B-1, Class B-2 and Class B-4 Certificates each having an initial
Certificate Balance of $9.00. Only one copy of any such notice, report, request
or other information shall be sent to each Unitholder, unless such notice,
report, request or information is different with respect to each Class.
ARTICLE IV
DISTRIBUTIONS TO CERTIFICATEHOLDERS
SECTION 4.01. Distributions.
(a) On each Distribution Date, to the extent of Available
Funds, amounts held in the Distribution Account shall be withdrawn and
distributed on the Lower-Tier REMIC Regular Interests as follows:
(i) The amounts and timing of principal and interest payments
on each Lower-Tier REMIC Regular Interest will be identical
to such amounts and timing on the corresponding Related
Certificates for such Distribution Date, except that, solely
for this purpose, all calculations with respect to the
Related Certificates shall be made as though (x) the Class
A-1A, Class A-1B, Class A-1C, Class A-1D, Class A-1E, Class
A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8, Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5, and Class B-6 Certificate Pass-Through Rates were equal
to the Weighted Average Net Mortgage Pass-Through Rate, (y)
the Class PS-1 and Class A-CS1 Notional Balances were zero at
all times, and (z) any Reduction Interest Distribution Amount
and Reduction Interest shortfall allocated to, or any
[restoration] of amounts corresponding to such Reduction
Interest Distribution Amount and Reduction Interest Shortfall
distributed on, the Class PS-1 Certificates on such
Distribution Date based on notional reductions to the
Certificate Balance of a Related Certificate were allocated
to or distributed on, as the case may be, the Lower-Tier
Regular Interest that corresponds to such Related
Certificate.
(ii) [Intentionally left blank]
(iii) Realized Losses shall be allocated to, and shall reduce
the Certificate Balances of, each Class of Lower-Tier Regular
Interests without distribution on any Distribution Date, to
the extent that the Certificate Balance of such Class exceeds
the Certificate Balance of the corresponding Related
Certificates because of Realized Losses allocated to such
Related Certificates. Amounts recovered in respect of any
amounts previously written off as Realized Losses will be
distributed to the Related Lower-Tier Regular Interests, to
the extent that amounts recovered in respect of any amounts
previously written off as Realized Losses are distributed to
the corresponding Related Certificates.
(b) On each Distribution Date, (x) amounts distributed on the
Lower-Tier Regular Interests shall be deposited in the Upper-Tier Distribution
Account, (y) any amounts remaining in the Distribution Account shall be
distributed to the holders of the Class LR Certificates and (z) Holders of each
Class of Certificates (other than the Class LR Certificates) shall receive
distributions from amounts on deposit in the Upper-Tier Distribution Account in
respect of interest and principal, in the amounts and in the order of priority
set forth below:
(i) First, pro rata, in respect of interest, to the Class
A-1A, Class A-1B, Class A-1C, Class A-1D, Class A-CS1 and
Class PS-1 Certificates, up to an amount equal to the
aggregate Class Interest Distribution Amounts of such
Classes;
(ii) Second, pro rata, to the Class A-1A, Class A-1B, Class
A-1C, Class A-1D, Class A-CS1 and Class PS-1 Certificates, in
respect of interest, up to an amount equal to the aggregate
unpaid Class Interest Shortfalls previously allocated to such
Classes;
(iii) Third, prior to the Crossover Date, to the Class A-1A
Certificates, in reduction of the Certificate Balance
thereof, an amount equal to the Principal Distribution Amount
until the Certificate Balance thereof is reduced to zero;
(iv) Fourth, prior to the Crossover Date, to the Class A-1B
Certificates, in reduction of the Certificate Balance
thereof, an amount equal to the Principal Distribution Amount
less amounts of Principal Distribution Amount distributed
pursuant to all prior clauses, until the Certificate Balance
of such Class is reduced to zero;
(v) Fifth, prior to the Crossover Date, to the Class A-1C
Certificates, in reduction of the Certificate Balance
thereof, an amount equal to the Principal Distribution Amount
less amounts of Principal Distribution Amount distributed
pursuant to all prior clauses, until the Certificate Balance
of such Class is reduced to zero;
(vi) Sixth, prior to the Crossover Date, to the Class A-1D
Certificates, in reduction of the Certificate Balance
thereof, an amount equal to the Principal Distribution Amount
less amounts of Principal Distribution Amount distributed
pursuant to all prior clauses, until the Certificate Balance
of such Class is reduced to zero;
(vii) Seventh, on and after the Crossover Date, to the Class
A-1A, Class A-1B, Class A-1C and Class A-1D Certificates, pro
rata, in reduction of the Certificate Balances thereof, an
amount equal to the Principal Distribution Amount less
amounts of Principal Distribution Amount distributed pursuant
to all prior clauses, until the Certificate Balances thereof
are reduced to zero;
(viii) Eighth, to the Class A-1E Certificates in respect of
interest, up to an amount equal to the aggregate Class
Interest Distribution Amount of such Class;
(ix) Ninth, pro rata, (A) to the Class A-1E Certificates in
respect of interest, up to an amount equal to the aggregate
unpaid Class Interest Shortfalls previously allocated to such
Class, (B) to the Class PS-1 Certificates in respect of the
Reduction Interest Distribution Amount attributable to the
notional reduction in the Certificate Balance of the Class
A-1E Certificates pursuant to Section 4.01(i) up to an amount
equal to the aggregate Reduction Interest Distribution Amount
so attributable and (C) to the Class PS-1 Certificates, up to
an amount equal to the aggregate unpaid Reduction Interest
Shortfalls previously allocated to the Class PS-1 Certificate
in respect of Reduction Interest Distribution Amounts under
Clause (B);
(x) Tenth, to the Class A-1E Certificates, in reduction of
the Certificate Balance thereof, an amount equal to the
Principal Distribution Amount less amounts of Principal
Distribution Amount distributed pursuant to all prior
clauses, until the Certificate Balance of such Class is
reduced to zero;
(xi) Eleventh, to the Class A-1E Certificates, to the extent
not distributed pursuant to all prior clauses, for the
unreimbursed amounts of Realized Losses, if any, an amount
equal to the aggregate of such unreimbursed Realized Losses
previously allocated to such Class;
(xii) Twelfth, to the Class A-2 Certificates in respect of
interest, up to an amount equal to the aggregate Class
Interest Distribution Amount of such Class;
(xiii) Thirteenth, pro rata, (A) to the Class A-2
Certificates in respect of interest, up to an amount equal to
the aggregate unpaid Class Interest Shortfalls previously
allocated to such Class, (B) to the Class PS-1 Certificates
in respect of the Reduction Interest Distribution Amount
attributable to the notional reduction in the Certificate
Balance of the Class A-2 Certificates pursuant to Section
4.01(i) up to an amount equal to the aggregate Reduction
Interest Distribution Amount so attributable and (C) to the
Class PS-1 Certificates, up to an amount equal to the
aggregate unpaid Reduction Interest Shortfalls previously
allocated to the Class PS-1 Certificates in respect of
Reduction Interest Distribution Amounts under Clause (B);
(xiv) Fourteenth, to the Class A-2 Certificates, in reduction
of the Certificate Balance thereof, an amount equal to the
Principal Distribution Amount less amounts of Principal
Distribution Amount distributed pursuant to all prior
clauses, until the Certificate Balance of such Class is
reduced to zero;
(xv) Fifteenth, to the Class A-2 Certificates, to the extent
not distributed pursuant to all prior clauses, for the
unreimbursed amounts of Realized Losses, if any, an amount
equal to the aggregate of such unreimbursed Realized Losses
previously allocated to such Class;
(xvi) Sixteenth, to the Class A-3 Certificates in respect of
interest, up to an amount equal to the aggregate Class
Interest Distribution Amount of such Class;
(xvii) Seventeenth, pro rata, (A) to the Class A-3
Certificates in respect of interest, up to an amount equal to
the aggregate unpaid Class Interest Shortfalls previously
allocated to such Class, (B) to the Class PS-1 Certificates
in respect of the Reduction Interest Distribution Amount
attributable to the notional reduction in the Certificate
Balance of the Class A-3 Certificates pursuant to Section
4.01(i) up to an amount equal to the aggregate Reduction
Interest Distribution Amount so attributable and (C) to the
Class PS-1 Certificates, up to an amount equal to the
aggregate unpaid Reduction Interest Shortfalls previously
allocated to the Class PS-1 Certificates in respect of
Reduction Interest Distribution Amounts under Clause (B);
(xviii) Eighteenth, to the Class A-3 Certificates in
reduction of the Certificate Balance thereof, an amount equal
to the Principal Distribution Amount, less the amount of the
Principal Distribution Amount distributed pursuant to all
prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xix) Nineteenth, to the Class A-3 Certificates, to the
extent not distributed pursuant to all prior clauses, for the
unreimbursed amounts of Realized Losses, if any, up to an
amount equal to the aggregate of such unreimbursed Realized
Losses previously allocated to such Class;
(xx) Twentieth, to the Class A-4 Certificates in respect of
interest, up to an amount equal to the aggregate Class
Interest Distribution Amount of such Class;
(xxi) Twenty-first, pro rata, (A) to the Class A-4
Certificates in respect of interest, up to an amount equal to
the aggregate unpaid Class Interest Shortfalls previously
allocated to such Class, (B) to the Class PS-1 Certificates
in respect of the Reduction Interest Distribution Amount
attributable to the notional reduction in the Certificate
Balance of the Class A-4 Certificates pursuant to Section
4.01(i) up to an amount equal to the aggregate Reduction
Interest Distribution Amount so attributable and (C) to the
Class PS-1 Certificates, up to an amount equal to the
aggregate unpaid Reduction Interest Shortfalls previously
allocated to the Class PS-1 Certificates in respect of
Reduction Interest Distribution Amounts under Clause (B);
(xxii) Twenty-second, to the Class A-4 Certificates, in
reduction of the Certificate Balance thereof, an amount equal
to the Principal Distribution Amount less amounts of
Principal Distribution Amount distributed pursuant to all
prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xxiii) Twenty-third, to the Class A-4 Certificates, to the
extent not distributed pursuant to all prior clauses, for the
unreimbursed amounts of Realized Losses, if any, an amount
equal to the aggregate of such unreimbursed Realized Losses
previously allocated to such Class;
(xxiv) Twenty-fourth, to the Class A-5 Certificates in
respect of interest, up to an amount equal to the aggregate
Class Interest Distribution Amount of such Class;
(xxv) Twenty-fifth, pro rata, (A) to the Class A-5
Certificates in respect of interest, up to an amount equal to
the aggregate unpaid Class Interest Shortfalls previously
allocated to such Class, (B) to the Class PS-1 Certificates
in respect of the Reduction Interest Distribution Amount
attributable to the notional reduction in the Certificate
Balance of the Class A-5 Certificates pursuant to Section
4.01(i) up to an amount equal to the aggregate Reduction
Interest Distribution Amount so attributable and (C) to the
Class PS-1 Certificates, up to an amount equal to the
aggregate unpaid Reduction Interest Shortfalls previously
allocated to the Class PS-1 Certificates in respect of
Reduction Interest Distribution Amounts under Clause (B);
(xxvi) Twenty-sixth, to the Class A-5 Certificates in
reduction of the Certificate Balance thereof, an amount equal
to the Principal Distribution Amount, less the amount of the
Principal Distribution Amount distributed pursuant to all
prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xxvii) Twenty-seventh, to the Class A-5 Certificates, to the
extent not distributed pursuant to all prior clauses, for the
unreimbursed amounts of Realized Losses, if any, an amount
equal to the aggregate of such unreimbursed Realized Losses
previously allocated to such Class;
(xxviii) Twenty-eighth, to the Class A-6 Certificates in
respect of interest, up to an amount equal to the aggregate
Class Interest Distribution Amount of such Class;
(xxix) Twenty-ninth, pro rata, (A) to the Class A-6
Certificates in respect of interest, up to an amount equal to
the aggregate unpaid Class Interest Shortfalls previously
allocated to such Class, (B) to the Class PS-1 Certificates
in respect of the Reduction Interest Distribution Amount
attributable to the notional reduction in the Certificate
Balance of the Class A-6 Certificates pursuant to Section
4.01(i) up to an amount equal to the aggregate Reduction
Interest Distribution Amount so attributable and (C) to the
Class PS-1 Certificates, up to an amount equal to the
aggregate unpaid Reduction Interest Shortfalls previously
allocated to the Class PS-1 Certificates in respect of
Reduction Interest Distribution Amounts under Clause (B);
(xxx) Thirtieth, to the Class A-6 Certificates in reduction
of the Certificate Balance thereof, an amount equal to the
Principal Distribution Amount, less the amount of the
Principal Distribution Amount distributed pursuant to all
prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xxxi) Thirty-first, to the Class A-6 Certificates, to the
extent not distributed pursuant to all prior clauses, for the
unreimbursed amounts of Realized Losses, if any, an amount
equal to the aggregate of such unreimbursed Realized Losses
previously allocated to such Class;
(xxxii) Thirty-second, to the Class A-7 Certificates in
respect of interest, up to an amount equal to the aggregate
Class Interest Distribution Amount of such Class;
(xxxiii) Thirty-third, pro rata, (A) to the Class A-7
Certificates in respect of interest, up to an amount equal to
the aggregate unpaid Class Interest Shortfalls previously
allocated to such Class, (B) to the Class PS-1 Certificates
in respect of the Reduction Interest Distribution Amount
attributable to the notional reduction in the Certificate
Balance of the Class A-7 Certificates pursuant to Section
4.01(i) up to an amount equal to the aggregate Reduction
Interest Distribution Amount so attributable and (C) to the
Class PS-1 Certificates, up to an amount equal to the
aggregate unpaid Reduction Interest Shortfalls previously
allocated to the Class PS-1 Certificates in respect of
Reduction Interest Distribution Amounts under Clause (B);
(xxxiv) Thirty-fourth, to the Class A-7 Certificates in
reduction of the Certificate Balance thereof, an amount equal
to the Principal Distribution Amount, less the amount of the
Principal Distribution Amount distributed pursuant to all
prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xxxv) Thirty-fifth, to the Class A-7 Certificates, to the
extent not distributed pursuant to all prior clauses, for the
unreimbursed amounts of Realized Losses, if any, an amount
equal to the aggregate of such unreimbursed Realized Losses
previously allocated to such Class;
(xxxvi) Thirty-sixth, to the Class A-8 Certificates in
respect of interest, up to an amount equal to the aggregate
Class Interest Distribution Amount of such Class;
(xxxvii) Thirty-seventh, pro rata, (A) to the Class A-8
Certificates in respect of interest, up to an amount equal to
the aggregate unpaid Class Interest Shortfalls previously
allocated to such Class, (B) to the Class PS-1 Certificates
in respect of the Reduction Interest Distribution Amount
attributable to the notional reduction in the Certificate
Balance of the Class A-8 Certificates pursuant to Section
4.01(i) up to an amount equal to the aggregate Reduction
Interest Distribution Amount so attributable and (C) to the
Class PS-1 Certificates, up to an amount equal to the
aggregate unpaid Reduction Interest Shortfalls previously
allocated to the Class PS-1 Certificates in respect of
Reduction Interest Distribution Amounts under Clause (B);
(xxxviii) Thirty-eighth, to the Class A-8 Certificates in
reduction of the Certificate Balance thereof, an amount equal
to the Principal Distribution Amount, less the amount of the
Principal Distribution Amount distributed pursuant to all
prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xxxix) Thirty-ninth, to the Class A-8 Certificates, to the
extent not distributed pursuant to all prior clauses, for the
unreimbursed amounts of Realized Losses, if any, an amount
equal to the aggregate of such unreimbursed Realized Losses
previously allocated to such Class;
(xl) Fortieth, to the Class B-1 Certificates in respect of
interest, up to an amount equal to the aggregate Class
Interest Distribution Amount of such Class;
(xli) Forty-first, pro rata, (A) to the Class B-1
Certificates in respect of interest, up to an amount equal to
the aggregate unpaid Class Interest Shortfalls previously
allocated to such Class, (B) to the Class PS-1 Certificates
in respect of the Reduction Interest Distribution Amount
attributable to the notional reduction in the Certificate
Balance of the Class B-1 Certificates pursuant to Section
4.01(i) up to an amount equal to the aggregate Reduction
Interest Distribution Amount so attributable and (C) to the
Class PS-1 Certificates, up to an amount equal to the
aggregate unpaid Reduction Interest Shortfalls previously
allocated to the Class PS-1 Certificates in respect of
Reduction Interest Distribution Amounts under Clause (B);
(xlii) Forty-second, to the Class B-1 Certificates, in
reduction of the Certificate Balance thereof, an amount equal
to the Principal Distribution Amount less amounts of
Principal Distribution Amount distributed pursuant to all
prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xliii) Forty-third, to the Class B-1 Certificates, to the
extent not distributed pursuant to all prior clauses, for the
unreimbursed amounts of Realized Losses, if any, an amount
equal to the aggregate of such unreimbursed Realized Losses
previously allocated to such Class;
(xliv) Forty-fourth, to the Class B-2 Certificates in respect
of interest, up to an amount equal to the aggregate Class
Interest Distribution Amount of such Class;
(xlv) Forty-fifth, pro rata, (A) to the Class B-2
Certificates in respect of interest, up to an amount equal to
the aggregate unpaid Class Interest Shortfalls previously
allocated to such Class, (B) to the Class PS-1 Certificates
in respect of the Reduction Interest Distribution Amount
attributable to the notional reduction in the Certificate
Balance of the Class B-2 Certificates pursuant to Section
4.01(i) up to an amount equal to the aggregate Reduction
Interest Distribution Amount so attributable and (C) to the
Class PS-1 Certificates, up to an amount equal to the
aggregate unpaid Reduction Interest Shortfalls previously
allocated to the Class PS-1 Certificates in respect of
Reduction Interest Distribution Amounts under Clause (B);
(xlvi) Forty-sixth, to the Class B-2 Certificates, in
reduction of the Certificate Balance thereof, an amount equal
to the Principal Distribution Amount less amounts of
Principal Distribution Amount distributed pursuant to all
prior clauses, until the Certificate Balance of such Class is
reduced to zero;
(xlvii) Forty-seventh, to the Class B-2 Certificates, to the
extent not distributed pursuant to all prior clauses, for the
unreimbursed amounts of Realized Losses, if any, an amount
equal to the aggregate of such unreimbursed Realized Losses
previously allocated to such Class;
(xlviii) Forty-eighth, to the Class B-3 Certificates in
respect of interest, up to an amount equal to the aggregate
Class Interest Distribution Amount of such Class;
(xlix) Forth-ninth, pro rata, (A) to the Class B-3
Certificates in respect of interest, up to an amount equal to
the aggregate unpaid Class Interest Shortfalls previously
allocated to such Class, (B) to the Class PS-1 Certificates
in respect of the Reduction Interest Distribution Amount
attributable to the notional reduction in the Certificate
Balance of the Class B-3 Certificates pursuant to Section
4.01(i) up to an amount equal to the aggregate Reduction
Interest Distribution Amount so attributable and (C) to the
Class PS-1 Certificates, up to an amount equal to the
aggregate unpaid Reduction Interest Shortfalls previously
allocated to the Class PS-1 Certificates in respect of
Reduction Interest Distribution Amounts under Clause (B);
(l) Fiftieth, to the Class B-3 Certificates, in
reduction of the Certificate Balance thereof, an
amount equal to the Principal Distribution Amount less
amounts of Principal Distribution Amount distributed
pursuant to all prior clauses, until the Certificate
Balance of such Class is reduced to zero;
(li) Fifty-first, to the Class B-3 Certificates, to
the extent not distributed pursuant to all prior
clauses, for the unreimbursed amounts of Realized
Losses, if any, an amount equal to the aggregate of
such unreimbursed Realized Losses previously allocated
to such Class;
(lii) Fifty-second, to the Class B-4 Certificates in
respect of interest, up to an amount equal to the
aggregate Class Interest Distribution Amount of such
Class;
(liii) Fifty-third, (A) to the Class B-4 Certificates
in respect of interest, up to an amount equal to the
aggregate unpaid Class Interest Shortfalls previously
allocated to such Class, (B) to the Class PS-1
Certificates in respect of the Reduction Interest
Distribution Amount attributable to the notional
reduction in the Certificate Balance of the Class B-4
Certificates pursuant to Section 4.01( ) up to an
amount equal to the aggregate Reduction Interest
Distribution Amount so attributable and (C) to the
Class PS-1 Certificates, up to an amount equal to the
aggregate unpaid Reduction Interest Shortfalls
previously allocated to the Class PS-1 Certificates in
respect of Reduction Interest Distribution Amounts
under Clause (B);
(liv) Fifty-fourth, to the Class B-4 Certificates, in
reduction of the Certificate Balance thereof, an
amount equal to the Principal Distribution Amount less
amounts of Principal Distribution Amount distributed
pursuant to all prior clauses, until the Certificate
Balance of such Class is reduced to zero;
(lv) Fifty-fifth, to the Class B-4 Certificates, to
the extent not distributed pursuant to all prior
clauses, for the unreimbursed amounts of Realized
Losses, if any, an amount equal to the aggregate of
such unreimbursed Realized Losses previously allocated
to such Class;
(lvi) Fifty-sixth, to the Class B-5 Certificates in
respect of interest, up to an amount equal to the
aggregate Class Interest Distribution Amount of such
Class;
(lvii) Fifty-seventh, pro rata, (A) to the Class B-5
Certificates in respect of interest, up to an amount
equal to the aggregate unpaid Class Interest
Shortfalls previously allocated to such Class, (B) to
the Class PS-1 Certificates in respect of the
Reduction Interest Distribution Amount attributable to
the notional reduction in the Certificate Balance of
the Class B-5 Certificates pursuant to Section 4.01(i)
up to an amount equal to the aggregate Reduction
Interest Distribution Amount so attributable and (C)
to the Class PS-1 Certificates, up to an amount equal
to the aggregate unpaid Reduction Interest Shortfalls
previously allocated to the Class PS-1 Certificates in
respect of Reduction Interest Distribution Amounts
under Clause (B);
(lviii) Fifty-eighth, to the Class B-5 Certificates,
in reduction of the Certificate Balance thereof, an
amount equal to the Principal Distribution Amount less
amounts of Principal Distribution Amount distributed
pursuant to all prior clauses, until the Certificate
Balance of such Class is reduced to zero;
(lix) Fifty-ninth, to the Class B-5 Certificates, to
the extent not distributed pursuant to all prior
clauses, for the unreimbursed amounts of Realized
Losses, if any, an amount equal to the aggregate of
such unreimbursed Realized Losses previously allocated
to such Class;
(lx) Sixtieth, to the Class B-6 Certificates in
respect of interest, up to an amount equal to the
aggregate Class Interest Distribution Amount of such
Class;
(lxi) Sixty-first, pro rata, (A) to the Class B-6
Certificates in respect of interest, up to an amount
equal to the aggregate unpaid Class Interest
Shortfalls previously allocated to such Class, (B) to
the Class PS-1 Certificates in respect of the
Reduction Interest Distribution Amount attributable to
the notional reduction in the Certificate Balance of
the Class B-6 Certificates pursuant to Section 4.01(i)
up to an amount equal to the aggregate Reduction
Interest Distribution Amount so attributable and (C)
to the Class PS-1 Certificates, up to an amount equal
to the aggregate unpaid Reduction Interest Shortfalls
previously allocated to the Class PS-1 Certificates in
respect of Reduction Interest Distribution Amounts
under Clause (B);
(lxii) Sixty-second, to the Class B-6 Certificates, in
reduction of the Certificate Balance thereof, an
amount equal to the Principal Distribution Amount less
amounts of Principal Distribution Amount distributed
pursuant to all prior clauses, until the Certificate
Balance of such Class is reduced to zero;
(lxiii) Sixty-third, to the Class B-6 Certificates, to
the extent not distributed pursuant to all prior
clauses, for the unreimbursed amounts of Realized
Losses, if any, an amount equal to the aggregate of
such unreimbursed Realized Losses previously allocated
to such Class;
(lxiv) Sixty-fourth, pro rata, to the Class B-7 and
Class B-7H Certificates in respect of interest, up to
an amount equal to the aggregate Class Interest
Distribution Amounts of such classes;
(lxv) Sixty-fifth, pro rata, to the Class B-7 and
Class B-7H Certificates in respect of interest, up to
an amount equal to the aggregate unpaid Class Interest
Shortfalls previously allocated to such classes;
(lxvi) Sixty-sixth, pro rata, based on Certificate
Balance to the Class B-7 and Class B-7H Certificates
in reduction of the Certificate Balances thereof, an
amount equal to the Principal Distribution Amount less
amounts of the Principal Distribution Amount
distributed pursuant to all prior clauses, until the
Certificate Balance of each such class is reduced to
zero;
(lxvii) Sixty-seventh, pro rata, to the Class B-7 and
Class B-7H Certificates, to the extent not distributed
pursuant to all prior clauses, for the unreimbursed
amounts of Realized Losses, if any, an amount equal to
the aggregate of such unreimbursed Realized Losses
previously allocated to such classes; and
(lxviii) Sixty-eighth, to the Class R Certificates.
