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ICCMAC Commercial Trust [______]
Issuer,
and
--------------------,
Master Servicer and Special Servicer
and
--------------------,
Trustee
and
--------------------------------
SERVICING AGREEMENT
Dated as of _________, __, 199__
--------------------------------
$----------
Colalteralized Mortgage Bonds
Series 199__-____
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms................................................
SECTION 1.02 Certain Terms................................................
SECTION 1.03 Determination of LIBOR.......................................
SECTION 1.04 General Interpretive Principles..............................
ARTICLE II
CERTAIN MATTERS REGARDING THE MORTGAGE LOANS;................................
SECTION 2.01 Delivery of Mortgage Loan Files and Related Documents........
SECTION 2.02 Document Defects and Breaches; Repurchase....................
SECTION 2.03 Representations and Warranties of the Issuer,
the Master Servicer, and the Special
Servicer; Assignment of Rights..........................
SECTION 2.04 Repurchase of Mortgage Loans for Breaches of
Representation and Warranty.............................
ARTICLE III
GENERAL PROVISIONS APPLICABLE TO SERVICERS
SECTION 3.01 Contract for Servicing.......................................
SECTION 3.02 Notices to Mortgagors........................................
SECTION 3.03 Subservicing................................................
SECTION 3.04 Record Title to Mortgage Loans, Etc..........................
SECTION 3.05 Release of Documents and Instruments of Satisfaction.........
SECTION 3.06 Access to Certain Documentation Regarding the Mortgage
Loans and This Agreement................................
SECTION 3.07 Annual Statement As to Compliance............................
SECTION 3.08 Annual Independent Public Accountants' Servicing Report......
SECTION 3.09 Merger or Consolidation of Any Servicer......................
SECTION 3.10 Limitation on Liability of the Servicers and Others..........
SECTION 3.11 Resignation of Servicers.....................................
SECTION 3.12 Maintenance of Errors and Omissions and Fidelity Coverage....
SECTION 3.13 Indemnity ...................................................
SECTION 3.14 Information Systems..........................................
ARTICLE IV
OBLIGATIONS OF THE MASTER SERVICER
SECTION 4.01 The Master Servicer..........................................
SECTION 4.02 Collection Account; Collection of Certain Mortgage
Loan Payments...........................................
SECTION 4.03 Permitted Withdrawals from the Collection Account............
SECTION 4.04 Remittances to the Trustee...................................
SECTION 4.05 Master Servicer Advances.....................................
SECTION 4.06 Maintenance of Insurance.....................................
SECTION 4.07 Enforcement of "Due-on-Sale" Clauses; Assumption Agreements..
SECTION 4.08 Property Inspections.........................................
SECTION 4.09 Reports of Master Servicer...................................
SECTION 4.10 Confirmation of Balloon Payment..............................
SECTION 4.11 Master Servicer Compensation.................................
SECTION 4.12 Adjustment of Servicer's Compensation........................
SECTION 4.13 Implementation of Operations and Maintenance Plans...........
ARTICLE V
[RESERVED]
ARTICLE VI
OBLIGATIONS OF THE SPECIAL SERVICER
SECTION 6.01 The Special Servicer.........................................
SECTION 6.02 Transfer to Special Servicing................................
SECTION 6.03 Servicing of Specially Serviced Mortgage Loans...............
SECTION 6.04 Title to REO Property; Management of REO Property............
SECTION 6.05 Sale of REO Property and Specially Serviced Mortgage Loans...
SECTION 6.06 REO Account; Collection of REO Proceeds......................
SECTION 6.07 Remittances to Servicer......................................
SECTION 6.08 Specially Serviced Mortgage Loan Status Reports
and Other Reports.......................................
SECTION 6.09 Environmental Considerations.................................
SECTION 6.10 Restoration of Specially Serviced Mortgage Loans.............
SECTION 6.11 Removal of Special Servicer..................................
SECTION 6.12 Special Servicer Compensation................................
SECTION 6.13 Collateral Value Adjustments.................................