On each Distribution Date, amounts received on a Mortgage
Loan that represent Subordinate Class Advance Recoveries shall be allocated by
the Trustee to the Class of Certificates and the Related Lower-Tier Regular
Interest that advanced the related Subordinate Class Advance Amount in respect
of the distributions to which such Class of Certificates and Related Lower-Tier
Regular Interest were entitled on the Distribution Date on which such
distributions were reduced by such Subordinate Class Advance Amount. Amounts
allocated with respect to interest shall be applied, first, to any related
unpaid Interest Shortfalls or Class Interest Shortfalls. On each Distribution
Date, the Paying Agent shall distribute Subordinate Class Advance Recoveries
allocated to the related Class of Certificates and Related Lower-Tier Regular
Interest pursuant to this paragraph to such Class and Related Lower-Tier
Regular Interest.
All references to pro rata in the preceding clauses with
respect to interest and Interest Shortfalls shall mean pro rata based on the
amount distributable pursuant to such clauses, with respect to distribution of
principal other than for unreimbursed Realized Losses shall mean pro rata based
on Certificate Balance and with respect to distributions with respect to
unreimbursed Realized Losses shall mean pro rata based on the amount of
unreimbursed Realized Losses previously allocated to the applicable Classes.
(c) (i) On each Distribution Date, following the distribution
from the Distribution Account in respect of the Lower-Tier Regular Interests
pursuant to Section 4.01(c)(ii), the Paying Agent shall make distributions of
Prepayment Premiums with respect to any Principal Prepayments received in the
related Collection Period from amounts deposited in the Upper-Tier Distribution
Account pursuant to Section 3.05(c) in the following amounts and order of
priority, with respect to the Certificates of each Class in each case to the
extent remaining amounts of Prepayment Premiums are available therefor:
(I) First, to the Class A-CS1 Certificates, an amount equal
to (A) the present value (discounted at the Discount Rate (as
defined below) for the Class A-CS1 Certificates plus the
Spread Rate (as defined below) for the Class A-CS1
Certificates) of the aggregate interest that would have been
paid in respect of the Class A-CS1 Certificates from the
Distribution Date occurring in the following month until the
Notional Balance of the Class A-CS1 Certificates would have
been reduced to zero had the related prepayment not occurred,
minus the present value (discounted at the Discount Rate for
the Class A-CS1 Certificates plus the Spread Rate for the
Class A-CS1 Certificates) of the aggregate interest that will
be paid in respect of Class A-CS1 Certificates from the
Distribution Date occurring in the following month until the
Notional Balance of the Class A-CS1 Certificates is reduced
to zero following such prepayment (assuming no further
prepayments are made except that all Mortgage Loans prepay on
Anticipated Repayment Dates where applicable);
(II) Second, to the Class PS-1 Certificates, an amount equal
to (A) the present value (discounted at the Discount Rate for
the Class PS-1 Certificates plus the Spread Rate for the
Class PS-1 Certificates) of the aggregate interest that would
have been paid in respect of the Class PS-1 Certificates from
the Distribution Date occurring in the following month until
the Notional Balance of the Class PS-1 Certificates would
have been reduced to zero had the related prepayment not
occurred, minus the present value (discounted at the Discount
Rate for the Class PS-1 Certificates plus the Spread Rate for
the Class PS-1 Certificates) of the aggregate interest that
will be paid in respect of Class PS-1 Certificates from the
Distribution Date occurring in the following month until the
Notional Balance of the Class PS-1 Certificates is reduced to
zero following such prepayment (assuming no further
prepayments are made except that all Mortgage Loans prepay on
Anticipated Repayment Dates where applicable);
(III) Third, to the Class A-1A Certificates, an amount equal
to (A) the present value (discounted at the Discount Rate for
the Class A-1A Certificates plus the Spread Rate for the
Class A-1A Certificates) of the aggregate principal and
interest that would have been paid in respect of the Class
A-1A Certificates from the Distribution Date occurring in the
following month until the Certificate Balance of the Class
A-1A Certificates would have been reduced to zero had the
related prepayment not occurred, minus the sum of (B) the
amount of such prepayment distributed in respect of the Class
A-1A Certificates and (C) the present value (discounted at
the Discount Rate for the Class A-1A Certificates plus the
Spread Rate for the Class A-1A Certificates) of the aggregate
principal and interest that will be paid in respect of the
Class A-1A Certificates from the Distribution Date occurring
in the following month until the Certificate Balance of the
Class A-1A Certificates is reduced to zero following such
prepayment (assuming no further prepayments are made except
that all Mortgage Loans prepay on Anticipated Repayment Dates
where applicable);
(IV) Fourth, to the Class A-1B Certificates, an amount equal
to (A) the present value (discounted at the Discount Rate for
the Class A-1B Certificates plus the Spread Rate for the
Class A-1B Certificates) of the aggregate principal and
interest that would have been paid in respect of the Class
A-1B Certificates from the Distribution Date occurring in the
following month until the Certificate Balance of the Class
A-1B Certificates would have been reduced to zero had the
related prepayment not occurred, minus the sum of (B) the
amount of such prepayment distributed in respect of the Class
A-1B Certificates and (C) the present value (discounted at
the Discount Rate for the Class A-1B Certificates plus the
Spread Rate for the Class A-1B Certificates) of the aggregate
principal and interest that will be paid in respect of the
Class A-1B Certificates from the Distribution Date occurring
in the following month until the Certificate Balance of the
Class A-1B Certificates is reduced to zero following such
prepayment (assuming no further prepayments are made except
that all Mortgage Loans prepay on Anticipated Repayment Dates
where applicable); and
(V) Fifth, to the Class A-1C Certificates, an amount equal to
(A) the present value (discounted at the Discount Rate for
the Class A-1C Certificates plus the Spread Rate for the
Class A-1C Certificates) of the aggregate principal and
interest that would have been paid in respect of the Class
A-1C Certificates from the Distribution Date occurring in the
following month until the Certificate Balance of the Class
A-1C Certificates would have been reduced to zero had the
related prepayment not occurred, minus the sum of (B) the
amount of such prepayment distributed in respect of the Class
A-1C Certificates and (C) the present value (discounted at
the Discount Rate for the Class A-1C Certificates plus the
Spread Rate for the Class A-1C Certificates) of the aggregate
principal and interest that will be paid in respect of the
Class A-1C Certificates from the Distribution Date occurring
in the following month until the Certificate Balance of the
Class A-1C Certificates is reduced to zero following such
prepayment (assuming no further prepayments are made except
that all Mortgage Loans prepay on Anticipated Repayment Dates
where applicable); and
(VI) Sixth, to the Class A-1D Certificates, an amount equal
to (A) the present value (discounted at the Discount Rate for
the Class A-1D Certificates plus the Spread Rate for the
Class A-1D Certificates) of the aggregate principal and
interest that would have been paid in respect of the Class
A-1D Certificates from the Distribution Date occurring in the
following month until the Certificate Balance of the Class
A-1D Certificates would have been reduced to zero had the
related prepayment not occurred, minus the sum of (B) the
amount of such prepayment distributed in respect of the Class
A-1D Certificates and (C) the present value (discounted at
the Discount Rate for the Class A-1D Certificates plus the
Spread Rate for the Class A-1D Certificates) of the aggregate
principal and interest that will be paid in respect of the
Class A-1D Certificates from the Distribution Date occurring
in the following month until the Certificate Balance of the
Class A-1D Certificates is reduced to zero following such
prepayment (assuming no further prepayments are made except
that all Mortgage Loans prepay on Anticipated Repayment Dates
where applicable).
In all clauses above, Prepayment Premiums will only be distributed on a
Distribution Date (i) if the respective Certificate Balance or Notional Balance
of the related Class or Classes is greater than zero on the last Business Day
of the Interest Accrual Period ending immediately prior to such Distribution
Date and (ii) if the amount computed pursuant to the related clause above is
greater than zero. Any Prepayment Premiums remaining following the
distributions described in the preceding clauses (I) through (VI) shall be
distributed to holders of the Class B-7H Certificates regardless of whether the
Certificate Balance thereof has been reduced to zero.
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.
(ii) On each Distribution Date, prior to the distributions to
the Certificates from the Upper-Tier Distribution Account pursuant to Section
4.01(c)(i), the Class A-1A-L Interest shall receive distributions in respect of
Prepayment Premiums distributable to the Class A-1A and Class A-CS1
Certificates, the Class A-1B-L Interest shall receive distributions in respect
of Prepayment Premiums distributable to the Class A-1B Certificates, the Class
A-1C-L Interest shall receive distributions in respect of Prepayment Premiums
distributable to the Class A-1C Certificates, the Class A-1D-L Interest shall
receive distributions in respect of Prepayment Premiums distributable to the
Class A-1D Certificates, the Class A-2-L Interest, shall receive distributions
in respect of Prepayment Premiums distributable to the Class PS-1 Certificates
pro rata based on the amounts of interest distributable to each such Class on
such Distribution Date and the Class B-7H-L Interest shall receive
distributions in respect of Prepayment Premiums distributable to the Class B-7H
Certificates, in each case from amounts on deposit in the Distribution Account.
The Class A-1A-L, Class A-1B-L, Class A-1C-L, Class A-1D-L, Class A-2-L and
Class B-7H-L Interests shall be entitled to receive distributions of such
Prepayment Premiums regardless of whether the respective Certificate Balances
have been reduced to zero.
(d) (i) On each Distribution Date, Net Default Interest for
such Distribution Date shall be distributed to the Class V-1 Certificates.
(ii) On any applicable Distribution Date, Excess Interest for
such Distribution Date shall be distributed to the Class V-2 Certificates.
(e) The Certificate Balances of each Class of Regular
Certificates (other than the Class A-CS1 and Class PS-1 Certificates) will be
reduced without distribution on any Distribution Date as a write-off to the
extent of any Realized Losses allocated to such Class with respect to such
date. Any such write-offs will be applied to Classes of Regular Certificates in
the following order, in each case until the Certificate Balance of such Class
is reduced to zero: first, to the Class B-7 Certificates and Class B-7H
Certificates, pro rata, based on their respective Certificate Balances; second
to the Class B-6 Certificates; third, to the Class B-5 Certificates; fourth, to
the Class B-4 Certificates, fifth, to the Class B-3 Certificates; sixth, to the
Class B-2 Certificates; seventh, to the Class B-1 Certificates; eighth, to the
Class A-8 Certificates; ninth, to the Class A-7 Certificates; tenth, to the
Class A-6 Certificates; eleventh, to the Class A-5 Certificates; twelfth, to
the Class A-4 Certificates; thirteenth, to the Class A-3 Certificates;
fourteenth, to the Class A-2 Certificates; fifteenth, to the Class A-1E
Certificates, and finally, to the Class A-1A, Class A-1B, A-1C and Class A-1D
Certificates, pro rata, based on their respective Certificate Balances.
Shortfalls in Available Funds due to servicing or trustee compensation other
than the Servicing Fee and the Trustee Fee (including servicing compensation
resulting solely from interest on Advances (to the extent not payable from
Default Interest)), extraordinary expenses of the Trust Fund (other than
indemnification expenses), a reduction in the Mortgage Rate on a Mortgage Loan
by a bankruptcy court pursuant to a plan of reorganization or pursuant to any
of its equitable powers, or otherwise, shall be allocated in the same manner as
Realized Losses.
Realized Losses and such other amounts described above which
are applied to each Class of Lower-Tier Regular Interests will be allocated to
reduce the Certificate Balance of the Related Certificates (and
correspondingly, to reduce the Component Balances of the related components).
(f) All amounts distributable to a Class of Certificates
pursuant to this Section 4.01 on each Distribution Date shall be allocated pro
rata among the outstanding Certificates in each such Class based on their
respective Percentage Interests. Such distributions shall be made on each
Distribution Date other than the Termination Date to each Certificateholder of
record or, in the case of the Classes of Certificates comprising the Units,
each Unitholder of record on the related Record Date by check mailed by first
Class mail to the address set forth therefor in the Certificate Register or,
provided that such Holder holds Certificates with an aggregate initial
Certificate Balance in excess of $5,000,000, and shall have provided the Paying
Agent with wire instructions in writing at least five Business Days prior to
the related Record Date, by wire transfer of immediately available funds to the
account of such Holder at a bank or other entity located in the United States
and having appropriate facilities therefor. The final distribution on each
Certificate shall be made in like manner, but only upon presentment and
surrender of such Certificate at the office of the Trustee or its agent (which
may be the Paying Agent or the Certificate Registrar acting as such agent)
maintained in the Borough of Manhattan that is specified in the notice to
Holders of such final distribution.
(g) Except as otherwise provided in Section 9.01 with respect
to an Anticipated Termination Date, the Trustee shall, no later than the
fifteenth day of the month in the month preceding the month in which the final
distribution with respect to any Class of Certificates is expected to be made,
mail to each Holder of such Class of Certificates, on such date a notice to the
effect that:
(A) the Trustee reasonably expects based upon
information previously provided to it that the final
distribution with respect to such Class of
Certificates will be made on such Distribution Date,
but only upon presentation and surrender of such
Certificates at the office of the Trustee therein
specified, and
(B) if such final distribution is made on such
Distribution Date, no interest shall accrue on such
Certificates from and after such Distribution Date;
provided, however, that the Class V-1, Class V-2, Class R and Class LR
Certificates shall remain outstanding until there is no other Class of
Certificates or Lower-Tier Regular Interests outstanding and the Class B-7H
Certificates shall be deemed to be outstanding so long as there are any
Mortgage Loans outstanding that provide for payments of Prepayment Premiums in
connection with voluntary or involuntary prepayments.
Any funds not distributed to any Holder or Holders of such
Classes of Certificates on such Distribution Date because of the failure of
such Holder or Holders to tender their Certificates shall, on such date, be set
aside and held in trust for the benefit of the appropriate non-tendering Holder
or Holders. If any Certificates as to which notice has been given pursuant to
this Section 4.01(g) shall not have been surrendered for cancellation within
six months after the time specified in such notice, the Trustee shall mail a
second notice to the remaining non-tendering Holders to surrender their
Certificates for cancellation to receive the final distribution with respect
thereto. If within one year after the second notice not all of such
Certificates shall have been surrendered for cancellation, the Trustee may,
directly or through an agent, take appropriate steps to contact the remaining
non-tendering Holders concerning surrender of their Certificates. The costs and
expenses of holding such funds in trust and of contacting such Holders 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 Trustee all amounts distributable to the Holders thereof, and
the Trustee shall thereafter hold such amounts for the benefit of such Holders
until the earlier of (i) its termination as Trustee hereunder and the transfer
of such amounts to a successor Trustee and (ii) the termination of the Trust
Fund and distribution of such amounts to the Class R Certificateholders. No
interest shall accrue or be payable to any Holder on any amount held in trust
hereunder or by the Trustee as a result of such Holder's failure to surrender
its Certificate(s) for final payment thereof in accordance with this Section
4.01(g). Any such amounts transferred to the Trustee may be invested in
Permitted Investments and all income and gain realized from investment of such
funds shall be for the benefit of the Trustee.
(h) Notwithstanding any provision in this Agreement to the
contrary, the aggregate amount distributable to each Class pursuant to this
Section 4.01 shall be reduced by the aggregate amount paid to any Person
pursuant to Section 6.03 or Section 8.05(b) and (d), such reduction to be
allocated among such Classes pro rata, based upon the respective amounts so
distributable without taking into account the provision of this Section
4.01(h). Such reduction of amounts otherwise distributable to a Class shall be
allocated first in respect of interest and second in respect of principal. For
purposes of determining Interest Shortfalls and Certificate Balances, the
amount of any such reduction so allocated to a Class shall be deemed to have
been distributed to such Class.
(i) On or after any Distribution Date on which the Class B-6
Certificates are the most subordinate class of Certificates outstanding, the
Certificate Balances of the Class B-6, Class B-5, Class B-4, Class B-3, Class
B-2, Class B-1, Class A-8, Class A-7, Class A-6, Class A-5, Class A-4, Class
A-3, Class A-2 and Class A-1E Certificates shall be notionally reduced on any
Distribution Date to the extent of any Delinquency Reduction Amounts or
Appraisal Reduction Amounts with respect to such Distribution Date; provided
that (i) if a Delinquency and an Appraisal Reduction Event occur with respect
to the same Distribution Date and the same Mortgage Loan, the reduction shall
equal the Appraisal Reduction Amount, (ii) following the occurrence of an
Appraisal Reduction Event with respect to any Mortgage Loan, no further
Delinquency Reduction Amounts shall be applied with respect to such Mortgage
Loan and any Delinquency Reduction Amounts previously applied shall be reversed
and (iii) for any Distribution Date, the aggregate of the Appraisal Reduction
Amounts and Delinquency Reduction Amounts shall not exceed the Certificate
Balance (as adjusted by any notional reductions) of the most subordinate class
of Certificates outstanding among the Class B-6, Class B-5, Class B-4, Class
B-3, Class B-2, Class B-1, Class A-8, Class A-7, Class A-6, Class A-5, Class
A-4, Class A-3, Class A-2 and Class A-1E Certificates (and to the extent the
aggregate of the Appraisal Reduction Amounts and Delinquency Reduction Amounts
exceeds such Certificate Balance, such excess shall be applied notionally to
the next most subordinate Class of Certificates on the next Distribution Date).
Any such reductions shall be applied notionally to the Class B-6 Certificates,
second, to the Class B-5 Certificates, third, to the Class B-4 Certificates,
fourth, to the Class B-3 Certificates, fifth, to the Class B-2 Certificates,
sixth, to the Class B-1 Certificates, seventh, to the Class A-8 Certificates,
eighth, to the Class A-7 Certificates, ninth, to the Class A-6 Certificates,
tenth to the Class A-5 Certificate, eleventh to the Class A-4 Certificates,
twelfth, to the Class A-3 Certificates, thirteenth, to the Class A-2
Certificates and finally, to the Class A-1E Certificates (provided in each case
that no Certificate Balance in respect of any such class shall be notionally
reduced below zero). Any notional reduction of the Certificate Balance of such
Certificates as a result of any Delinquency or Appraisal Reduction Event shall
be reversed to the extent there is a recovery of any or all of the Delinquency
Amounts or a Realized Loss. Additionally, a reversal or additional reduction
shall occur to the extent that the Servicer's Appraisal Estimate is less than
or greater than the Appraisal Reduction as adjusted to take into account a
subsequent independent MAI Appraisal. For purposes of calculating Interest
Accrual Amounts, any such reversal or additional reductions made on the
Distribution Date occurring in an Interest Accrual Period shall be deemed to
have been made on the first day of such Interest Accrual Period.
(j) Shortfalls in Available Funds resulting from (i)
unanticipated indemnification expenses of the Trust Fund and (ii) Prepayment
Interest Shortfalls in excess of Servicer Prepayment Interest Shortfalls, shall
be allocated to, and be deemed distributed to, each Class of Certificates, pro
rata, based upon amounts distributable to each such Class and, in the case of
indemnification expenses, be allocated, first, in respect of interest and,
second, in respect of principal. Servicer Prepayment Interest Shortfalls shall
be deposited by the Servicer into the Collection Account on or prior to the
Servicer Remittance Date.
SECTION 4.02. Statements to Certificateholders; Reports
by Trustee; Other Information Available
to the Holders and Others.
(a) On each Distribution Date, based upon the information set
forth in the Servicer Remittance Report prepared by the Servicer and the other
reports prepared by the Servicer and Special Servicer relating to such
Distribution Date, and only to the extent such information is provided to the
Trustee by the Servicer or Special Servicer, the Trustee shall prepare and
forward, or shall cause the Paying Agent to prepare and forward, by first class
mail to each Holder of a Certificate, with copies to the Depositor, the
Servicer, the Special Servicer, each Underwriter and each Rating Agency a
written report (a "Distribution Date Statement") setting forth the following
information:
(i) the aggregate amount of the distribution to be made on
such Distribution Date to the Holders of each Class of
Certificates (other than the Class R and Class LR
Certificates) applied to reduce the respective Certificate
Balance thereof;
(ii) the aggregate amount of the distribution to be made on
such Distribution Date to the Holders of each Class of
Certificates allocable to (A) the Interest Accrual Amount
less any Prepayment Interest Shortfalls (in excess of the
Prepayment Interest Shortfalls paid by the Servicer pursuant
to Section 4.01(j)), (B) Prepayment Premiums and/or (C)
Reduction Interest Distribution Amounts;
(iii) the aggregate Certificate Balance or aggregate Notional
Balance, as the case may be, of each Class of Certificates,
before and after giving effect to the distributions made on
such Distribution Date, separately identifying any reduction
in the aggregate Certificate Balance (or, if applicable, the
aggregate Notional Balance) of each such Class due to
Realized Losses and/or additional Trust Fund expenses;
(iv) the Pass-Through Rate and the Reduction Interest
Pass-Through Rate, if any, for each Class of Certificates
applicable to such Distribution Date;
(v) the number of outstanding Mortgage Loans and the
aggregate unpaid principal balance of the Mortgage Loans at
the close of business on the related Due Date;
(vi) the number and aggregate unpaid principal balance of
Mortgage Loans (A) delinquent one Collection Period, (B)
delinquent two Collection Periods, (C) delinquent three or
more Collection Periods, (D) that are Specially Serviced
Mortgage Loans that are not delinquent, or (E) as to which
foreclosure proceedings have been commenced;
(vii) with respect to any REO Mortgage Loan as to which the
related Mortgaged Property became an REO Property during the
preceding calendar month, the city, state, property type,
latest Debt Service Coverage Ratio, Stated Principal Balance
and the unpaid principal balance of such Mortgage Loan as of
the date it became an REO Mortgage Loan;
(viii) as to any Mortgage Loan repurchased by the Mortgage
Loan Seller or otherwise liquidated or disposed of during the
related Collection Period, (A) the Loan Number of the related
Mortgage Loan and (B) the amount of proceeds of any
repurchase of a Mortgage Loan, Liquidation Proceeds and/or
other amounts, if any, received thereon during the related
Collection Period and the portion thereof included in the
Available Funds for such Distribution Date;
(ix) with respect to any REO Property included in the Trust
Fund at the close of business on the related Due Date (A) the
Loan Number of the related Mortgage Loan, (B) the value of
such REO Property based on the most recent appraisal or
valuation, and (C) the aggregate amount of Net Income and
other revenues collected by the Special Servicer with respect
to such REO Property during the related Collection Period and
the portion thereof included in the Available Funds for such
Distribution Date;
(x) with respect to any REO Property sold or otherwise
disposed of during the related Collection Period and for
which a Final Recovery Determination has been made, (A) the
Loan Number of the related Mortgage Loan, (B) the Realized
Loss attributable to such Mortgage Loan, (C) the amount of
sale proceeds and other amounts, if any, received in respect
of such REO Property during the related Collection Period and
the portion thereof included in the Available Funds for such
Distribution Date and (D) the date of the Final Recovery
Determination;
(xi) [Intentionally left blank];
(xii) the aggregate amount of Principal Prepayments (other
than Liquidation Proceeds and Insurance Proceeds) made during
the related Collection Period and any Prepayment Interest
Shortfall in excess of Servicer Prepayment Interest Shortfall
for such Distribution Date;
(xiii) the amount of Property Advances and P&I Advances
outstanding (net of reimbursed Advances) which have been made
by the Servicer, the Special Servicer the Trustee, or the
Fiscal Agent in the aggregate and by Mortgaged Property or
Mortgage Loan, as the case may be;
(xiv) the aggregate amount of Servicing Fees, Special
Servicing Fees, Principal Recovery Fees and other servicing
compensation retained by or paid to the Servicer and the
Special Servicer during the related Collection Period;
(xv) the amount of any Appraisal Reduction Amounts allocated
during the related Collection Period on a loan-by-loan basis;
the total Appraisal Reduction Amounts allocated during the
related Collection Period; and the total Appraisal Reduction
Amounts as of such Distribution Date on a loan-by-loan basis;
and
(xvi) the amount of Realized Losses, Trust Fund expenses,
Interest Shortfalls, and Reduction Interest Shortfalls if
any, incurred with respect to the Mortgage Loans during the
related Collection Period and in the aggregate for all prior
Collection Periods (except to the extent reimbursed or paid).
In the case of information furnished pursuant to subclauses
(i), (ii) and (iii) above, the amounts shall be expressed as a dollar amount in
the aggregate for all Certificates of each applicable Class and per $1,000 of
original Certificate Balance or Notional Balance, as the case may be.
On each Distribution Date, the Trustee shall forward to each
Holder of a Class R or Class LR Certificate a copy of the reports forwarded to
the other Certificateholders on such Distribution Date and a statement setting
forth the amounts, if any, actually distributed with respect to the Class R or
Class LR Certificates on such Distribution Date. 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.
Within a reasonable period of time after the end of each
calendar year, the Trustee shall send to each Person who at any time during the
calendar year was a Certificateholder of record, a report summarizing on an
annual basis (if appropriate) the items provided to Certificateholders pursuant
to Section 4.02(a)(ii) above and such other information as may be required to
enable such Certificateholders to prepare their federal income tax returns.
Such information shall include the amount of original issue discount accrued on
each Class of Certificates held by Persons other than Holders exempted from the
reporting requirements and information regarding the expenses of the Trust.
Such requirement shall be deemed to be satisfied to the extent such information
is provided pursuant to applicable requirements of the Code from time to time
in force.
(b) On each Distribution Date, the Trustee shall deliver or
cause to be delivered by first class mail to each Certificateholder, each
prospective investor in a Certificate (upon request), the Depositor, the
Servicer, the Special Servicer, each Underwriter, and each Rating Agency a
report containing information regarding the Mortgage Loans as of the end of the
related Collection Period (after giving effect to Principal Prepayments and
other collections of principal required to be distributed on such Distribution
Date), which report shall contain substantially the categories of information
regarding the Mortgage Loans set forth in the Prospectus under the caption
"Description of the Mortgage Pool--Certain Terms and Conditions of the Mortgage
Loans" (calculated, where applicable, on the basis of the most recent relevant
information provided by the Borrowers to the Servicer or the Special Servicer,
as the case may be, and by the Servicer or the Special Servicer, as the case
may be, to the Trustee), which shall also include a loan-by-loan listing (in
descending balance order) showing loan name, property type, location, unpaid
principal balance, Mortgage Rate, paid through date, maturity date, net
interest portion of the Monthly Payment, principal portion of the Monthly
Payment and any Prepayment Premium. Such report shall be made available
electronically; provided, however, that the Trustee will provide
Certificateholders with a written copy of such report upon written request.
(c) On each Distribution Date, the Trustee shall deliver or
shall cause to be delivered by first class mail to each Certificateholder, each
prospective investor in a Certificate (upon request), Beneficial Owner (if
known), the Depositor, each Underwriter and each Rating Agency a copy of the
Comparative Financial Status Report, the Delinquent Loan Status Report, the
Historical Loss Estimate Report, the Historical Loan Modification Report, the
REO Status Report and a Watch List (indicating those Mortgage Loans that the
Servicer has determined are in jeopardy of becoming Specially Serviced Mortgage
Loans) provided by the Servicer to the Trustee pursuant to Section 3.13(c) and
3.13(e) on the Servicer Remittance Date. The information that pertains to
Specially Serviced Mortgage Loans and REO Properties reflected in such reports
shall be based solely upon the reports delivered by the Special Servicer to the
Servicer at least one Business Day prior to the related Servicer Remittance
Date. Absent manifest error, (i) none of the Servicer, the Special Servicer or
the Trustee shall be responsible for the accuracy or completeness of any
information supplied to it by a Borrower or third party that is included in any
reports, statements, materials or information prepared or provided by the
Servicer, the Special Servicer or the Trustee, as applicable, (ii) the Trustee
shall not be responsible for the accuracy or completeness of any information
supplied to it by the Servicer or Special Servicer that is included in any
reports, statements, materials or information prepared or provided by the
Servicer or Special Servicer, as applicable, and (iii) the Trustee shall be
entitled to conclusively rely upon the Servicer's reports and the Special
Servicer's reports without any duty or obligation to recompute, verify or
re-evaluate any of the amounts or other information stated therein.
The Trustee shall deliver a copy of each Operating Statement
Analysis report and NOI Adjustment Worksheet that it receives from the Servicer
and Special Servicer to the Depositor, each Underwriter and each Rating Agency
promptly after its receipt thereof. Upon request, the Trustee shall make such
reports available to the Certificateholders and the Special Servicer. Upon
request, the Trustee shall also make available any NOI Adjustment Worksheet for
a Mortgaged Property or REO Property in the possession of the Trustee to any
potential investor in the Certificates.
(d) The Trustee shall make available at its offices, during
normal business hours, upon not less than two Business Day's prior notice, for
review by any Certificateholder, any prospective investor in a Certificate, the
Depositor, the Servicer, the Special Servicer, either Rating Agency, and any
other Person to whom the Depositor believes such disclosure is appropriate,
originals or copies of documents relating to the Mortgage Loans and any related
REO Properties to the extent in its possession, including, without limitation,
the following items (except to the extent prohibited by applicable law or by
the terms of any of the Mortgage Documents): (i) this Agreement and any
amendments thereto; (ii) all Distribution Date Statements delivered to the
Certificateholders since the Closing Date; (iii) all annual Officers'
Certificates and all accountants' reports delivered by the Servicer or Special
Servicer to the Trustee since the Closing Date regarding compliance with the
relevant agreements; (iv) the most recent property inspection report prepared
by or on behalf of the Servicer or the Special Servicer in respect of each
Mortgaged Property; (v) the most recent annual (or more frequent, if available)
operating statements, rent rolls (to the extent such rent rolls have been made
available by the related Borrower) and/or lease summaries and retail sales
information, if any, collected by or on behalf of the Servicer or the Special
Servicer in respect to each Mortgaged Property; (vi) any and all modifications,
waivers and amendments of the terms of a Mortgage Loan entered into by the
Servicer and/or the Special Servicer; (vii) any and all Officers' Certificates
and other evidence delivered to or by the Trustee to support the Servicer's,
the Trustee's or the Fiscal Agent's, as the case may be, determination that any
Advance, if made, would be a Nonrecoverable Advance; and (viii) any other
materials not otherwise required to be provided hereunder provided to a
requesting Certificateholder as provided in this Agreement in situations where
such requesting Certificateholder declined to enter into a confidentiality
agreement with the Servicer. Copies of any and all of the foregoing items will
be available from the Trustee upon request. The Trustee will be permitted to
require payment by the requesting party (other than a Rating Agency) of a sum
sufficient to cover the reasonable costs and expenses of making such
information available and providing any copies thereof. The Trustee's
obligation under this Section 4.02(d) to make available any document is subject
to the Trustee's receipt of such document.
The Trustee shall provide access to the information in the
Distribution Date Statements referred to in Section 4.02(a) telephonically
through the Trustee's ASAP System or by such other mechanism as the Trustee may
have in place from time to time.
(e) On or within two Business Days following each
Distribution Date, the Trustee shall prepare and furnish to the Financial
Market Publisher and the Underwriter, using the format and media mutually
agreed upon by the Trustee, the Financial Market Publisher and the
Underwriters, the following information regarding each Mortgage Loan and any
other information reasonably requested by the Underwriters and available to the
Trustee:
(i) the Loan Number;
(ii) each related Mortgage Rate; and
(iii) the principal balance as of such
Distribution Date.
The Trustee shall only be obligated to deliver the statements, reports and
information contemplated by Section 4.02 to the extent it receives the
necessary underlying information from the Servicer or the Special Servicer and
shall not be liable for any failure to deliver any thereof on the prescribed
due dates, to the extent caused by failure to receive timely such underlying
information. Nothing herein shall obligate the Trustee, the Servicer or the
Special Servicer to violate any applicable law prohibiting disclosure of
information with respect to any Borrower and the failure of the Trustee, the
Servicer or the Special Servicer to disseminate information for such reason
shall not be a breach hereof.
SECTION 4.03. 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 Holder that is
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 is not a "10-percent shareholder" within the meaning of Code Section
871(h)(3)(B) or a "controlled foreign corporation" described in Code Section
881(c)(3)(C) with respect to the Trust Fund or the Depositor, or (ii) an
effective Form 4224 or an acceptable substitute form or a successor form. In
the event the Paying Agent or its agent withholds any amount from interest or
original issue discount payments or advances thereof to any Certificateholder
pursuant to federal withholding requirements, the Paying Agent shall indicate
the amount withheld to such Certificateholder or, in the case of the Classes of
Certificates comprising the Units, such Unitholder. Any amount so withheld
shall be treated as having been distributed to such Certificateholder or
Unitholder for all purposes of this Agreement.
SECTION 4.04. REMIC Compliance.
(a) The parties intend that each of the Upper-Tier REMIC and
the Lower-Tier REMIC shall constitute, and that the affairs of each of the
Upper-Tier REMIC and the Lower-Tier REMIC 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 the Upper-Tier REMIC and the
Lower-Tier REMIC and shall on behalf of each of the Upper-Tier REMIC and the
Lower-Tier REMIC: (i) prepare, sign and file, or cause to be prepared and
filed, all required Tax Returns for each of the Upper-Tier REMIC and the
Lower-Tier REMIC, using a calendar year as the taxable year for each of the
Upper-Tier REMIC and the Lower-Tier REMIC 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 the Upper-Tier REMIC and the Lower-Tier
REMIC, 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 of the Code and Section 4.07; (iv) if the filing or distribution of
any documents of an administrative nature not addressed in clauses (i) through
(iii) of this Section 4.05(a) is then required by the REMIC Provisions in order
to maintain the status of the Upper-Tier REMIC or the Lower-Tier REMIC 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 the Upper-Tier REMIC and the Lower-Tier REMIC 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
Servicer, the Special Servicer or the Trustee and necessary to make such
filing); and (vi) maintain such records relating to each of the Upper-Tier
REMIC and the Lower-Tier REMIC as may be necessary to prepare the foregoing
returns, schedules, statements or information, such records, for federal income
tax purposes, to be maintained on a calendar year and on an accrual basis. The
Holder of the largest Percentage Interest in the Class R or Class LR
Certificates shall be the tax matters person of the Upper-Tier REMIC or the
Lower-Tier REMIC, 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 or Class LR Certificates larger than that held by any other
Holder, the first such Holder to have acquired such Class R or Class LR
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 the Upper-Tier
REMIC and Lower-Tier REMIC, and each Holder of a Percentage Interest in the
Class R or Class LR Certificates, by acceptance hereof, 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 the Upper-Tier REMIC or the Lower-Tier REMIC or the imposition of tax on the
Upper-Tier REMIC or the Lower-Tier REMIC (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, the Servicer or the Special
Servicer which does not enable the Trustee 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" within 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 the Upper-Tier
REMIC or Lower-Tier REMIC to tax (other than a tax at the highest marginal
corporate tax rate on net income from foreclosure property), or (C) cause
either the Upper-Tier REMIC or Lower-Tier REMIC 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 Servicer, the Special
Servicer and the Depositor shall be responsible or liable (except in connection
with any act or omission referred to in the two preceding sentences) for any
failure by the Trustee to comply with the provisions of this Section 4.04. The
Depositor, the Servicer and the Special Servicer shall cooperate in a timely
manner with the Trustee in supplying any information within the Depositor's,
the Servicer's or the Special Servicer's control (other than any confidential
information) that is reasonably necessary to enable the Trustee to perform its
duties under this Section 4.04.