ARTICLE VII
OBLIGATIONS OF THE INDENTURE TRUSTEE; REPORTS
SECTION 7.01 Statements to Bondholders....................................
SECTION 7.02 Distribution of Reports to the Trustee
and the Issuer; Advances................................
SECTION 7.03 Allocations of Realized Losses and
Collateral Value Adjustments............................
ARTICLE VIII
THE ISSUER
SECTION 8.01 Liability of the Issuer......................................
SECTION 8.02 Merger, Consolidation or Conversion of the Issuer............
SECTION 8.03 Limitation on Liability of the Issuer and Others.............
ARTICLE IX
DEFAULT
SECTION 9.01 Events of Default............................................
SECTION 9.02 Trustee to Act; Appointment of Successor.....................
SECTION 9.03 Notification to Bondholders..................................
SECTION 9.04 Waiver of Events of Default..................................
SECTION 9.05 Additional Remedies of Trustee Upon Event of Default.........
ARTICLE X
[RESERVED]
ARTICLE XI
MONITORING BONDHOLDER; DIRECTING BONDHOLDER
SECTION 11.01 Monitoring Bondholders and Directing Bondholder..............
SECTION 11.02 Powers of Attorney...........................................
ARTICLE XII
TERMINATION
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01 Amendment ...................................................
SECTION 13.02 Recordation of Agreement; Counterparts.......................
SECTION 13.04 Governing Law................................................
SECTION 13.05 Notices .....................................................
SECTION 13.06 Severability of Provisions...................................
SECTION 13.08 Successors and Assigns.......................................
SECTION 13.09 Article and Section Headings.................................
SECTION 13.10 Notices and Information to Rating Agencies...................
SECTION 13.12 Successor to a Servicer......................................
EXHIBITS
Exhibit A Mortgage Loan Schedule
Exhibit G Form of Acknowledgment
Exhibit H Request for Release and Receipt of Documents
This Servicing Agreement, dated and effective as of _________ __, 199__,
among ICCMAC Commercial Trust [______], a _____________Trust, as Issuer,
____________________, as Master Servicer and Special Servicer, and
____________________, as Trustee.
PRELIMINARY STATEMENT:
The Issuer is a trust established under the laws of the State of
___________ by Imperial Credit Commercial Mortgage Acceptance Corp. (the
"Company"), pursuant to a Deposit Trust Agreement, dated as of _________, l99___
(the "Deposit Trust Agreement"), between the Company and ______________ as owner
trustee (in such capacity, the "Owner Trustee"). Pursuant to the Deposit Trust
Agreement, the Company delivered to, and deposited with, the Owner Trustee, as
owner trustee, on behalf of the Issuer, certain [provide general description of
Mortgage Loans] mortgage loans (the "Mortgage Loans"), which are more
specifically identified on Exhibit A hereto and which had been acquired by the
Company from _______________ as seller (in such capacity, the "Mortgage Loan
Seller") pursuant to the Mortgage Loan Purchase Agreement, dated as of
________________, 199___ (the "Mortgage Loan Purchase Agreement"), between the
Company and the Mortgage Loan Seller.
Pursuant to an Indenture, dated as of __________, 199__ (the "Indenture"),
between the Owner Trustee, as owner trustee, on behalf of the Issuer, and the
Trustee, as indenture trustee, on behalf of the Bondholders, the Issuer issued
collateralized mortgage bonds (collectively, the "Bonds"), in multiple classes
(each, a "Class"), secured by a pledge of, among other things, the Mortgage
Loans.
The parties hereto desire to provide for, among other things, the servicing
and administration of the Mortgage Loans for so long as the Bonds are
Outstanding.
In consideration of the mutual agreements herein contained, the Issuer, the
Master Servicer, the Special Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms.
Whenever used in this Agreement, including in the Preliminary Statement,
the following words and phrases, unless the context otherwise requires, shall
have the meanings specified in this Article.