(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; (ii) none of the Servicer, the
Depositor and the Class LR Certificateholders will exercise the right described
in Section 9.01 of this Agreement to cause early termination of the Trust Fund;
and (iii) no Mortgage Loan is repurchased by the Mortgage Loan Seller, the
Depositor or an Mortgage Loan Seller pursuant to Article II hereof. Unless and
until required otherwise by applicable Treasury Regulations, the Trustee shall
treat the Units as a single aggregate debt instrument for original issue
discount computation and reporting purposes.
SECTION 4.05. 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 the
Upper-Tier REMIC or Lower-Tier REMIC, 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 the REO Property (and until such
taxes are paid, the Special Servicer from time to time shall withdraw from the
REO Account and transfer to the Trustee amounts reasonably determined by the
Trustee to be necessary to pay such taxes, which the Trustee shall maintain in
a separate, non-interest-bearing account, and the Trustee shall deposit in the
Collection Account the excess determined by the Trustee from time to time of
the amount in such account over the amount necessary to pay such taxes) and
shall be paid therefrom; provided that any such tax imposed on net income from
foreclosure property that exceeds the amount in any such reserve shall be
retained from Available Funds as provided in Section 3.06(viii) and the next
sentence. Except as provided in the preceding sentence, the Trustee is hereby
authorized to and shall retain or cause to be retained from Available Funds
sufficient funds to pay or provide for the payment of, and to actually pay,
such tax as is legally owed by the Upper-Tier REMIC or Lower-Tier REMIC (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, into 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 the Upper-Tier REMIC or Lower-Tier REMIC
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 (and return the
balance thereof, if any, to the Collection Account or the Upper-Tier
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 or
the Class LR Certificates as the case may be, and shall distribute such
retained amounts to the Holders of Regular Certificates or Lower-Tier Regular
Interests, as applicable, until they are fully reimbursed and then to the
Holders of the Class R Certificates or the Class LR Certificates, as
applicable. Neither the Servicer, the Special Servicer nor the Trustee shall be
responsible for any taxes imposed on the Upper-Tier REMIC or Lower-Tier REMIC
except to the extent such tax is attributable to a breach of a representation
or warranty of the Servicer, the Special Servicer or the Trustee or an act or
omission of the Servicer, the Special Servicer or the Trustee in contravention
of this Agreement in both cases, provided, further, that such breach, act or
omission could result in liability under Section 6.03, in the case of the
Servicer or Section 4.04 or 8.01, in the case of the Trustee. Notwithstanding
anything in this Agreement to the contrary, in each such case, the Servicer or
the Special Servicer shall not be responsible for Trustee's breaches, acts or
omissions, and the Trustee shall not be responsible for the breaches, acts or
omissions of the Servicer or the Special Servicer.
SECTION 4.06. Remittances; P&I Advances.
(a) "Applicable Monthly Payment" shall mean, for any Mortgage
Loan with respect to any month, (A) if such Mortgage Loan is delinquent as to
its Balloon Payment (including any such Mortgage Loan as to which the related
Mortgaged Property has become an REO Property), the related Assumed Scheduled
Payment, (B) if such Mortgage Loan has been extended in accordance with the
terms and conditions otherwise set forth in this Agreement, the Minimum
Defaulted Monthly Payment and (C) if such Mortgage Loan is not described by the
preceding two sentences (including any such Mortgage Loan as to which the
related Mortgaged Property has become an REO Property), the Monthly Payment
(after giving effect to any modification other than as described in (A) or (B)
above); provided, however, that for purposes of calculating the amount of any
P&I Advance required to be made by the Servicer, the Trustee or the Fiscal
Agent, notwithstanding the amount of such Applicable Monthly Payment, interest
shall be calculated at the Mortgage Pass-Through Rate. The Applicable Monthly
Payment shall be reduced, for purposes of P&I Advances, by any modifications
pursuant to Section 3.30 or otherwise and by any reductions by a bankruptcy
court pursuant to a plan of reorganization or pursuant to any of its equitable
powers.
(b) On the Servicer Remittance Date immediately preceding
each Distribution Date, the Servicer shall:
(i) remit to the Trustee for deposit in the
Distribution Account an amount equal to the
Prepayment Premiums received by the
Servicer or Special Servicer in the
Collection Period preceding such
Distribution Date;
(ii) remit to the Trustee for deposit in the
Distribution Account an amount equal to the
aggregate of the Available Funds (other
than P&I Advances) and Subordinate Class
Advance Recoveries for such Distribution
Date; and
(iii) make a P&I Advance, by depositing into the
Distribution Account, in an amount equal to
the sum of the Applicable Monthly Payments
for each Mortgage Loan to the extent such
amounts were not received on such Mortgage
Loan as of the close of business on the
immediately preceding Due Date (and
therefore are not included in the
remittance described in the preceding
clause (ii)).
(c) [Intentionally left blank].
(d) Notwithstanding Section 4.06(b)(iii), the Servicer shall
(i) make only one full advance in respect of each Mortgage Loan pursuant to
such Section in respect of the most subordinate Class of Certificates then
outstanding unless the related Delinquency is cured prior to the following Due
Date and (ii) not make any P&I Advance in respect of Reduction Interest
Distribution Amounts and Reduction Interest Shortfalls, and accordingly, the
Servicer may reduce the aggregate amount of P&I Advances to be deposited by the
Servicer on the related Servicer Remittance Date in respect of such amounts the
Servicer is not required to advance. For purposes of clause (i) of the
preceding sentence, the Servicer shall reduce the aggregate amount of the P&I
Advance it would otherwise be required to make with respect to any Mortgage
Loans that have had more than one uncured Delinquency by the lesser of (a) the
total amount that would be distributable to the most subordinate outstanding
Class in respect of all Mortgage Loans on such Distribution Date if the
Servicer were to make a full P&I Advance and (b) the amount of the delinquent
Monthly Payment on such Mortgage Loans. In the event that there is more than
one Mortgage Loan that has had more than one uncured Delinquency as of any
Servicer Remittance Date and the amount determined pursuant to clause (b) of
the preceding sentence exceeds the P&I amount determined pursuant to clause (a)
thereof, the P&I Advance that the Servicer makes in respect of such Delinquent
Loans (i.e., the amount by which clause (b) exceeds clause (a) will be deemed
to have been made in respect of such delinquent Monthly Payment, pro rata in
accordance with the amounts of delinquent Monthly Payments. (The first P&I
Advance made by the Servicer in respect of a Mortgage Loan shall be deemed to
be in respect of the most subordinate Class for purposes of clause (i) of the
last sentence of this paragraph.) In addition, on any Servicer Remittance Date
on which the Servicer is not required to make a P&I Advance for the benefit of
the most subordinate class as described above, the Servicer shall initially
make such P&I Advance (for accounting purposes only) and shall, immediately
subsequent to the making of the P&I Advance on such Servicer Remittance Date,
reimburse itself for such P&I Advance from amounts otherwise distributable to
such most subordinate class on the related Distribution Date (such amount of
reimbursement or any amount not advanced by the Servicer which, if advanced,
could have been so reimbursed, the "Subordinate Class Advance Amount"). The
Trustee shall provide to the Servicer written statements one Business Day prior
to the Servicer Remittance Date listing (i) the aggregate Reduction Interest
Distribution Amounts and Reduction Interest Shortfalls for such Distribution
Date and (ii) the distribution due to the Holders of the most subordinate Class
of Certificates.
(e) The Servicer shall not be required or permitted to make
an advance for Excess Interest or Default Interest or in respect of Reduction
Interest Distribution Amounts and Reduction Interest Shortfalls. The amount
required to be advanced by the Servicer in respect of Applicable Monthly
Payments on Mortgage Loans that have been subject to an Appraisal Reduction
Event will equal the product of (i) the amount required to be advanced by the
Servicer without giving effect to such Appraisal Reduction Amounts and (ii) a
fraction, the numerator of which is the Stated Principal Balance of the
Mortgage Loan (as of the last day of the related Collection Period) less any
Appraisal Reduction Amounts thereof and the denominator of which is the Stated
Principal Balance (as of the last day of the related Collection Period). The
amount to be advanced by the Servicer in respect of any Mortgage Loan on any
Distribution Date shall be reduced by the greater of the reduction in respect
of any Appraisal Reduction Event and the reduction described in clause (d)(i)
above.
(f) Any amount advanced by the Servicer pursuant to Section
4.06(b)(iii) shall constitute a P&I Advance for all purposes of this Agreement
and the Servicer shall be entitled to reimbursement (with interest at the
Advance Rate) thereof to the full extent as otherwise set forth in this
Agreement.
(g) If as of 11:00 a.m., New York City time, on any
Distribution Date the Servicer shall not have made the P&I Advance required to
have been made on the related Servicer Remittance Date pursuant to Section
4.06(b)(iii), the Trustee shall immediately notify the Fiscal Agent by
telephone promptly confirmed in writing, and the Trustee shall no later than
12:00 noon, New York City time, on such Business Day 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 Servicer. If the Trustee
fails to make any P&I Advance required to be made under this Section 4.06, the
Fiscal Agent shall make such P&I Advance not later than 2:00 p.m., New York
City time, on such Business Day and, thereby, the Trustee shall not be in
default under this Agreement.
(h) None of the Servicer, the Trustee or the Fiscal Agent
shall be obligated to make a P&I Advance as to any Monthly Payment or Assumed
Scheduled Payment or Minimum Defaulted Monthly Payment on any date on which a
P&I Advance is otherwise required to be made by this Section 4.06 if the
Servicer, the Trustee or Fiscal Agent, as applicable, determines that such
advance will be a Nonrecoverable Advance. The Servicer shall be required to
provide notice to the Trustee and the Fiscal Agent on or prior to the Servicer
Remittance Date of any such non-recoverability determination made on or prior
to such date. The Trustee and the Fiscal Agent shall be entitled to rely,
conclusively, on any determination by the Servicer that a P&I Advance, if made,
would be a Nonrecoverable Advance (and with respect to a P&I Advance, the
Trustee or the Fiscal Agent, as applicable, shall rely on the Servicer's
determination that the Advance would be a Nonrecoverable Advance if the Trustee
or Fiscal Agent, as applicable, determines that it does not have sufficient
time to make such determination); provided, however, that if the Servicer has
failed to make a P&I Advance for reasons other than a determination by the
Servicer that such Advance would be a Nonrecoverable Advance, the Trustee or
Fiscal Agent, as applicable, shall make such advance within the time periods
required by Section 4.06(g) unless the Trustee or the Fiscal Agent, in good
faith, makes a determination prior to the times specified in Section 4.06(g)
that such advance would be a Nonrecoverable Advance. The Trustee and the Fiscal
Agent, in determining whether or not an Advance previously made is, or a
proposed Advance, if made, would be, a Nonrecoverable Advance shall be subject
to the standards applicable to the Servicer hereunder.
(i) The Servicer, the Trustee or the Fiscal Agent, as
applicable, shall be entitled to the reimbursement of P&I Advances it makes to
the extent permitted pursuant to Section 3.06(ii) of this Agreement together
with any related Advance Interest Amount in respect of such P&I Advances to the
extent permitted pursuant to Section 3.06(iii) and the Servicer and Special
Servicer hereby covenant and agree to promptly seek and effect the
reimbursement of such Advances from the related Borrowers to the extent
permitted by applicable law and the related Mortgage Loan.
SECTION 4.07. Grantor Trust Reporting.
The parties intend that the portions of the Trust Fund
consisting of (i) the Default Interest and the Default Interest Distribution
Account and (ii) the Excess Interest and the Excess Interest Distribution
Account shall constitute, and that the affairs of the Trust Fund (exclusive of
the Trust REMICs) shall be conducted so as to qualify such portion as a
"grantor trust" under the Code, and the provisions hereof shall be interpreted
consistently with this intention. In furtherance of such intention, the Trustee
shall furnish or cause to be furnished to Class V-1 and Class V-2
Certificateholders and shall file or cause to be filed with the Internal
Revenue Service together with Form 1041 or such other form as may be
applicable, income with respect to their applicable share of Default Interest
and the amount of any interest on unreimbursed Advances payable to the
Servicer, the Trustee and the Fiscal Agent, as applicable, therefrom pursuant
to Section 3.06(iii) in the case of the Class V-1 Certificates, and Excess
Interest in the case of the Class V-2 Certificates, at the time or times and in
the manner required by the Code.
ARTICLE V
THE CERTIFICATES
SECTION 5.01. The Certificates.
(a) The Certificates consist of the Class A-1A Certificates,
the Class A-1B Certificates, the Class A-1C Certificates, the Class A-1D
Certificates, the Class A-CS1 Certificates, the Class PS-1 Certificates, the
Class A-1E Certificates, the Class A-2 Certificates, the Class A-3
Certificates, the Class A-4 Certificates, the Class A-5 Certificates, the Class
A-6 Certificates, the Class A-7 Certificates, the Class A-8 Certificates, the
Class B-1 Certificates, the Class B-2 Certificates, the Class B-3 Certificates,
the Class B-4 Certificates, the Class B-5 Certificates, the Class B-6
Certificates, the Class B-7 Certificates, the Class B-7H Certificates, the
Class V-1 Certificates, the Class V-2 Certificates, the Class R Certificates
and the Class LR Certificates.
The Class A-1A, Class A-1B, Class A-1C, Class A-1D, Class
A-CS1, Class PS-1, Class A-1E, Class A-2, Class A-3, Class A-4, Class A-5,
Class A-6, Class A-7, Class A-8, Class B-1, Class B-2, Class B-3, Class B-4,
Class B-5, Class B-6, Class B-7, Class B-7H, Class V-1, Class V-2, Class R and
Class LR Certificates will be substantially in the forms annexed hereto as
Exhibits A-1 through A-19, as set forth in the Table of Exhibits hereto. The
Certificates of each Class will be issuable in registered form only, in minimum
denominations of authorized Certificate Balance or Notional Balance, as
applicable, as described in the succeeding table, and multiples of $1 in excess
thereof (or such lesser amount if the Certificate or Notional Balance, as
applicable, is not a multiple of $1) except with respect to the Class B-1,
Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates, which
may be in multiples of $5, $5, $2, $3, $2 and $2, respectively, in excess
thereof. Notwithstanding the foregoing, one Individual Certificate for each of
the Class B-1 and B-2 and Class B-4 Certificates shall be issued, each having
an initial Certificate Balance of $9.00. With respect to any Certificate or any
beneficial interest in a Certificate, the "Denomination" thereof shall be (i)
the amount (A) set forth on the face thereof or (B) in the case of any Global
Certificate, set forth on a schedule attached thereto or, in the case of any
beneficial interest in a Global Certificate, the amount set forth on the books
and records of the related Participant or Indirect Participant, as applicable,
(ii) expressed in terms of Initial Certificate Balance or Notional Balance, as
applicable, and (iii) be in an authorized denomination, as set forth below.
Minimum Aggregate Denomination of all
Class Denomination Certificates of Class
A-1A $50,000.00 $127,000,000.00
A-1B $50,000.00 $91,010,000.00
A-1C $50,000.00 $65,000,000.00
A-1D $50,000.00 $671,228,903.00
A-CS1(1) $50,000.00 $84,197,550.00
PS-1(2) $50,000.00 $127,000,000.00
A-1E $50,000.00 $1,403,292,505.00
A-2 $50,000.00 $28,065,850.00
A-3 $50,000.00 $49,115,237.00
A-4 $50,000.00 $21,049,387.00
A-5 $50,000.00 $42,098,775.00
A-6 $50,000.00 $28,065,850.00
A-7 $50,000.00 $21,049,387.00
A-8 $50,000.00 $21,049,387.00
B-1 $50,000.00 $35,082,312.00
B-2 $50,000.00 $35,082,312.00
B-3 $20,000.00 $14,032,925.00
B-4 $30,000.00 $21,049,387.00
B-5 $20,000.00 $14,032,925.00
B-6 $20,000.00 $14,032,925.00
B-7 $100,000.00 $21,048,393.00
B-7H $ 1,000.00 $1,000.35
The Class B-7 Certificates shall each be issued as one or
more Individual Certificates, substantially in the form of Exhibit A-22 hereto.
Such Certificates shall not be issuable as Global Certificates unless the
Depositor determines that issuance in such form is feasible under Procedures of
the Depository (after consideration of the date of the Distribution Date and
the requirements of the Depository) and the Paying Agent concurs in such
determination.
Each Certificate will share ratably in all rights of the
related Class. The Class B-7H Certificates shall be issuable in a single,
registered definitive physical certificate evidencing its aggregate initial
Certificate Balance. The Class V-1, Class V-2, Class R and LR Certificates will
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.
The Global Certificates shall be issued as one or more
certificates registered in the name of a nominee designated by the Depository,
and Beneficial Owners shall hold interests in the Global Certificates through
the book-entry facilities of the Depository in the minimum Denominations and
aggregate Denominations and Classes as set forth above. The Global Certificates
representing each of the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5
and Class B-6 Certificates shall be issued as and, prior to the Separation Date
with respect to any such Class, shall comprise a part of the Units. All
references to the Global Certificates herein are deemed to include the Global
Certificate comprising the Units.
The Global Certificates shall in all respects be entitled to
the same benefits under this Agreement as Individual Certificates authenticated
and delivered hereunder.
(b) Except insofar as pertains to any Individual Certificate,
the Trust Fund, the Paying Agent and the Trustee may for all purposes
(including the making of payments due on the Global Certificates and the giving
of notice to Holders thereof) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Global Certificates
for the purposes of exercising the rights of Certificateholders hereunder;
provided, however, that, for purposes of providing information pursuant to
Section 3.22 or transmitting communications pursuant to Section 5.05(a), to the
extent that the Depositor has provided the Trustee with the names of
Certificateholders (even if such Certificateholders hold their Certificates
through the Depository) the Trustee shall provide such information to such
Beneficial Owners directly. The rights of Beneficial Owners with respect to
Global Certificates shall be limited to those established by law and agreements
between such Certificateholders and the Depository and Depository Participants.
Except as set forth in Section 5.01(e) below, Beneficial Owners of Global
Certificates shall not be entitled to physical certificates for the Global
Certificates as to which they are the Beneficial Owners. Requests and
directions from, and votes of, the Depository as Holder of the Global
Certificates shall not be deemed inconsistent if they are made with respect to
different Beneficial Owners. The Certificate Registrar may establish a
reasonable record date in connection with solicitations of consents from or
voting by Certificateholders and give notice to the Depository of such record
date. Without the written consent of the Depositor and the Certificate
Registrar, no Global Certificate may be transferred by the Depository except to
a successor Depository that agrees to hold the Global Certificates for the
account of the Beneficial Owners.
(c) 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.
(d) The Global Certificates (i) shall be delivered by the
Certificate Registrar to the Depository or, pursuant to the Depository's
instructions on behalf of the Depository to, and deposited with, the
Certificate Custodian, and in either case shall be registered in the name of
Cede & Co. and (ii) shall bear a legend substantially to the following effect:
"Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York
corporation ("DTC"), to the Certificate Registrar for
registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or
in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co.
or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
inasmuch as the registered owner hereof, Cede & Co., has an
interest herein."
The Global Certificates may be deposited with such other
Depository as the Certificate Registrar may from time to time designate, and
shall bear such legend as may be appropriate.
(e) If (i) the Depository advises the Trustee in writing that
the Depository is no longer willing, qualified or able properly to discharge
its responsibilities as Depository, and the Trustee is unable to locate a
qualified successor, (ii) the Depositor or the Trustee, at its sole option,
elects to terminate the book-entry system through the Depository with respect
to all or any portion of any Class of Certificates or (iii) after the
occurrence of an Event of Default, Beneficial Owners owning not less than a
majority in Certificate Balance or Notional Balance, as applicable, of the
Global Certificate for any Class then outstanding advise the Depository through
Depository Participants in writing that the continuation of a book-entry system
through the Depository is no longer in the best interest of the Beneficial
Owner or Owners of such Global Certificate, the Trustee shall notify the
affected Beneficial Owner or Owners through the Depository of the occurrence of
such event and the availability of Individual Certificates to such Beneficial
Owners requesting them. Upon surrender to the Trustee of Global Certificates by
the Depository, accompanied by registration instructions from the Depository
for registration of transfer, the Trustee shall issue the Individual
Certificates. Neither the Trustee, the Fiscal Agent, the Certificate Registrar,
the Servicer, the Special Servicer nor the Depositor shall be liable for any
actions taken by the Depository or its nominee, including, without limitation,
any delay in delivery of such instructions. Upon the issuance of Individual
Certificates, the Trustee, the Fiscal Agent, the Certificate Registrar, the
Servicer, the Special Servicer, and the Depositor shall recognize the Holders
of Individual Certificates as Certificateholders hereunder.
(f) If the Trustee, its agents or the Servicer or Special
Servicer has instituted or has been directed to institute any judicial
proceeding in a court to enforce the rights of the Certificateholders under the
Certificates, and the Trustee, the Servicer or the Special Servicer has been
advised by counsel that in connection with such proceeding it is necessary or
appropriate for the Trustee, the Servicer or the Special Servicer to obtain
possession of the Certificates, the Trustee, the Servicer or the Special
Servicer may in its sole discretion determine that the Certificates represented
by the Global Certificates shall no longer be represented by such Global
Certificates. In such event, the Trustee or the Authenticating Agent will
execute and authenticate and the Certificate Registrar will deliver, in
exchange for such Global Certificates, Individual Certificates (and if the
Trustee or the Certificate Custodian has in its possession Individual
Certificates previously executed, the Authenticating Agent will authenticate
and the Certificate Registrar will deliver such Certificates) in a Denomination
equal to the aggregate Denomination of such Global Certificates.
(g) If the Trust Fund ceases to be subject to Section 13 or
15(d) of the Exchange Act, the Trustee shall make available to each Holder of a
Class B-7, Class B-7H, Class V-1, Class V-2, Class R or Class LR Certificate,
upon request of such a Holder, information substantially equivalent in scope to
the information currently filed by the Servicer with the Commission pursuant to
the Exchange Act, plus such additional information required to be provided for
securities qualifying for resales under Rule 144A under the Act, all of which
information referred to in this paragraph shall be provided on a timely basis
to the Trustee by the Servicer.
For so long as the Class B-7, Class B-7H, Class V-1, Class
V-2, Class R or Class LR Certificates remain outstanding, neither the Depositor
nor the Trustee nor the Certificate Registrar shall take any action which would
cause the Trust Fund to fail to be subject to Section 15(d) of the Exchange
Act.
(h) Each Certificate may be printed or in typewritten or
similar form, and each Certificate shall, upon original issue, be executed 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-26 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.
(i) Prior to the Separation Date of any Class of Certificates
comprising the Units, each such Certificate shall bear the following legend on
the face thereof:
THIS CERTIFICATE IS INITIALLY ISSUED AS PART OF A UNIT, THE
UNITS CONSIST OF THE CLASS B-1, CLASS B-2, CLASS B-3, CLASS
B-4, CLASS B-5 AND CLASS B-6 COMMERCIAL MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 1997-D4, EACH ISSUED PURSUANT TO THE
POOLING AND SERVICING AGREEMENT (AS DEFINED BELOW). PRIOR TO
THE CLOSE OF BUSINESS ON THE DATE THAT THE CLASS OF
CERTIFICATES OF WHICH THIS CERTIFICATE IS A PART IS ASSIGNED
A RATING OF "BBB" OR HIGHER BY STANDARD & POOR'S RATINGS
SERVICES OR FITCH INVESTORS SERVICES, L.P. (THE "SEPARATION
DATE"), THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED
SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY AS
PART OF SUCH UNIT. FOLLOWING THE SEPARATION DATE, THIS
CERTIFICATE SHALL ONLY BE TRANSFERRED OR EXCHANGED SEPARATELY
FROM SUCH UNIT.
(j) Upon any Separation Date for any Class of Certificates,
the Trustee shall notify the Unitholders of (i) the Class of Certificates
affected, (ii) the rating or ratings assigned to such Class by S&P and/or Fitch
and the date such rating or ratings were assigned. Such notice shall also state
that, from such date, such Class shall be traded separately from the Units.
SECTION 5.02. 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; provided, however, in no event shall
the Certificate Registrar be required to maintain in the Certificate Register
the names of the individual Participants holding beneficial interests in the
Trust Fund through the Depository. 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 Depositor, Certificate Registrar,
the Servicer, Special Servicer, the Trustee, the Fiscal Agent, any Paying Agent
and any agent of any of them shall not be affected by any notice or knowledge
to the contrary. An Individual Certificate is transferable or exchangeable only
upon the surrender of such Certificate to the Certificate Registrar at the
Corporate Trust Office together with an assignment and transfer (executed by
the Holder or his duly authorized attorney), subject to the requirements of
Sections 5.01(i) and 5.02(c), (d), (e), (f), (g) and (h). Upon request of the
Trustee, the Certificate Registrar shall provide the Trustee with the names,
addresses and Percentage Interests of the Holders.
(b) Upon surrender for registration of transfer of any
Individual Certificate, subject to the requirements of Sections 5.02(c), (d),
(e), (f), (g), (h) and (i), 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 Denominations of a like aggregate
Denomination as the Individual Certificate being surrendered. Such Certificates
shall be delivered by the Certificate Registrar in accordance with Section
5.02(e). Each Certificate surrendered for registration of transfer shall be
canceled and subsequently destroyed by the Certificate Registrar. Each new
Certificate issued pursuant to this Section 5.02 shall be registered in the
name of any Person as the transferring Holder may request, subject to the
provisions of Sections 5.01(i) and 5.02(c), (d), (e), (f), (g), (h) and (i).
(c) In addition to the provisions of Sections 5.01(i) and
5.02(d), (e), (f), (g) and (h) and the rules of the Depository; the exchange,
transfer and registration of transfer of Individual Certificates shall be
subject to the following restrictions:
(i) Transfers between Holders of Individual
Certificates. With respect to the transfer and registration
of transfer of an Individual Certificate representing an
interest in the Class B-7, Class B-7H, Class V-1, Class V-2,
Class R or Class LR Certificates to a transferee that takes
delivery in the form of an Individual Certificate:
(A) The Certificate Registrar shall
register the transfer of an Individual Certificate
if the requested transfer is being made by a
transferee who has provided the Certificate
Registrar with an Investment Representation Letter
substantially in the form of Exhibit D-1 hereto (an
"Investment Representation Letter"), to the effect
that the transfer is being made to a Qualified
Institutional Buyer in accordance with Rule 144A;
(B) The Certificate Registrar shall
register the transfer of an Individual Certificate
pursuant to Regulation S after the expiration of the
Restricted Period if (1) the transferor has provided
the Certificate Registrar with a Regulation S
Transfer Certificate substantially in the form of
Exhibit G hereto (a "Regulation S Transfer
Certificate"), and (2) the transferee furnishes to
the Certificate Registrar an Investment
Representation Letter; and
(C) The Certificate Registrar shall
register the transfer of an Individual Certificate
if prior to the transfer such 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 or to an Affiliated Person in
accordance with an applicable exemption under the
Act, and (2) an opinion of counsel acceptable to the
Certificate Registrar that such transfer is in
compliance with the Act;
and, in each case, the Certificate Registrar shall register
the transfer of an Individual Certificate only if prior to
the transfer the transferee furnishes to the Certificate
Registrar 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 Act and
other applicable laws.
(ii) [Intentionally left Blank].
(iii) All Transfers. An exchange of an
Individual Certificate or Certificates for another
Individual Certificate or Certificates may be made only
in accordance with this Section 5.02.
(d) If Certificates are issued upon the transfer, exchange or
replacement of Certificates not bearing the Securities Legend, the Certificates
so issued shall not bear the Securities Legend. If Certificates are issued upon
the transfer, exchange or replacement of Certificates bearing the Securities
Legend, or if a request is made to remove the Securities Legend on a
Certificate, the Certificates so issued shall bear the Securities Legend, or
the Securities Legend shall not be removed, as the case may be, unless there is
delivered to the Certificate Registrar such satisfactory evidence, which may
include an opinion of counsel (at the expense of the party requesting the
removal of such legend) familiar with United States securities laws, as may be
reasonably required by the Certificate Registrar, that neither the Securities
Legend nor the restrictions on transfers set forth therein are required to
ensure that transfers of any Certificate comply with the provisions of Rule
144A or Rule 144 under the Act or that such Certificate is not a "restricted
security" within the meaning of Rule 144 under the Act. Upon provision of such
satisfactory evidence, the Certificate Registrar shall execute and deliver a
Certificate that does not bear the Securities Legend.
(e) Subject to the restrictions on transfer and exchange set
forth in Section 5.01(i) and in this Section 5.02, the Holder of any Individual
Certificate may transfer or exchange the same in whole or in part (with a
denomination 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. Following a proper request for transfer or exchange, the
Certificate Registrar shall, within five Business Days of such request if made
at such Corporate Trust Office or within ten Business Days if made at the
office of a transfer agent (other than the Certificate Registrar), execute and
deliver at the Corporate Trust Office or at the office of such transfer agent,
as the case may be, to the transferee (in the case of transfer) or Holder (in
the case of exchange) or send by first Class mail (at the risk of the
transferee in the case of transfer or Holder in the case of exchange) to such
address as the transferee or Holder, as applicable, may request, an Individual
Certificate or Certificates, as the case may require, for a like aggregate
Denomination and in such Denomination or Denominations as may be requested. The
presentation for transfer or exchange of any Individual Certificate shall not
be valid unless made at the Corporate Trust Office or at the office of a
transfer agent by the registered Holder in person, or by a duly authorized
attorney-in-fact. The Certificate Registrar may decline to accept any request
for an exchange or registration of transfer of any Certificate during the
period of fifteen days preceding any Distribution Date.
(f) An Individual Certificate may only be transferred to
Eligible Investors, as described herein. In the event that a Responsible
Officer of the Certificate Registrar becomes aware that such an Individual
Certificate is being held by or for the benefit of a Person who is not an
Eligible Investor, or that such holding is unlawful under the laws of a
relevant jurisdiction, then the Certificate Registrar shall have the right to
void such transfer, if permitted under applicable law, or to require the
investor to sell such Individual Certificate to an Eligible Investor within
fourteen days after notice of such determination and each Certificateholder by
its acceptance of a Certificate authorizes the Certificate Registrar to take
such action.
(g) Subject to the provisions of Section 5.01(i) and this
Section 5.02 regarding transfer and exchange, transfers of the Global
Certificates shall be limited to transfers of such Global Certificates in
whole, but not in part, to nominees of the Depository or to a successor of the
Depository or such successor's nominee.
(h) 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 5.02 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 Fund 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.
(i) Subject to Section 5.02(e), transfers of the Class B-7,
Class B-7H, Class V-1, Class V-2, Class R and Class LR Certificates may be made
only in accordance with this Section 5.02(i). The Certificate Registrar shall
register the transfer of a Class B-7, Class B-7H, Class V-1, Class V-2, Class R
or Class LR Certificate only if (x) the transferor has advised the Certificate
Registrar in writing that such Certificate is being transferred to a Qualified
Institutional Buyer, an Affiliated Person or an Institutional Accredited
Investor] and (y) prior to such transfer the transferee 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 it 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 Act and other applicable laws.
(j) Neither the Depositor, the Servicer, the Trustee nor the
Certificate Registrar is obligated to register or qualify the Class B-7, Class
B-7H, Class V-1, Class V-2, Class R or Class LR Certificates under the Act or
any other securities law or to take any action not otherwise required under
this Agreement to permit the transfer of such Certificates without registration
or qualification. Any Certificateholder desiring to effect such a transfer
shall, and does hereby agree to, indemnify the Depositor, the Servicer, the
Trustee and the Certificate Registrar, against any loss, liability or expense
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
(k) No transfer of any Class A-1E, Class ▇-▇, ▇▇▇▇▇ ▇-▇,
Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class B-1, Class B-2,
Class B-3, Class B-4, Class B-5, Class B-6, Class B-7, Class B-7H, Class V-1,
Class V-2, Class R or Class LR Certificate (each, a "Restricted Certificate")
shall be made to (i) an employee benefit plan subject to the fiduciary
responsibility provisions of ERISA, or Section 4975 of the Code, or a
governmental plan subject to any federal, state or local law ("Similar Law"),
which is to a material extent, similar to the foregoing provisions of ERISA or
the Code (collectively, a "Plan") or (ii) a collective investment fund in which
a Plan is invested, 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 Restricted
Certificate or any other Person acting on behalf of any Plan or using the
assets of any Plan to acquire any such Restricted Certificate, other than an
insurance company using the assets of its general account under circumstances
whereby such transfer to such insurance company would not constitute a
"prohibited transaction" within the meaning of Section 406 or 407 of ERISA,
Section 4975 of the Code, or a materially similar characterization under any
Similar Law. Each prospective transferee of a Restricted Certificate shall
either (i) deliver to the Depositor, the Certificate Registrar and the Trustee,
a transfer or representation letter, substantially in the form of Exhibit D-2
hereto, stating that the prospective transferee is not a Person referred to in
(i) or (ii) above or (ii) in the event the transferee is such an entity
specified in (i) or (ii) above, except in the case of a Residual Certificate,
which may not be transferred unless the transferee represents it is not such an
entity, such entity shall provide an opinion of counsel in form and substance
satisfactory to the Certificate Registrar that the purchase or holding of the
certificates by or on behalf of a plan will not result in the assets of the
trust being deemed to be "plan assets" and subject to the fiduciary
responsibility provisions of ERISA or the prohibited transaction provisions of
ERISA and the Code or Similar Law, will not constitute or result in a
prohibited transaction within the meaning of Section 406 or 407 of ERISA or
Section 4975 of the Code, and will not subject the Servicer, the Special
Servicer, the Depositor, the Trustee or the Certificate Registrar to any
obligation or liability. Neither the Trustee, the Servicer nor the Certificate
Registrar shall register a Class R or Class LR Certificate in any Person's name
unless such Person has provided the letter referred to in clause (i) of the
preceding sentence. The transferee of a beneficial interest in a Global
Certificate that is a Restricted Certificate shall be deemed to represent that
it is not a Plan or a Person acting on behalf of any Plan or using the assets
of any Plan to acquire such interest other than an insurance company using the
assets of its general account under circumstances whereby such transfer to such
insurance company would not constitute a "prohibited transaction" within the
meaning of Section 406 or 407 of ERISA, Section 4975 of the Code, or a
materially similar characterization under any Similar Law. Any transfer of a
Restricted 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.
(l) Each Person who has or acquires any Ownership Interest
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 are expressly subject to the following
provisions:
(i) Each Person acquiring or holding any Ownership Interest
shall be a Permitted Transferee and shall not acquire or hold
such Ownership Interest as agent (including 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
5.02(l) 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 may be Transferred, and no such
Transfer shall be registered in the Certificate Register,
without the express written consent of the Certificate
Registrar, and the Certificate Registrar shall not recognize
the 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, 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") of the
proposed transferee (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, 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 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 5.02(e) and (y) other than in
connection with the initial issuance of the Class R and Class
LR 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 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, or such
agent, the Certificate Registrar and the Trustee agree to furnish to the IRS
and the transferor of such Ownership Interest or such agent 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 or Class LR
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 referred to
above; provided, however, that such Persons shall in no event be excused from
furnishing such information.
SECTION 5.03. 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 and the 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 or the Authenticating Agent shall execute and authenticate and the
Certificate Registrar shall deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of the same
Class and of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section 5.03, 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 5.03 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 5.04. Appointment of Paying Agent.
The Trustee may appoint a paying agent for the purpose of
making distributions to Certificateholders pursuant to Section 4.01. The
Trustee shall cause such Paying Agent, if other than the Trustee or the
Servicer, to execute and deliver to the Servicer and the Trustee an instrument
in which such Paying Agent shall agree with the Servicer and the Trustee that
such Paying Agent will hold all sums held by it for the payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums have been paid to the Certificateholders or disposed of
as otherwise provided herein. The initial Paying Agent shall be the Trustee.
Except for LaSalle National Bank, as the initial Paying Agent, the Paying Agent
shall at all times be an entity having a long-term unsecured debt rating of at
least "AA" by Fitch, S&P and DCR and "Aa2" by ▇▇▇▇▇'▇, or shall be otherwise
acceptable to each Rating Agency.
SECTION 5.05. Access to Certificateholders'
Names and Addresses.
(a) If any Certificateholder (for purposes of this Section
5.05, an "Applicant") applies in writing to the Certificate Registrar, and such
application states that the Applicant desires to communicate with other
Certificateholders, 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, at the expense of the
Applicant.
(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 5.06. 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 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
or the 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 and the 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 or the 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 5.06 as it shall
deem necessary.
ARTICLE VI
THE DEPOSITOR, THE SERVICER AND THE SPECIAL SERVICER
SECTION 6.01. Liability of the Depositor, the Servicer
and the Special Servicer.
The Depositor, the Servicer and the Special Servicer each
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed by this Agreement.
SECTION 6.02. Merger or Consolidation of the Servicer.
Subject to the following paragraph, the Servicer will keep in
full effect its existence, rights and good standing as a corporation under the
laws of the State of Texas and will not jeopardize its ability to do business
in each jurisdiction in which 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.
The Servicer may be merged or consolidated with or into any
Person, or transfer all or substantially all of its assets to any Person, in
which case any Person resulting from any merger or consolidation to which it
shall be a party, or any Person succeeding to its business, shall be the
successor of the Servicer hereunder, and shall be deemed to have assumed all of
the liabilities of the Servicer hereunder, if each of the Rating Agencies has
confirmed in writing that such merger or consolidation or transfer of assets
and succession, in and of itself, will not cause a downgrade, qualification or
withdrawal of the then current ratings assigned by such Rating Agency to any
Class of Certificates.
SECTION 6.03. Limitation on Liability of the
Depositor, the Servicer and Others.
(a) Neither the Depositor, the Servicer, the Special Servicer
nor any of the directors, officers, employees or agents of the Depositor or the
Servicer or the Special Servicer shall be under any liability to the Trust Fund
or the Certificateholders for any action taken, or for refraining from the
taking of any action, in good faith pursuant to this Agreement, or for errors
in judgment; provided, however, that this provision shall not protect the
Depositor or the Servicer or the Special Servicer or any such Person against
any breach of warranties or representations made herein, or against any
liability which would otherwise be imposed by reason of willful misconduct, bad
faith, fraud or negligence in the performance of duties or by reason of
reckless disregard of obligations or duties hereunder. The Depositor, the
Servicer, the Special Servicer and any director, officer, employee or agent of
the Depositor, the Servicer or the Special Servicer may rely in good faith on
any document of any kind which, prima facie, is properly executed and submitted
by any appropriate Person respecting any matters arising hereunder. The
Depositor, the Servicer, the Special Servicer and any director, officer,
employee or agent of the Depositor or the Servicer or the Special Servicer
shall be indemnified and held harmless by the Trust Fund against any loss,
liability or expense (including legal fees and expenses) (i) 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
willful misconduct, bad faith, fraud or negligence (or in the case of the
Servicer, by reason of any specific liability imposed for a breach of the
Servicing Standard) in the performance of duties hereunder or by reason of
reckless disregard of obligations or duties hereunder, in each case by the
Person being indemnified or (ii) imposed by any taxing authority if such loss,
liability or expense is not specifically reimbursable pursuant to the terms of
this Agreement. Neither the Depositor nor the Servicer nor the Special Servicer
shall be under any obligation to appear in, prosecute or defend any legal
action unless such action is related to its respective duties under this
Agreement and in its opinion does not expose it to any expense or liability;
provided, however, that the Depositor or the Servicer or the Special Servicer
may in its discretion undertake any action related to its obligations hereunder
which it may deem necessary or desirable with respect to this Agreement and the
rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Depositor, the Servicer and the Special
Servicer shall be entitled to be reimbursed therefor from the Collection
Account as provided in Section 3.06 of this Agreement.