"Accepted Servicing Practices": The procedures that the Master Servicer
shall follow in the servicing and administration of mortgage loans, consistent
with the higher of (i) the standard of care, skill, prudence and diligence with
which the Master Servicer services and administers, mortgage loans that are held
for other portfolios and are similar to the Mortgage Loans and (ii) the standard
of care, skill, prudence and diligence which the Master Servicer services and
administers mortgage loans that are held for its own portfolio and are similar
to the Mortgage Loans, in either case giving due consideration to customary and
usual standards of practice of prudent institutional multifamily and commercial
mortgage loan servicers but without regard to:
(i) any relationship that the Master Servicer or any Affiliate
of the Master Servicer may have with any Mortgagor or any
Affiliate of any Mortgagor or any other party to this
Agreement;
(ii) the Master Servicer's obligations to make Advances with
respect to the Mortgage Loans;
(iii) the adequacy of the Master Servicer's compensation for its
services hereunder or with respect to any particular
transaction;
(iv) the ownership, servicing or management for others by the
Master Servicer of any other mortgage loans or property; or
(v) the ownership by the Master Servicer of any Bonds or other
securities.
To the extent consistent with the foregoing and subject to the express
limitations set forth in this Agreement, the procedures followed by the Master
Servicer shall seek to maximize the timely and complete recovery of principal
and interest on the Mortgage Loans.
"Accepted Special Servicing Practices": The procedures that the Special
Servicer shall follow in the servicing, administration and disposition of
distressed mortgage loans and related real property, consistent with the higher
of (i) the standard of care, skill, prudence and diligence with which the
Special Servicer services, administers and disposes of, distressed mortgage
loans and related real property that are held for other portfolios and are
similar to the Mortgage Loans, Mortgaged Property and REO Property and (ii) the
standard of care, skill, prudence and diligence with which the Special Servicer
services, administers and disposes of, distressed mortgage loans and related
real property that is held for its own portfolio and are similar to the Mortgage
Loans, Mortgaged Property and REO Property, giving due consideration to
customary and usual standards of practice of prudent institutional multifamily
and commercial mortgage lenders, loan servicers and asset managers, so as to
maximize the net present value of recoveries on the Mortgage Loans, but without
regard to:
(i) any relationship that Special Servicer or any Affiliate of
the Special Servicer may have with any Mortgagor or any
Affiliate of any Mortgagor or any other party to this
Agreement;
(ii) the adequacy of the Special Servicer's compensation for its
services hereunder or with respect to any particular
transaction;
(iii) the ownership, servicing or management for others by the
Special Servicer of any other mortgage loans or property; or
(iv) the ownership by the Special Servicer of any Bonds or other
securities issued in connection with any Securitization.
"Adjustable Rate Mortgage Loan": A Mortgage Loan as to which the related
Mortgage Note provides for periodic adjustments to the Mortgage Interest Rate
thereon based on changes in the related Index.
"Adjusted Available Payment Amount": With respect to any Payment Date, the
Available Payment Amount net of any Net Prepayment Premiums.
"Adjusted Collateral Value": With respect to any Payment Date, the excess
of the Stated Principal Balance of any Mortgage Loan over the related Collateral
Value Adjustment.
"Advance": A P&I Advance or Servicing Advance.
"Advance Rate": An annual rate equal to the Prime Rate in effect from time
to time.
"Affiliate": With respect to any specified Person, any other Person
controlling, controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement": This Servicing Agreement and all amendments hereof and
supplements hereto.
"Asset Strategy Report": The report prepared pursuant to Section 6.03(c).
"Assignment of Leases and Rents": With respect to any Mortgaged Property,
any assignment of leases, rents and profits or similar agreement executed by the
Mortgagor, 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 the Mortgage, notice of transfer
or equivalent instrument in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to effect the
transfer of the Mortgage to the Issuer, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering the Mortgage Loans secured by Mortgaged Properties located in the same
jurisdiction, if permitted by law.
"Assumed Final Payment Date": __________, which is the first Payment Date
following the second anniversary of the date at which the Stated Principal
Balance of all the Mortgage Loans has been reduced to zero, assuming no
prepayments and that the Balloon Mortgage Loans fully amortize according to
their amortization schedule and no Balloon Payment is made.
"Available Payment Amount": With respect to any Payment Date, the amount on
deposit in the Bond Account as of the close of business on the related
Determination Date immediately preceding such Payment Date, after giving effect
to expenses of the Issuer pursuant to this Agreement.
"Balloon Mortgage Loan": Any Mortgage Loan that by its original terms or by
virtue of any modification provides for an amortization schedule extending
beyond its Maturity Date.
"Balloon Payment": With respect to any Balloon Mortgage Loan as of any date
of determination, the amount outstanding on the Maturity Date of such Mortgage
Loan in excess of the related Monthly Payment.
"Bankruptcy Code": The federal Bankruptcy Code, as amended from time to
time (Title 11 of the United States Code).
"Book-Entry Bond": Any Bond registered in the name of the Depository or its
nominee.
"Business Day": Any day other than a Saturday, a Sunday or a day on which
banking and savings and loan institutions in the states of California, New York,
Illinois or Missouri are authorized or obligated by law or executive order to
remain closed.
"Bond": Any Class A-1, Class A-2, Class B, Class C, Class D, Class E or
Class F Bond.
"Bond Account": The segregated trust account or accounts created and
maintained by the Trustee pursuant to Section 7.05 of the Indenture.
"Bond Balance": With respect to any Class A-1, Class A-2, Class B, Class C,
Class D, Class E or Class F Bond, as of any date of determination, the then
outstanding principal amount of such Bond equal to the product of (a) the
Percentage Interest evidenced by such Bond, multiplied by (b) the then Class
Balance of the Class of Bonds to which such Bond belongs.
"Bondholder" or "Holder": The Person in whose name a Bond is registered in
the Bond Register, except that, solely for the purposes of giving any consent,
approval or waiver pursuant to this Agreement, any Bond registered in the name
of the Master Servicer, the Issuer or any Affiliate of either shall be deemed
not to be outstanding with respect to Sections 9.04 and 13.01. The Trustee shall
be entitled to request and rely upon a certificate of the Master Servicer or the
Issuer in determining whether a Bond is registered in the name of an Affiliate
of such Person.
"Bond Owner": With respect to a Book-Entry Bond, the Person who is the
beneficial owner of such Bond as reflected on the books of an indirect
participating brokerage firm for which a Depository Participant acts as agent,
if any, and otherwise on the books of a Depository Participant, if any, and
otherwise on the books of the Depository.
"Bond Register" and "Bond Registrar": The register maintained and the
registrar appointed pursuant to Section 2.05 of the Indenture.
"Class": Collectively, all of the Bonds bearing the same capital letter
designation.
"Class A-1 Bond": Any of the Bonds issued hereunder and designated as such.
"Class A-1 Bond Interest Rate": With respect to any Payment Date, the per
annum rate equal to the lesser of (a) LIBOR plus __% and (b) the Weighted
Average Remittance Rate.
"Class A-2 Bond": Any of the Bonds issued hereunder and designated as such.
"Class A-2 Bond Interest Rate": With respect to any Payment Date, the per
annum rate equal to the lesser of (a) LIBOR plus __% and (b) the Weighted
Average Remittance Rate.
"Class B Bond": Any of the Bonds issued hereunder and designated as such.
"Class B Bond Interest Rate": With respect to any Payment Date, the per
annum rate equal to the lesser of (a) LIBOR plus __% and (b) the Weighted
Average Remittance Rate.
"Class Balance": With respect to any Class, the aggregate principal amount
of such Class outstanding as of any date of determination equal to (A) the
Original Class Balance thereof plus (B) any Collateral Value Adjustment
Capitalization Amount minus (C) any amounts allocated or distributed to such
Class in reduction of its Class Balance pursuant to the terms hereof.
"Class C Bond": Any of the Bonds issued hereunder and designated as such.
"Class C Bond Interest Rate": With respect to any Payment Date, the per
annum rate equal to the lesser of (a) LIBOR plus __% and (b) the Weighted
Average Remittance Rate.
"Class D Bond": Any of the Bonds issued hereunder and designated as such.