SECTION 6.04. Limitation on Resignation of the Servicer
and the Special Servicer; Termination of
the Servicer and the Special Servicer.
(a) The Servicer and the Special Servicer may assign their
respective rights and delegate their respective duties and obligations under
this Agreement in connection with the sale or transfer of a substantial portion
of their 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 and to the Depositor, (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 or a Person resulting from a
merger, consolidation or succession that is permitted under Section 6.02, (C)
shall be acceptable to each Rating Agency as confirmed by a letter from each
Rating Agency delivered to the Trustee that such assignment or delegation will
not cause a downgrade, withdrawal or qualification of the then current ratings
of the Certificates, (D) shall be rated at least "A" by DCR or otherwise
acceptable to DCR, and (E) 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
Servicer under this Agreement from and after the date of such agreement; (ii)
as confirmed by a letter from each Rating Agency delivered to the Trustee, each
Rating Agency's rating or ratings of the Regular Certificates in effect
immediately prior to such assignment, sale or transfer will not be qualified,
downgraded or withdrawn as a result of such assignment, sale or transfer; (iii)
the Servicer or the Special Servicer 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 6.04; and (iv) the rate at which the Servicer
Compensation or Special Servicer Compensation, as applicable (or any component
thereof) is calculated shall not exceed the rate then in effect. Upon
acceptance of such assignment and delegation, the purchaser or transferee shall
be the successor Servicer or Special Servicer, as applicable, hereunder.
(b) Except as provided in this Section 6.04, the Servicer and
the Special Servicer shall not resign from their respective obligations and
duties hereby imposed on them except upon determination that such duties
hereunder are no longer permissible under applicable law. Any such
determination permitting the resignation of the Servicer or the Special
Servicer, as applicable, shall be evidenced by an Opinion of Counsel (obtained
at the resigning Servicer's or Special Servicer's expense) to such effect
delivered to the Trustee.
(c) The Depositor shall be permitted to remove the Servicer
provided that (i) (x) the replacement Servicer is an acquired servicing unit
and (y) is an affiliate of the Depositor and (ii) each Rating Agency has
confirmed in writing that such removal and replacement will not result in a
downgrade, qualification or withdrawal of the then current ratings by such
Rating Agency to any class of Certificates. If the Depositor removes the
Servicer pursuant to the preceding sentence, the Depositor shall pay for all
costs and expenses that would otherwise be incurred by the Trust Fund in
connection with such removal and replacement. Without limiting the generality
of the succeeding paragraph, no such removal shall be effective unless and
until (i) the Servicer or the Special Servicer has been paid any unpaid
Servicer Compensation or Special Servicer Compensation, as applicable,
unreimbursed Advances (including Advance Interest Amounts thereon to which it
is entitled) and all other amounts to which the Servicer or the Special
Servicer is entitled hereunder to the extent such amounts accrue prior to such
effective date and (ii) with respect to a resignation by the Servicer, the
successor Servicer has deposited into the Investment Accounts from which
amounts were withdrawn to reimburse the terminated Servicer, an amount equal to
the amounts so withdrawn, to the extent such amounts would not have been
permitted to be withdrawn except pursuant to this paragraph, in which case the
successor Servicer shall, immediately upon deposit, have the same right of
reimbursement or payment as the terminated Servicer had immediately prior to
its termination without regard to the operation of this paragraph.
No resignation or removal of the Servicer or the Special
Servicer as contemplated by the preceding paragraphs shall become effective
until the Trustee or a successor Servicer or Special Servicer shall have
assumed the Servicer's or the Special Servicer's responsibilities, duties,
liabilities and obligations hereunder. If no successor Servicer or Special
Servicer can be obtained to perform such obligations for the same compensation
to which the terminated Servicer or Special Servicer would have been entitled,
additional amounts payable to such successor Servicer or Special Servicer shall
be treated as Realized Losses.
SECTION 6.05. Rights of the Depositor and the Trustee
in Respect of the Servicer and the
Special Servicer.
The Servicer and the Special Servicer shall afford the
Depositor, the Trustee and the Rating Agencies, 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, the Servicer and the Special Servicer shall
furnish to the Depositor, Servicer, Special Servicer and the Trustee its most
recent financial statements (or in the case of the Servicer or Special
Servicer, the financial statements of AMRESCO INC. if no separate financial
statements have been prepared for the Servicer) and such other information in
its possession regarding its business, affairs, property and condition,
financial or otherwise as the party requesting such information, in its
reasonable judgment, determines to be relevant to the performance of the
obligations hereunder of the Servicer and the Special Servicer. The Depositor
may, but is not obligated to, enforce the obligations of the Servicer or the
Special Servicer hereunder which are in default and may, but is not obligated
to, perform, or cause a designee to perform, any defaulted obligation of such
Person hereunder or exercise its rights hereunder, provided that the Servicer
and the Special Servicer shall not be relieved of any of its obligations
hereunder by virtue of such performance by the Depositor or its designee. In
the event the Depositor or its designee undertakes any such action it will be
reimbursed by the Trust Fund from the Collection Account as provided in Section
3.06 and Section 6.03(a) hereof to the extent not recoverable from the Servicer
or Special Servicer, as applicable. Neither the Depositor nor the Trustee and
neither the Servicer, with respect to the Special Servicer, nor the Special
Servicer, with respect to the Servicer, shall have any responsibility or
liability for any action or failure to act by the Servicer or the Special
Servicer and neither such Person is obligated to monitor or supervise the
performance of the Servicer or the Special Servicer under this Agreement or
otherwise. Neither the Servicer nor the Special Servicer shall be under any
obligation to disclose confidential or proprietary information pursuant to this
Section.
SECTION 6.06. Servicer or Special Servicer as
Owner of a Certificate.
The Servicer or an Affiliate of the Servicer or the Special
Servicer or an Affiliate of the Special Servicer may become the Holder (or with
respect to a Global Certificate, Beneficial Owner) of any Certificate with the
same rights it would have if it were not the Servicer or the Special Servicer
or an Affiliate thereof. If, at any time during which the Servicer or the
Special Servicer or an Affiliate of the Servicer or the Special Servicer is the
Holder or Beneficial Owner of any Certificate, the Servicer or the Special
Servicer proposes to take action (including for this purpose, omitting to take
action) that (i) is not expressly prohibited by the terms hereof and would not,
in the Servicer's or the Special Servicer's good faith judgment, violate the
Servicing Standard, and (ii) if taken, might nonetheless, in the Servicer's or
the Special Servicer's good faith judgment, be considered by other Persons to
violate the Servicing Standard, the Servicer or the Special Servicer may seek
the approval of the Certificateholders to such action by delivering to the
Trustee a written notice that (i) states that it is delivered pursuant to this
Section 6.06, (ii) identifies the Percentage Interest in each Class of
Certificates beneficially owned by the Servicer or the Special Servicer or an
Affiliate of the Servicer or the Special Servicer, and (iii) describes in
reasonable detail the action that the Servicer or the Special Servicer proposes
to take. The Trustee, upon receipt of such notice, shall forward it to the
Certificateholders (other than the Servicer and its Affiliates or the Special
Servicer and its Affiliates, as appropriate) together with such instructions
for response as the Trustee shall reasonably determine. If at any time
Certificateholders holding greater than 50% of the Voting Rights of all
Certificateholders (calculated without regard to the Certificates beneficially
owned by the Servicer or its Affiliates or the Special Servicer or its
Affiliates) shall have consented in writing to the proposal described in the
written notice, and if the Servicer or the Special Servicer shall act as
proposed in the written notice, such action shall be deemed to comply with the
Servicing Standard. The Trustee shall be entitled to reimbursement from the
Servicer or the Special Servicer, as applicable, of the reasonable expenses of
the Trustee incurred pursuant to this paragraph. It is not the intent of the
foregoing provision that the Servicer or the Special Servicer be permitted to
invoke the procedure set forth herein with respect to routine servicing matters
arising hereunder, except in the case of unusual circumstances.
ARTICLE VII
DEFAULT
SECTION 7.01. Events of Default.
(a) "Servicer Event of Default", wherever used herein, means
any one of the following events:
(i) any failure by the Servicer to remit to the Collection
Account or any failure by the Servicer to remit to the
Trustee for deposit into the Distribution Account, Upper-Tier
Distribution Account, Excess Interest Distribution Account,
Interest Reserve Account or Default Interest Distribution
Account, any amount required to be so deposited by the
Servicer (including a P&I Advance) pursuant to, and at the
time specified by the terms of this Agreement; or
(ii) any failure on the part of the Servicer duly to observe
or perform in any material respect any other of the covenants
or agreements or the breach of any representations or
warranties on the part of the Servicer contained in this
Agreement which continues unremedied for a period of 30 days
after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to
the Servicer by the Depositor or the Trustee, or to the
Servicer, the Depositor and the Trustee by the Holders of
Certificates evidencing Percentage Interests of at least 25%
of any Class affected thereby; or
(iii) confirmation in writing by any Rating Agency that
failure to remove the Servicer will, in and of itself, cause
a downgrade, qualification or withdrawal of the then current
ratings assigned to any Class of Certificates; 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, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force
undischarged or unstayed for a period of 60 days; or
(v) the Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to the Servicer, or of or
relating to all or substantially all of its property; or
(vi) the Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to
take advantage of any applicable insolvency or reorganization
statute, make an assignment for the benefit of its creditors,
or voluntarily suspend payment of its obligations; or
(vii) the Servicer shall fail to make any Property Advance
required to be made by the Servicer hereunder (whether or not
the Trustee or the Fiscal Agent makes such Advance), which
failure continues unremedied for a period of fifteen (15)
days after the date on which such Property Advance was first
due (or for any shorter period as may be required, if
applicable, to avoid any lapse in insurance coverage required
under any Mortgage or this Agreement with respect to any
Mortgaged Property or to avoid any foreclosure or similar
action with respect to any Mortgaged Property by reason of a
failure to pay real estate taxes and assessments and if the
Trustee makes a required Property Advance pursuant to Section
3.08(a) due to the Servicer's failure to make a required
Advance, such Event of Default shall occur immediately upon
such Advance); or
(viii) the Servicer shall no longer be an "approved" servicer
by each of the Rating Agencies for mortgage pools similar to
the Trust Funds;
then, and in each and every such case, so long as a Servicer Event of Default
shall not have been remedied, the Trustee may, and at the written direction of
the Holders of at least 25% of the aggregate Voting Rights of all Certificates
shall, terminate the Servicer.
In the event that the Servicer is also the Special Servicer
and the Servicer is terminated as provided in this Section 7.01, the Servicer
shall also be terminated as Special Servicer.
(b) "Special Servicer Event of Default", wherever used
herein, means any one of the following events:
(i) any failure by the Special Servicer to remit to the
Collection Account any amount required to be so deposited by
the Special Servicer pursuant to and in accordance with the
terms of this Agreement; or
(ii) any failure on the part of the Special Servicer duly to
observe or perform in any material respect any other of the
covenants or agreements or the breach of any representations
or warranties on the part of the Special Servicer contained
in this Agreement which continues unremedied for a period of
30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been
given to the Special Servicer by the Servicer, the Depositor
or the Trustee, or to the Special Servicer, the Servicer, the
Depositor and the Trustee by the Holders of Certificates
evidencing Percentage Interests of at least 25% of any Class
affected thereby; or
(iii) confirmation in writing by any Rating Agency that
failure to remove the Special Servicer would, in and of
itself, cause a downgrade, qualification or withdrawal of the
then current ratings assigned to any Class of Certificates;
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, marshaling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of
its affairs, shall have been entered against the Special
Servicer and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days; or
(v) the Special Servicer shall consent to the appointment of
a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshaling of assets and liabilities or
similar proceedings of or relating to the Special Servicer,
or of or relating to all or substantially all of its
property; or
(vi) the Special Servicer shall admit in writing its
inability to pay its debts generally as they become due, file
a petition to take advantage of any applicable insolvency or
reorganization statute, make an assignment for the benefit of
its creditors, or voluntarily suspend payment of its
obligations; or
(vii) the Special Servicer shall no longer be an "approved"
special servicer by each of the Rating Agencies for mortgage
pools similar to the Trust Fund;
then, and in each and every such case, so long as a Special Servicer Event of
Default shall not have been remedied, the Trustee may, and at the written
direction of the Holders of at least 25% of the aggregate Voting Rights of all
Certificates shall, terminate the Special Servicer.
(c) In the event that the Servicer or the Special Servicer is
terminated pursuant to this Section 7.01, the Trustee (the "Terminating Party")
shall, by notice in writing to the Servicer or the Special Servicer, as the
case may be (the "Terminated Party"), terminate all of its rights and
obligations under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than any rights the Terminated Party may have hereunder
as a Certificateholder and any rights or obligations that accrued prior to the
date of such termination (including the right to receive all amounts accrued or
owing to it under this Agreement, plus interest at the Advance Rate on such
amounts until received to the extent such amounts bear interest as provided in
this Agreement, with respect to periods prior to the date of such termination
and the right to the benefits of Section 6.03 notwithstanding any such
termination). On or after the receipt by the Terminated Party, of such written
notice, all of its authority and power under this Agreement, whether with
respect to the Certificates (except that the Terminated Party shall retain its
rights as a Certificateholder in the event and to the extent that it is a
Certificateholder) or the Mortgage Loans or otherwise, shall pass to and be
vested in the Terminating Party pursuant to and under this Section and, without
limitation, the Terminating Party is hereby authorized and empowered to execute
and deliver, on behalf of and at the expense of the Terminated Party, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer
and endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Servicer and the Special Servicer each agree in the event it is
terminated pursuant to this Section 7.01 to promptly (and in any event no later
than ten Business Days subsequent to such notice) provide, at its own expense,
the Terminating Party with all documents and records requested by the
Terminating Party to enable the Terminating Party to assume its functions
hereunder, and to cooperate with the Terminating Party and the successor to its
responsibilities hereunder in effecting the termination of its responsibilities
and rights hereunder, including, without limitation, the transfer to the
successor Servicer or Special Servicer or the Terminating Party, as applicable,
for administration by it of all cash amounts which shall at the time be or
should have been credited by the Servicer or the Special Servicer to the
Collection Account, and any REO Account, Lock-Box Account or Cash Collateral
Account thereafter be received with respect to the Mortgage Loans, and shall
promptly provide the Terminating Party or such successor Servicer or successor
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 Terminating Party or such successor Servicer or
Special Servicer shall reasonably request (including electromagnetic form), to
enable it to assume the Servicer's or Special Servicer's function hereunder.
All reasonable costs and expenses of the Terminating Party or the successor
Servicer or successor Special Servicer incurred in connection with transferring
the Mortgage Files to the successor Servicer or Special Servicer and amending
this Agreement to reflect such succession as successor Servicer or successor
Special Servicer pursuant to this Section 7.01 shall be paid by the predecessor
Servicer or the Special Servicer, as applicable, upon presentation of
reasonable documentation of such costs and expenses. If the predecessor
Servicer or Special Servicer (as the case may be) has not reimbursed the
Terminating Party or the successor Servicer or Special Servicer for such
expenses within 90 days after the presentation of reasonable documentation,
such expense shall be reimbursed by the Trust Fund; provided that the
Terminated Party shall not thereby be relieved of its liability for such
expenses. If and to the extent that the Terminated Party has not reimbursed
such costs and expenses, the Terminating Party shall have an affirmative
obligation to take all reasonable actions to collect such expenses on behalf of
the Trust Fund.
SECTION 7.02. Trustee to Act; Appointment of Successor.
On and after the time the Servicer or the Special Servicer
receives a notice of termination pursuant to Section 7.01, the Terminating
Party shall be its successor in all respects in its capacity as Servicer or
Special Servicer 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 Servicer or Special Servicer by
the terms and provisions hereof; provided, however, that (i) the Terminating
Party shall have no responsibilities, duties, liabilities or obligations with
respect to any act or omission of the Servicer or 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 such successor hereunder. The Trustee, as successor Servicer or successor
Special Servicer, shall be indemnified to the full extent provided the Servicer
or Special Servicer, as applicable, under this Agreement prior to the
Servicer's or the Special Servicer's termination. The appointment of a
successor Servicer or successor Special Servicer shall not affect any liability
of the predecessor Servicer or Special Servicer which may have arisen prior to
its termination as Servicer or Special Servicer. The Terminating Party shall
not be liable for any of the representations and warranties of the Servicer or
Special Servicer herein or in any related document or agreement, for any acts
or omissions of the predecessor Servicer or predecessor Special Servicer or for
any losses incurred in respect of any Permitted Investment by the Servicer
pursuant to Section 3.07 hereunder nor shall the Trustee be required to
purchase any Mortgage Loan hereunder. As compensation therefor, the Terminating
Party as successor Servicer or successor Special Servicer shall be entitled to
the Servicing Compensation or Special Servicing Compensation, as applicable,
and all funds relating to the Mortgage Loans that accrue after the date of the
Terminating Party's succession to which the Servicer or Special Servicer would
have been entitled if the Servicer or Special Servicer, as applicable, had
continued to act hereunder. In the event any Advances made by the Servicer and
the Trustee or the Fiscal Agent 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 or the Fiscal Agent (and the accrued and unpaid
interest thereon), until such Advances and interest shall have been repaid in
full. Notwithstanding the above, the Trustee may, if it shall be unwilling to
so act, or shall, if it is unable to so act, or if the Holders of Certificates
entitled to at least 25% 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 debt rating categories or if
the Rating Agencies do not provide written confirmation that the succession of
the Trustee, as Servicer or Special Servicer, as applicable, will not cause a
downgrade, qualification or withdrawal of the then current ratings assigned to
the Certificates, 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 a downgrade, qualification or
withdrawal of the then current rating or ratings assigned to any Class of
Certificates as evidenced in writing by each Rating Agency, as the successor to
the Servicer or Special Servicer, as applicable, hereunder in the assumption of
all or any part of the responsibilities, duties or liabilities of the Servicer
or Special Servicer hereunder. No appointment of a successor to the Servicer or
Special Servicer hereunder shall be effective until the assumption by such
successor of all the Servicer's or Special Servicer's responsibilities, duties
and liabilities hereunder. Pending appointment of a successor to the Servicer
(or the Special Servicer if the Special Servicer is also the Servicer)
hereunder, unless the Trustee shall be prohibited by law from so acting, the
Trustee shall act in such capacity as herein above provided. Pending the
appointment of a successor to the Special Servicer, unless the Servicer is also
the Special Servicer, the Servicer shall act in such capacity. 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, provided, further, that if no successor to the Terminated Party can
be obtained to perform the obligations of such Terminated Party hereunder,
additional amounts shall be paid to such successor and such amounts in excess
of that permitted the Terminated Party shall be treated as Realized Losses. The
Depositor, the Trustee, the Servicer or Special Servicer and such successor
shall take such action, consistent with this Agreement, as shall be necessary
to effectuate any such succession.
SECTION 7.03. Notification to Certificateholders.
(a) Upon any termination pursuant to Section 7.01 above or
appointment of a successor to the Servicer or the Special Servicer, the Trustee
shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to each Rating
Agency.
(b) Within 30 days after the occurrence of any Event of
Default of which a Responsible Officer of the Trustee has actual knowledge, the
Trustee shall transmit by mail to all Holders of Certificates and to each
Rating Agency notice of such Event of Default, unless such Event of Default
shall have been cured or waived.