"Class D Bond Interest Rate": With respect to any Payment Date, the per
annum rate equal to the lesser of (a) LIBOR plus __% and (b) the Weighted
Average Remittance Rate.
"Class E Bond": Any of the Bonds issued hereunder and designated as such.
"Class E Bond Interest Rate": With respect to any Payment Date, the per
annum rate equal to __% per annum.
"Class F Bond": Any of the Bonds issued hereunder and designated as such.
"Class F Bond Interest Rate": With respect to any Payment Date, the per
annum rate equal to __% per annum.
"Code": The Internal Revenue Code of 1986, as amended from time to time.
"Collateral Value Adjustment": With respect to a Mortgage Loan as to which
a Collateral Value Adjustment Event has occurred, an amount equal to the excess
of (a) the Stated Principal Balance of the Mortgage Loan as of the date of the
Collateral Value Adjustment Event over (b) the excess of (i) __% of the current
appraised value of the related Mortgaged Property as determined by an
Independent MAI appraiser conducted under MAI appraisal standards prepared in
accordance with 12 CFR ss.225.62 over (ii) the sum of (A) to the extent not
previously advanced by a Servicer, all unpaid interest on such Mortgage Loan at
a per annum rate equal to the Mortgage Interest Rate, (B) all unreimbursed
Advances and interest thereon at the Advance Rate, (C) any unpaid Servicing Fees
and Trustee Fees and (D) all currently due and delinquent real estate taxes and
assessments, insurance premiums and, if applicable, ground rents in respect of
such Mortgaged Property (net of any amount escrowed or otherwise available for
payment of any amounts due on the related Mortgage Loans with respect to such
Mortgage Loan or REO Property) and estimated liquidation expenses.
Notwithstanding the foregoing, a Collateral Value Adjustment will be zero with
respect to such Mortgage Loan if (i) the event giving rise to such Collateral
Value Adjustment is the extension of the maturity of such Mortgage Loan, (ii)
the payments on such Mortgage Loan were not delinquent during the twelve months
preceding such extension and (iii) the payments on such Mortgage Loan were then
current, provided that if at any later date there occurs a delinquency in
payment with respect to such Mortgage Loan, the Collateral Value Adjustment will
be recalculated and applied as described above.
"Collateral Value Adjustment Capitalization Amount": With respect to each
class of Bonds to which a Collateral Value Adjustment has been allocated, and to
the extent not reversed, interest accrued at the related Bond Interest Rate on
the portion of the Class Balance of such class equal to the sum of the aggregate
Collateral Value Adjustment allocated to such class for such Payment Date and
accrued and unpaid interest at the related Bond Interest Rate on such Collateral
Value Adjustment amount for prior Payment Dates.
"Collateral Value Adjustment Event": With respect to any Mortgage Loan the
earliest to occur of (i) 90 days after the date on which an uncured delinquency
occurs in respect of such Mortgage Loan, (ii) immediately after the date on
which a receiver is appointed (if such appointment remains in effect during such
60-day period) in respect of the related Mortgaged Property, (iii) the date on
which the related Mortgaged Property becomes an REO Property or (iv) the date on
which the payment rate, Mortgage Interest Rate, principal balance, amortization
terms or Maturity Date of such Mortgage Loan has been changed or otherwise
materially modified pursuant to and in accordance with the terms hereof.
"Collateral Value Adjustment Reduction Amount": With respect to the Class
__ Bonds, the portion of the Interest Accrual Amount accrued on the portion of
the related Notional Amount corresponding to any Collateral Value Adjustment or
Collateral Value Adjustment Capitalization Amount allocated, and not reversed,
to the Class Balance of any class of Bonds.
"Collection Account": The separate account, which shall be an Eligible
Account, created and maintained pursuant to Section 4.02 hereof.