SECTION 7.04. Other Remedies of Trustee.
During the continuance of any Servicer Event of Default or a
Special Servicer Event of Default, so long as such Servicer Event of Default or
Special Servicer Event of Default, if applicable, shall not have been remedied,
the Trustee, in addition to the rights specified in Section 7.01, 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 3.06. 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 Servicer
Event of Default or Special Servicer Event of Default, if applicable.
SECTION 7.05. 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 Servicer or Special Servicer
in the performance of its obligations hereunder and its consequences, except a
default in making any required deposits (including P&I Advances) to or payments
from the Collection Account or the Distribution Account or in remitting
payments as received, in each case in accordance with this Agreement. Upon any
such waiver of a past default, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been remedied for every
purpose of this Agreement. No such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.01. 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, subject
to the provisions of Sections 7.02 and 7.05 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.
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 take action as it
deems appropriate to have the instrument corrected, and if the instrument is
not corrected to the Trustee's reasonable satisfaction, the Trustee will
provide notice thereof to the Certificateholders.
(c) Neither the Trustee nor any of its officers, directors,
employees, agents or "control" persons within the meaning of the Act shall have
any liability arising out of or in connection with this Agreement, provided,
that, subject to Section 8.02, no provision of this Agreement shall be
construed to relieve the Trustee, or any such person, from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct or its own bad faith; and provided, further, that:
(i) Prior to the occurrence of an Event of Default of which a
Responsible Officer of the Trustee has actual knowledge, and
after the curing or waiver of all such Events of Default
which may have occurred, the duties and obligations of the
Trustee shall be determined solely by the express provisions
of this Agreement, the Trustee shall not be liable except for
the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied
covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the
part of the Trustee, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the
opinions expressed therein, upon any resolutions,
certificates, statements, reports, opinions, documents,
orders or other instruments furnished to the Trustee that
conform on their face to the requirements of this Agreement
without responsibility for investigating the contents
thereof;
(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 proved 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 greater than 50% of the Percentage
Interests (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 any trust or power conferred upon the
Trustee, under this Agreement;
(iv) Neither the Trustee nor any of its respective directors,
officers, employees, agents or control persons shall be
responsible for any act or omission of any Custodian, Paying
Agent or Certificate Registrar that is not an Affiliate of
the Trustee and that is selected other than by the Trustee,
performed or omitted in compliance with any custodial or
other agreement, or any act or omission of the Servicer,
Special Servicer, the Depositor or any other Person,
including, without limitation, in connection with actions
taken pursuant to this Agreement;
(v) The Trustee shall not be under any obligation to appear
in, prosecute or defend any legal action which is not
incidental to its respective duties as Trustee in accordance
with this Agreement (and, if it does, all legal expenses and
costs of such action shall be expenses and costs of the Trust
Fund), and the Trustee 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 any breach of an obligation, representation,
warranty or covenant of the Trustee contained herein; and
(vi) The Trustee shall not be charged with knowledge of any
act, failure to act or breach of any Person upon the
occurrence of which the Trustee may be required to act,
unless a Responsible Officer of the Trustee obtains actual
knowledge of such failure. The Trustee shall be deemed to
have actual knowledge of the Servicer's or the Special
Servicer's failure to provide scheduled reports, certificates
and statements when and as required to be delivered to the
Trustee pursuant to this Agreement.
None of the provisions contained in this Agreement shall
require either the Trustee, in its capacity as Trustee, or the Fiscal Agent, 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 opinion of the Trustee or the Fiscal Agent,
respectively, 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 Servicer or the Special Servicer under this Agreement, except 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 Servicer or the Special Servicer
in accordance with the terms of this Agreement. Neither the Trustee nor the
Fiscal Agent shall be required to post any surety or bond of any kind in
connection with its performance of its obligations under this Agreement and
neither the Trustee nor the Fiscal Agent shall be liable for any loss on any
investment of funds pursuant to this Agreement.
SECTION 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may request and/or rely upon and shall be
protected in acting or refraining from acting upon any
resolution, Officers' Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion,
report, notice, request, consent, order, appraisal, bond or
other paper or document reasonably believed by it to be
genuine and to have been signed or presented by the proper
party or parties and the Trustee shall have no responsibility
to ascertain or confirm the genuineness of any such party or
parties;
(ii) The Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with
such Opinion of Counsel;
(iii) (A) The Trustee shall be under no obligation to
institute, conduct or defend any litigation hereunder or in
relation hereto at the request, order or direction of any of
the Certificateholders, pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered
to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein
or thereby; (B) the right of the Trustee to perform any
discretionary act enumerated in this Agreement shall not be
construed as a duty, and the Trustee shall not be answerable
for other than its negligence or willful misconduct in the
performance of any such act; and (C) provided, that subject
to the foregoing clause (A), nothing contained herein shall
relieve the Trustee of the obligations, upon the occurrence
of an Event of Default (which has not been cured or waived)
of which a Responsible Officer of the Trustee has actual
knowledge, to exercise such of the rights and powers vested
in it by this Agreement, and to use the same degree of care
and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of
such person's own affairs;
(iv) Neither the Trustee nor any of its directors, officers,
employees, Affiliates, agents or "control" persons within the
meaning of the Act shall be personally liable for any action
taken, suffered or omitted by it in good faith and reasonably
believed by the Trustee 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 at least 25% (or such other
percentage as is specified herein) of the Percentage
Interests 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 Servicer or the Special Servicer if an Event of
Default shall have occurred and be continuing relating to the
Servicer, or the Special Servicer, respectively, and
otherwise by the Certificateholders requesting the
investigation; and
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents or attorneys but shall not be relieved
of the 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 either the Upper-Tier REMIC or the
Lower-Tier REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject either the Upper-Tier REMIC or the
Lower-Tier REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
(c) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial
or other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
The Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the repurchase of
any Mortgage Loan by the Depositor pursuant to this Agreement or the
eligibility of any Mortgage Loan for purposes of this Agreement.
SECTION 8.03. Trustee and Fiscal Agent 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 Servicer,
or the Special Servicer and the Trustee, the Fiscal Agent, the Servicer and the
Special Servicer assume no responsibility for their correctness. The Trustee,
the Fiscal Agent, the Servicer and the Special Servicer make no representations
or warranties as to the validity or sufficiency of this Agreement, of the
Certificates or any prospectus used to offer the Certificates for sale or the
validity, enforceability or sufficiency of any Mortgage Loan, or related
document. Neither the Trustee nor the Fiscal Agent shall at any time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Mortgage, 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 if the Trustee shall assume the duties of the
Servicer or the Special Servicer pursuant to Section 7.02) 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
if the Trustee shall assume the duties of the Servicer or the Special Servicer
pursuant to Section 7.02); the validity of the assignment of any Mortgage Loan
to the Trust Fund or of any intervening assignment; the completeness of any
Mortgage File; the performance or enforcement of any Mortgage Loan (other than
if the Trustee shall assume the duties of the Servicer or the Special Servicer
pursuant to Section 7.02); the compliance by the Depositor, the Servicer or the
Special Servicer with any warranty or representation made under this Agreement
or in any related document or the accuracy of any such warranty or
representation prior to the Trustee's receipt of notice or other discovery of
any non-compliance therewith or any breach thereof; any investment of monies by
or at the direction of the Servicer or any loss resulting therefrom, it being
understood that the Trustee 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 Servicer or the Special Servicer (other than if the
Trustee shall assume the duties of the Servicer or Special Servicer pursuant to
Section 7.02) or any subservicer or any Borrower; any action of the Servicer or
Special Servicer (other than if the Trustee shall assume the duties of the
Servicer or Special Servicer pursuant to Section 7.02) or any subservicer taken
in the name of the Trustee, except to the extent such action is taken at the
express written direction of the Trustee; the failure of the Servicer or the
Special Servicer or any subservicer to act or perform any duties required of it
on behalf of the Trust Fund or the Trustee hereunder; or any action by or
omission of the Trustee taken at the instruction of the Servicer or the Special
Servicer (other than if the Trustee shall assume the duties of the Servicer or
the Special Servicer pursuant to Section 7.02) 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 of its obligation to perform
its duties as specifically set forth in this Agreement. Neither the Trustee nor
the Fiscal Agent shall be accountable for the use or application by the
Depositor, the Servicer or the Special Servicer of any of the Certificates or
of the proceeds of such Certificates, or for the use or application of any
funds paid to the Depositor, the Servicer or the Special Servicer in respect of
the assignment of the Mortgage Loans or deposited in or withdrawn from the
Collection Account, Distribution Account, Upper-Tier Distribution Account, Lock
Box Account, Cash Collateral Account, Reserve Accounts, Interest Reserve
Account, Default Interest Distribution Account or Excess Interest Distribution
Account or any other account maintained by or on behalf of the Servicer or the
Special Servicer, other than any funds held by the Trustee or the Fiscal Agent,
as applicable. Neither the Trustee nor the Fiscal Agent shall have any
responsibility for 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 (unless the Trustee shall
have become the successor Servicer) or to record this Agreement. 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 8.04. Trustee and Fiscal Agent May
Own Certificates.
The Trustee, the Fiscal Agent and any agent of the Trustee
and Fiscal Agent in its individual capacity or any other capacity may become
the owner or pledgee of Certificates, and may deal with the Depositor and the
Servicer in banking transactions, with the same rights it would have if it were
not Trustee, Fiscal Agent or such agent.
SECTION 8.05. Payment of Trustee's Fees and Expenses;
Indemnification.
(a) The Trustee or any successor Trustee shall be entitled,
on each Distribution Date, to 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, which Trustee Fee shall be paid to the Trustee
prior to the distribution on such Distribution Date of amounts to the
Certificateholders. In the event that the Trustee assumes the servicing
responsibilities of the Servicer or the Special Servicer hereunder pursuant to
or otherwise arising from the resignation or removal of the Servicer or the
Special Servicer, the Trustee shall be entitled to the compensation to which
the Servicer or the Special Servicer, as the case may be, would have been
entitled.
(b) The Trustee and the Fiscal Agent shall each be paid or
reimbursed by the Trust Fund upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee or the Fiscal Agent
pursuant to and in accordance with any of the provisions of this Agreement
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all persons not regularly in its employ) to the extent such
payments are "unanticipated expenses incurred by the REMIC" within the meaning
of Treasury Regulations Section 1.860G-1(b)(iii) except any such expense,
disbursement or advance as may arise from its negligence or bad faith;
provided, however, that, subject to the last paragraph of Section 8.01, neither
the Trustee nor the Fiscal Agent shall refuse to perform any of its duties
hereunder solely as a result of the failure to be paid the Trustee Fee and the
Trustee's expenses or any sums due to the Fiscal Agent.
The Servicer and the Special Servicer covenant and agree to
pay or reimburse the Trustee for the reasonable expenses, disbursements and
advances incurred or made by the Trustee in connection with any transfer of the
servicing responsibilities of the Servicer or the Special Servicer,
respectively, hereunder, pursuant to or otherwise arising from the resignation
or removal of the Servicer, 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; provided, that in the event that the Servicer is terminated
pursuant to Section 6.04(c), expenses incurred in connection with such transfer
shall be paid by the Certificateholders effecting such termination.
(c) Each of the Paying Agent, the Certificate Registrar, the
Custodian, the Depositor, the Servicer and the Special Servicer (each, an
"Indemnifying Party") shall indemnify the Trustee and the Fiscal Agent and
their respective Affiliates and each of the directors, officers, employees and
agents of the Trustee, the Fiscal Agent and their respective Affiliates (each,
an "Indemnified Party"), and hold each of them harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments, and any other costs, fees
and expenses that the Indemnified Party may sustain in connection with this
Agreement (including, without limitation, reasonable fees and disbursements of
counsel incurred by the Indemnified Party in any action or proceeding between
the Indemnifying Party and the Indemnified Party or between the Indemnified
Party and any third party or otherwise) related to each such Indemnifying
Party's respective willful misconduct, bad faith, fraud and/or negligence in
the performance of each of its respective duties hereunder or by reason of
reckless disregard of its respective obligations and duties hereunder
(including in the case of the Servicer, any agent of the Servicer or
subservicer).
(d) The Trust Fund shall indemnify each Indemnified Party
from, and hold it harmless against, any and all losses, liabilities, damages,
claims or unanticipated expenses (including, without limitation, reasonable
fees and disbursements of counsel incurred by the Indemnified Party in any
action or proceeding between the Indemnifying Party and the Indemnified Party
or between the Indemnified Party and any third party or otherwise) 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)(iii), other than (i)
those resulting from the negligence, fraud, bad faith or willful misconduct of
the Indemnified Party and (ii) those as to which such Indemnified Party is
entitled to indemnification pursuant to Section 8.05(c). The term
"unanticipated expenses incurred by a REMIC" shall include any fees, expenses
and disbursement 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 2.03, Section 3.10, the
third paragraph of Section 3.11, Section 4.05 and Section 7.01. The right of
reimbursement of the Indemnified Parties under this Section 8.05(d) shall be
senior to the rights of all Certificateholders.
(e) Notwithstanding anything herein to the contrary, this
Section 8.05 shall survive the termination or maturity of this Agreement or the
resignation or removal of the Trustee or the Fiscal Agent, as the case may be,
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 Servicer, the Special Servicer, the
Paying Agent, the Certificate Registrar or the Custodian.
(f) This Section 8.05 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 8.06. 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 long-term debt of at least "BBB" by Fitch and DCR, S&P and "Baa2" by
▇▇▇▇▇'▇ (or at any time when there is no Fiscal Agent appointed and acting
hereunder or any such Fiscal Agent so appointed has a rating on its long-term
unsecured debt that is lower than "AA" by Fitch and S&P and "Aa2" by ▇▇▇▇▇'▇
(without regard to any plus or minus or numeric qualifier) the rating on the
unsecured long term debt of the Trustee must be at least "AA" by Fitch and DCR,
S&P and "Aa2" by ▇▇▇▇▇'▇, or meet different standards provided that each Rating
Agency shall have confirmed in writing that such different standards would not,
in and of itself, result in a downgrade, qualification or withdrawal of the
then current ratings assigned to the Certificates) and subject to supervision
or examination by federal or state authority and shall not be an Affiliate of
the Servicer (except during any period when the Trustee has assumed the duties
of the Servicer pursuant to Section 7.02); provided that, notwithstanding that
the long-term unsecured debt of LaSalle National Bank and ABN AMRO Bank N.V.
are not rated by DCR and Fitch, LaSalle National Bank shall not fail to qualify
as Trustee solely by virtue of the lack of such ratings until such time as
Fitch or DCR shall notify the Trustee, the Servicer and the Special Servicer in
writing that LaSalle National Bank is no longer exempt from the foregoing
rating requirements imposed by this sentence. 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 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 either to (i) resign immediately in the manner and with
the effect specified in Section 8.07, (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 8.07.
SECTION 8.07. 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
Servicer and each Rating Agency. Upon such notice of resignation, the Fiscal
Agent shall also be deemed to have been removed and, accordingly, the Servicer
shall promptly appoint a successor Trustee, the appointment of which would not,
as evidenced in writing, in and of itself, result in a downgrade, qualification
or withdrawal of the then current ratings assigned to the Certificates, and a
successor Fiscal Agent (if necessary to satisfy the requirements contained in
Section 8.06), the appointment of which, if the successor Trustee is not rated
by each Rating Agency in one of its two highest long-term debt rating
categories, would not, as evidenced in writing, in and of itself, result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
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. If no successor
Trustee and successor 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 the 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 8.06 and shall fail to resign after
written request therefor by the Depositor or Servicer, or if at any time the
Trustee shall become incapable of acting, or shall be adjudged bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, or upon a confirmation in writing by any Rating Agency that not
terminating the Trustee, or the Fiscal Agent, as applicable, would, in and of
itself, cause the then-current rating assigned to any class of Certificates to
be qualified, withdrawn or downgraded, then the Depositor or the Servicer may
remove the Trustee and the Fiscal Agent and the Servicer 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 the successor Fiscal Agent.
The Holders of Certificates entitled to at least 50% 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 by written
instrument or instruments, in seven 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 Servicer, one complete
set to the Trustee so removed, one complete set to the Fiscal Agent deemed
removed, one complete set to the successor Trustee so appointed and one
complete set to the successor Fiscal Agent so appointed.
In the event of removal of the Trustee the Fiscal Agent shall
be deemed to have been removed.
In the event that the Trustee or Fiscal Agent is terminated
or removed pursuant to this Section 8.07, all of its rights and obligations
under this Agreement and in and to the Mortgage Loans shall be terminated,
other than any rights or obligations that accrued prior to the date of such
termination or removal (including the right to receive all fees, expenses and
other amounts accrued or owing to it under this Agreement, plus interest at the
Advance Rate on all 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 or removal).
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 debt rating categories,
a successor Fiscal Agent pursuant to any of the provisions of this Section 8.07
shall not become effective until acceptance of appointment by the successor
Trustee and, if necessary, successor Fiscal Agent as provided in Section 8.08.
SECTION 8.08. Successor Trustee and Fiscal Agent.
(a) Any successor Trustee and any successor Fiscal Agent
appointed as provided in Section 8.07 shall execute, acknowledge and deliver to
the Depositor, the Servicer and to the predecessor Trustee and predecessor
Fiscal Agent, as the case may be, instruments accepting their appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
and predecessor Fiscal Agent shall become effective and such successor Trustee
and successor Fiscal Agent, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as Trustee
or Fiscal Agent herein, provided that the appointment of such successor Trustee
and successor Fiscal Agent shall not, as evidenced in writing, result in a
downgrade, qualification or withdrawal of the then current ratings assigned to
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 and the predecessor Trustee 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
all such rights, powers, duties and obligations. No successor Trustee shall
accept appointment as provided in this Section 8.08 unless at the time of such
acceptance such successor Trustee shall be eligible under the provisions of
Section 8.06.
Upon acceptance of appointment by a successor Trustee as
provided in this Section 8.08, the Depositor shall mail notice of the
succession of such Trustee hereunder to all Holders of Certificates at their
addresses as shown in the Certificate Register. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
Trustee, the successor Trustee shall cause such notice to be mailed at the
expense of the Depositor.
(b) Any successor Trustee or Fiscal Agent appointed pursuant
to this Agreement shall satisfy the eligibility requirements set forth in
Section 8.06 hereof.
SECTION 8.09. 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 8.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
SECTION 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 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, obligations and liabilities
hereunder. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor Trustee under Section 8.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 8.08
hereof.
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 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, or if the separate trustee or
co-trustee is an employee of the Trustee, the Trustee acting alone may accept
the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Every such instrument shall be filed with
the Trustee. Each separate trustee and co-trustee, upon its acceptance of the
trusts conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the
conduct of, affecting the liability of, or affording protection to, the
Trustee. In no event shall any such separate trustee or co-trustee be entitled
to any provision relating to the conduct of affecting the liability of or
affording protection to such separate trustee or co-trustee that imposes a
standard of conduct less stringent than that imposed by 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 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. 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
4.06.
(b) The Fiscal Agent undertakes to perform such duties and
only such duties as are specifically set forth in Sections 3.24 and 4.06.
(c) No provision of this Agreement shall be construed to
relieve the Fiscal Agent from liability for its own negligent failure to act or
its own willful misfeasance or for a breach of a representation or warranty
contained herein; 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 4.06, 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 the
Depositor, the Servicer, the Special Servicer or the Trustee and which on their
face do not contradict the requirements of this Agreement, and (ii) the
provisions of clause (ii) of Section 8.01(c) shall apply to the Fiscal Agent.
(d) Except as otherwise provided in Section 8.11(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 8.02(a).
ARTICLE IX
TERMINATION
SECTION 9.01. Termination.
(a) The respective obligations and responsibilities of the
Servicer, the Special Servicer, the Depositor, the Trustee and the Fiscal Agent
created hereby with respect to the Certificates (other than the obligation to
make certain payments and to send certain notices to Certificateholders as
hereinafter set forth) shall terminate immediately following the occurrence of
the last action required to be taken by the Trustee pursuant to this Article IX
on the Termination Date; provided, however, that in no event shall the trust
created hereby continue beyond the expiration of twenty-one years from the
death of the last 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, the Upper-Tier REMIC and the Lower-Tier
REMIC 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, the Upper-Tier REMIC and the Lower-Tier REMIC 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
9.01(b), the Notice of Termination given pursuant to Section 9.01(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 Servicer in the final
federal income tax returns of the Upper-Tier REMIC and the Lower-Tier REMIC.
(c) Any holder of a Class LR Certificate representing greater
than a 50% Percentage Interest in such Class may effect an early termination of
the Trust Fund, upon not less than 30 days' prior Notice of Termination given
to the Trustee and Servicer any time on or after the Early Termination Notice
Date specifying the Anticipated Termination Date, by purchasing on such date
all, but not less than all, of the Mortgage Loans then included in the Trust
Fund, and all property acquired in respect of any Mortgage Loan, at a purchase
price, payable in cash, equal to not less than the greater of:
(i) the sum of
(A) 100% of the unpaid principal balance of each
Mortgage Loan included in the Trust Fund as of the
last day of the month preceding such Distribution
Date (less any P&I Advances previously made on
account of principal);
(B) the fair market value of all other property included
in the Trust Fund as of the last day of the month
preceding such Distribution Date, as determined by
an Independent appraiser acceptable to the 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 (plus the Excess Rate, to the
extent applicable), to the last day of the month
preceding such Distribution Date (less any P&I
Advances previously made on account of interest);
(D) the aggregate amount of unreimbursed Advances, with
interest thereon at the Advance Rate, and unpaid
Servicing Compensation, Special Servicing
Compensation, Trustee Fees and Trust Fund expenses;
and
(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 appraiser acceptable to
the 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 Mortgage Rate.
The Servicer or the Depositor may also effect such
termination as provided above if it first notifies each Holder of a Class LR
Certificate through the Trustee of its intention to do so in writing at least
30 days prior to the Early Termination Notice Date and no Class ▇▇ ▇▇▇▇▇▇
terminates the Trust Fund as described above within such 30-day period. All
costs and expenses incurred by any and all parties 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 9.01(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).
Anything in this Section 9.01 to the contrary
notwithstanding, the holders of the Class V-1 Certificates shall receive that
portion of the proceeds of a sale of the assets of the Trust Fund allocable to
the Net Default Interest, as their interests may appear, and the holders of the
Class V-2 Certificates shall receive that portion of the proceeds of a sale of
the assets of the Trust Fund allocable to Excess Interest, as their interests
may appear.
(d) If the Trust Fund has not been previously terminated
pursuant to subsection (c) of this Section 9.01, the Trustee shall determine as
soon as practicable the Distribution Date on which the Trustee reasonably
anticipates, based on information with respect to the Mortgage Loans previously
provided to it, that the final distribution will be made (i) to the Holders of
outstanding Regular Certificates, and to the Trustee in respect of the
Lower-Tier Regular Interests notwithstanding that such distribution may be
insufficient to distribute in full the Certificate Balance of each Certificate
or Lower-Tier Regular Interest, together with amounts required to be
distributed on such Distribution Date pursuant to Section 4.01(a), (b), (c) or
(d) or (ii) if no such Classes of Certificates are then outstanding, to the
Holders of the Class LR Certificates of any amount remaining in the Collection
Account or the Distribution Account and to the Holders of the Class R
Certificates of any amount remaining in the Upper-Tier Distribution Account, in
either case, following the later to occur of (A) the receipt or collection of
the last payment due on any Mortgage Loan included in the Trust Fund or (B) the
liquidation or disposition pursuant to Section 3.18 of the last asset held by
the Trust Fund.
(e) Notice of any termination of the Trust Fund pursuant to
this Section 9.01 shall be mailed by the Trustee to affected Certificateholders
with a copy to the Servicer and each Rating Agency at their addresses shown in
the Certificate Registrar as soon as practicable after the Trustee shall have
received, given or been deemed to have received a Notice of Termination but in
any event not more than thirty days, and not less than ten days, prior to the
Anticipated Termination Date. The notice mailed by the Trustee to affected
Certificateholders shall:
(i) specify the Anticipated Termination Date on which the
final distribution is anticipated to be made to Holders of
Certificates of the Classes specified therein;
(ii) specify the amount of any such final distribution, if
known; and
(iii) 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 9.01 shall not have been surrendered for cancellation within
six months after the time specified in such notice, the Trustee shall mail a
second notice to the remaining Certificateholders, at their last addresses
shown in the Certificate Register, to surrender their Certificates for
cancellation in order to receive, from such funds held, the final distribution
with respect thereto. If within one year after the second notice any
Certificate shall not have been surrendered for cancellation, the Trustee may,
directly or through an agent, take appropriate steps to contact the remaining
Certificateholders concerning surrender of their Certificates. The costs and
expenses of maintaining such funds and of contacting Certificateholders shall
be paid out of the assets which remain held. If within two years after the
second notice any Certificates shall not have been surrendered for
cancellation, the Paying Agent shall pay to the Trustee all amounts
distributable to the Holders thereof, and the Trustee shall thereafter hold
such amounts for the benefit of such Holders until the earlier of (i) its
termination as Trustee hereunder and the transfer of such amounts to a
successor Trustee and (ii) the termination of the Trust Fund and distribution
of such amounts to the Class LR Certificateholders. 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 9.01. Any such amounts transferred to
the Trustee may be invested in Permitted Investments and all income and gain
realized from investment of such funds shall be for the benefit of the Trustee.
(g) The Holder of a 100% Percentage Interest in the Class LR
Certificates may purchase any Mortgage Loan on its Anticipated Repayment Date,
if any, at a price equal to the sum of the following:
(i) 100% of the outstanding principal balance of such
Mortgage Loan on such Anticipated Repayment Date (less any
P&I Advances previously made on account of principal);
(ii) all unpaid interest accrued on such principal balance of
such Mortgage Loan at the Mortgage Rate thereof, to the last
day of the Interest Accrual Period preceding such Anticipated
Repayment Date (less any P&I Advances previously made on
account of interest);
(iii) the aggregate amount of all unreimbursed Advances with
respect to such Mortgage Loan, with interest thereon at the
Advance Rate, and unpaid Special Servicing Compensation,
Servicing Compensation, Trustee Fees and Trust Fund expenses;
and
(iv) the amount of any Liquidation Expenses incurred by the
Trust Fund in connection with such purchase;
provided, that, such Holder, at its expense, has provided the Trustee with an
opinion of counsel to the effect that such purchase would not (x) result in a
gain which would be subject to the tax on net income derived from "prohibited
transactions" imposed by Code Section 860F(a)(1) or otherwise result in the
imposition of any other tax on the Lower-Tier REMIC or the Upper-Tier REMIC
under the REMIC Provisions or (y) cause either the Upper-Tier REMIC or the
Lower-Tier REMIC to fail to qualify as a REMIC; such opinion relying upon
appraisals of the fair market value (for the purposes of Section 860F(c)(1) of
the Code) of such Mortgage Loan by at least three Independent appraisers.
Notwithstanding the foregoing, such Mortgage Loan may not be
purchased if the fair market value of the Mortgage Loan is greater than 100% of
the outstanding principal balance of such Mortgage Loan.
The Holder of 100% of the most subordinate Class of
Certificates (provided that the Class 7H Certificates shall not be considered a
Class for such purposes) may purchase any Mortgage Loan on or after its
Anticipated Repayment Date under the same terms and conditions hereunder as in
the case of a purchase by the Holder of the Class LR Certificates if the Holder
of the Class LR Certificates either (i) notifies the Holder of the most
subordinate Class of Certificates that it will not purchase such Mortgage Loan
or (ii) does not, in fact, purchase such Mortgage Loan on its Anticipated
Repayment Date.
The proceeds of any such purchase hereunder shall be
deposited in the Collection Account and disbursed as provided herein.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
SECTION 10.02. 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 any Mortgage Loan, unless 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 Percentage Interests of at least 25% of 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 60 days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such action, suit
or proceeding. 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.
SECTION 10.03. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.04. Notices.
All demands, notices and communications hereunder shall be in
writing, shall be deemed to have been given upon receipt (except that notices
to Holders of Class B-7, Class B-7H, Class V-1, Class V-2, Class R and Class LR
Certificates or Holders of any Class of Certificates no longer held through a
Depository and instead held in registered, definitive form shall be deemed to
have been given upon being sent by first class mail, postage prepaid) as
follows:
If to the Trustee, to:
LaSalle National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Asset-Backed Securities
Trust Services, Nomura 1997-D4
If to the Fiscal Agent, to:
ABN AMRO Bank, N.V.
c/o LaSalle National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Asset-Backed Securities
Trust Services, Nomura 1997-D4
If to the Depositor, to:
Asset Securitization Corporation
2 World Financial ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇
With copies to:
Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
If to the Servicer or Special Servicer, to:
AMRESCO Management, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Counsel
With copies to:
AMRESCO, INC.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
and
Weil, Gotshal & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
If to the Mortgage Loan Seller, to:
Nomura Asset Capital Corporation
2 World Financial ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇
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 10.05. 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 10.06. Notice to the Depositor and Each
Rating Agency.
(a) The Trustee shall use its best efforts to promptly
provide 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 Servicer, Special Servicer, the Trustee or Fiscal
Agent;
(iv) the repurchase of Mortgage Loans pursuant to Section
2.03(d) or 2.03(e);
(v) the final payment to any Class of Certificateholders;
(vi) any change in the location of the Collection Account or
the Distribution Account;
(vii) any event that would result in the voluntary or
involuntary termination of any insurance of the accounts of
the Servicer;
(viii) each report to Certificateholders described in Section
4.02 and Section 3.22;
(ix) any change in the lien priority of a Mortgage Loan;
(x) any new lease of an anchor or a termination of an anchor
lease at a retail Mortgaged Property;
(xi) any termination of licensing certification at a
Mortgaged Property securing a Senior Housing/Healthcare Loan;
(xii) any material damage to a Mortgaged Property; and
(xiii) any amendment, modification, consent or waiver to or
of any provision of a Mortgage Loan.
(b) The Servicer shall promptly furnish to each Rating Agency
copies of the following:
(i) each of its annual statements as to compliance described
in Section 3.14;
(ii) each of its annual independent public accountants'
servicing reports described in Section 3.15; and
(iii) a copy of each rent roll and each operating and other
financial statement and occupancy reports, to the extent such
information is required to be delivered under a Mortgage
Loan, in each case to the extent collected pursuant to
Section 3.03. However, with respect to DCR, the Servicer
shall provide only the annual statements or reports.
(c) The Servicer shall furnish each Rating Agency and the
Depositor with such information with respect to the Trust Fund, a Mortgaged
Property, a Borrower and a non-performing or Specially Serviced Mortgage Loan
as such Rating Agency or the Depositor shall reasonably request and which the
Servicer can reasonably obtain. The Rating Agencies shall not be charged any
fee or expense in connection therewith. The Servicer shall send copies to the
Depositor of any information provided to any Rating Agency.
(d) Notices to each Rating Agency shall be
addressed as follows:
Duff & ▇▇▇▇▇▇ Credit Rating Co.
▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Structured Finance -
Commercial Real Estate Monitoring
Fitch Investors Service, L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Mortgage Surveillance
▇▇▇▇▇'▇ Investor Services, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Managing Director
Commercial Mortgage-Backed Securities
Standard & Poor's Rating Services
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Mortgage Surveillance
or in each case to such other address as either Rating Agency shall specify by
written notice to the parties hereto.
SECTION 10.07. Amendment.
This Agreement or any Custodial Agreement may be amended from
time to time by the Depositor, the Servicer, the Special Servicer, the Trustee
and the Fiscal Agent, without the consent of any of the Certificateholders, (i)
to cure any ambiguity, (ii) to correct or supplement any provisions herein or
therein that may be defective or 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, (iv) to amend or supplement any
provisions herein or therein that shall not adversely affect in any material
respect the interests of any Certificateholder not consenting thereto, as
evidenced in writing by an Opinion of Counsel, at the expense of the party
requesting such amendment or confirmation in writing from each Rating Agency
that such amendment or supplement will not result in a qualification,
withdrawal or downgrading of the then-current ratings assigned to the
Certificates, or (v) 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 a downgrade,
qualification or withdrawal of the then current rating or ratings then assigned
to any outstanding Class of Certificates, as confirmed by each Rating Agency in
writing.
This Agreement or any Custodial Agreement may also be amended
from time to time by the Depositor, the Servicer, the Special Servicer, the
Trustee and the Fiscal Agent with the consent of the Holders of each of the
Classes of Regular Certificates representing not less than 66-2/3% of the
Percentage Interests of each Class 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 all the holders of all
Certificates representing all Percentage Interests
of the Class or Classes affected thereby;
(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
representing all of the Percentage Interest of the
Class or Classes affected hereby;
(iii) alter the Servicing Standard or the obligations of
the Servicer, the Special 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 Percentage
Interests of the Class or Classes affected thereby;
or
(iv) amend any section hereof which relates to the
amendment of this Agreement without the consent of
all the holders of all Certificates representing all
Percentage Interests of the Class or Classes
affected thereby.
Further, the Depositor, the Servicer, the Special Servicer,
the Trustee and the Fiscal Agent, at any time and from time to time, without
the consent of the Certificateholders, may amend this Agreement to modify,
eliminate or add to any of its provisions to such extent as shall be necessary
to maintain the qualification of the Trust REMIC as two separate REMICs, or to
prevent the imposition of any additional material state or local taxes, at all
times that any Certificates are outstanding; provided, however, that such
action, as evidenced by an Opinion of Counsel (obtained at the expense of the
Trust Fund), is necessary or helpful to maintain such qualification or to
prevent the imposition of any such taxes, and would not adversely affect in any
material respect the interest of any Certificateholder.
In the event that neither the Depositor nor any successor
thereto, if any, is in existence, any amendment under this Section 10.07 shall
be effective with the consent of the Trustee, the Fiscal Agent, and the
Servicer, in writing, and to the extent required by this Section, the
Certificateholders. Promptly after the execution of any amendment, the Servicer
shall forward to the Trustee and the Trustee shall furnish written notification
of the substance of such amendment to each Certificateholder and each Rating
Agency.
It shall not be necessary for the consent of
Certificateholders under this Section 10.07 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, if
requested by the Servicer and/or the Trustee, the 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 either Rating
Agency to maintain the rating issued by it or requested by the Trustee for any
purpose described in clause (i) or (ii) of the first sentence of this Section,
then at the expense of the Trust Fund), to the effect that such amendment will
not cause either the Upper-Tier REMIC or Lower-Tier REMIC to fail to qualify as
a REMIC at any time that any Certificates are outstanding or cause a tax to be
imposed on the Trust Fund under the REMIC Provisions (other than a tax at the
highest marginal corporate tax rate on net income from foreclosure property).
Prior to the execution of any amendment to this Agreement or
any Custodial Agreement, the Trustee, the Fiscal Agent, the Special Servicer
and the Servicer may request and shall be entitled to rely conclusively upon an
Opinion of Counsel, at the expense of the party requesting such amendment (or,
if such amendment is required by either Rating Agency to maintain the rating
issued by it or requested by the Trustee for any purpose described in clause
(i), (ii), (iii) or (v) (which do not modify or otherwise relate solely to the
obligations, duties or rights of the Trustee) of the first sentence of this
Section, then at the expense of the Trust Fund) stating that the execution of
such amendment is authorized or permitted by this Agreement. The Trustee and
the Fiscal Agent may, but shall not be obligated to, enter into any such
amendment which affects the Trustee's or the Fiscal Agent's own rights, duties
or immunities under this Agreement.
SECTION 10.08. 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, the Distribution Account, Upper-Tier Account, Default
Interest Distribution Account and Excess Interest Distribution Account, whether
in the form of cash, instruments, securities or other property; (c) the
possession by the Trustee (or the Custodian on its behalf) of Notes and such
other items of property as constitute instruments, money, negotiable documents
or chattel paper shall be deemed to be "possession by the secured party" for
purposes of perfecting the security interest pursuant to Section 9-305 of the
Delaware and Illinois Uniform Commercial Code; 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 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.
SECTION 10.09. ▇▇▇▇▇▇ Act.
Any provisions required to be contained in this Agreement by
Section 126 and/or Section 130-k or Article 4-A of the New York Real Property
Law are hereby incorporated herein, and such provisions shall be in addition to
those conferred or imposed by this Agreement; provided, however, that to the
extent that such Section 126 and/or Section 130-k shall not have any effect,
and if said Section 126 and/or Section 130-k should at any time be repealed or
cease to apply to this Agreement or be construed by judicial decision to be
inapplicable, said Section 126 and/or Section 130-k shall cease to have any
further effect upon the provisions of this Agreement. In case of a conflict
between the provisions of this Agreement and any mandatory provisions of
Article 4-A of the New York Real Property Law, such mandatory provisions of
said Article 4-A shall prevail, provided that if said Article 4-A shall not
apply to this Agreement, should at any time be repealed, or cease to apply to
this Agreement or be construed by judicial decision to be inapplicable, such
mandatory provisions of such Article 4-A shall cease to have any further effect
upon the provisions of this Agreement.
SECTION 10.10. No Intended Third-Party Beneficiaries.
No Person other than a party to this Agreement and any
Certificateholder shall have any rights with respect to the enforcement of any
of the rights or obligations hereunder. Without limiting the foregoing, the
parties to this Agreement specifically state that no Borrower, property manager
or other party to a Mortgage Loan is an intended third-party beneficiary of
this Agreement.
IN WITNESS WHEREOF, the Depositor, the 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 all as of the day
and year first above written.
Signed and acknowledged ASSET SECURITIZATION
in the presence of: CORPORATION,
_____________________________ as Depositor
Print Name:
By:_____________________________
_____________________________ Name:
Print Name: Title:
Signed and acknowledged AMRESCO MANAGEMENT, INC.
in the presence of as Servicer and Special Servicer
_____________________________ By:_____________________________
Print Name: Name:
Title:
_____________________________
Print Name:
Signed and acknowledged LASALLE NATIONAL BANK,
in the presence of: as Trustee, Custodian, Certificate
Registrar and Paying Agent
_____________________________
Print Name:
By:_____________________________
_____________________________ Name:
Print Name: Title:
ABN AMRO BANK N.V., ABN AMRO BANK N.V.,
as Fiscal Agent as Fiscal Agent
By:__________________________ By:__________________________
Name: Name:
Title: Title:
Acknowledged by
Nomura Securities
International,
Inc., solely with
respect to Section
3.07 and Section
5.02(l)
By:__________________________
Name:
Title:
STATE OF NEW YORK )
) ss:
COUNTY OF NEW YORK)
On this ____ day of March, 1997, before me, the undersigned,
a Notary Public in and for the State of New York, duly commissioned and sworn,
personally appeared ___________, to me known who, by me duly sworn, did depose
and acknowledge before me and say that s/he resides at Two World Financial
Center, New York, New York; that s/he is the _____________ of ASSET
SECURITIZATION CORPORATION, a Delaware corporation, the corporation described
in and that executed the foregoing instrument; and that s/he signed her/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 New York.
My Commission expires:
(stamp)
(seal)
This instrument prepared by:
---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
STATE OF __________ )
) ss:
COUNTY OF ________ )
On this ____ day of March, 1997, 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 s/he resides at
is the ____________________ of AMRESCO Management, Inc., the corporation
described in and that executed the foregoing instrument; and that he/she signed
his/her 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: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
STATE OF )
) ss:
COUNTY OF )
On this ____ day of March, 1997, 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 a _________ of LASALLE NATIONAL BANK, a
nationally chartered bank, the corporation described in and that executed 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: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
STATE OF )
) ss:
COUNTY OF )
On this ____ day of __________, 1997, 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 s/he resides at
_____________, _____________, ______; that s/he is a _____________ of ABN AMRO
BANK N.V., a nationally chartered bank, the corporation described in and that
executed the foregoing instrument; and that s/he signed her/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: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