"Condemnation Proceeds": With respect to each Mortgage Loan, all awards or
settlements in respect of a Mortgaged Property, whether permanent or temporary,
partial or entire, on account of the exercise of the power of eminent domain or
condemnation, held in an escrow account or a trust account, which is an Eligible
Account, pursuant to the terms of the related Mortgage Loan Documents and
applicable law, related to such Mortgaged Property and applied or to be applied
to the restoration or repair of such Mortgaged Property or required to be
released to a Mortgagor in accordance with the terms of the related Mortgage
Loan Documents or, to the extent not expressly provided therein, in accordance
with Accepted Servicing Practices or Accepted Special Servicing Practices, as
applicable, and applicable law.
"Controlling Bondholder": As defined in Section 6.11 hereof.
"Cut-off Date": __________, 199_.
"Cut-off Date Balance": With respect to any Mortgage Loan, the outstanding
principal balance of such Mortgage Loan as of the Cut-off Date, net of the
principal portion of all unpaid Monthly Payments due on or before such date.
"Defaulted Mortgage Loan": Any Mortgage Loan which is more than 60 days
delinquent in whole or in part in respect of any Monthly Payment or is
delinquent in whole or in part in respect of the related Balloon Payment, if
any; provided that for purposes of this definition, no Monthly Payment (other
than a Balloon Payment) shall be deemed delinquent if less than five dollars
($5.00) of all amounts due and payable on such Mortgage Loan has not been
received as of the most recent Due Date therefor.
"Deficient Valuation": With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding principal balance of the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation
results from a proceeding initiated under the Bankruptcy Code or a state court
deficiency proceeding.
"Definitive Bond": Any certificated, fully registered certificate.
"Delivery Date": __________, 199_.
"Issuer": ICCMAC Commercial Trust [______], or its successor in interest.
"Depository": The Depository shall at all times be a "clearing corporation"
as defined in Section 8-102(3) of the Uniform Commercial Code of the State of
New York and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Securities Exchange Act of 1934, as amended. The initial
Depository shall be The Depository Trust Company, a nominee of which is CEDE &
Co.
"Depository Participant": A broker, dealer, bank or other financial
institution or other person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited by the Depository.
"Determination Date": With respect to any Payment Date, the 10th day of the
month in which such Payment Date occurs or, if such day is not a Business Day,
the immediately succeeding Business Day.
"Directing Bondholder": The Monitoring Bondholder selected by a majority of
the Monitoring Bondholders, by Bond Balance, as certified to the Trustee by the
Bond Owners from time to time; provided, that, absent such selection, or (i)
until a Directing Bondholder is so selected, or (ii) upon receipt of notice from
a majority of the Monitoring Bondholders, by Bond Balance, that a Directing
Bondholder is no longer so designated, the Monitoring Bondholder(s) which owns
the largest aggregate Bond Balance of one or more Monitoring Classes shall be
the Directing Bondholder.
"Directly Operate": With respect to any REO Property, the furnishing or
rendering of services to the tenants thereof, the management or operation of
such REO Property, the holding of such REO Property primarily for sale to
customers, the performance of any construction work thereon or any use of such
REO Property in a trade or business conducted by the Issuer other than through
an Independent contractor; provided, however, that the Issuer (or the Master
Servicer or the Special Servicer on behalf of the Issuer) shall not be
considered to Directly Operate a REO Property solely because the Issuer (or the
Master Servicer or the Special Servicer on behalf of the Issuer) 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.
"Disposition Fee": As defined in Section 6.12 hereof.
"Disqualified Organization": Any of (i) the United States, any State or
political subdivision thereof, any foreign government, any international
organization, or any agency or instrumentality of any of the foregoing, (ii) any
organization (other than a cooperative described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code unless such
organization is subject to the tax imposed by Section 511 of the Code, or (iii)
any organization described in Section 1381(a)(2)(C) of the Code. A corporation
will not be treated as an instrumentality of the United States or of any State
or any political subdivision thereof if all of its activities are subject to tax
and, with the exception of the Federal Home Loan Mortgage Corporation (a
corporate instrumentality of the United States) a majority of its board of
directors is not selected by a governmental unit.
"Payment Date": The twenty fifth (25th) day (or if any such day is not a
Business Day, the Business Day immediately succeeding such twenty fifth (25th)
day) of each month, commencing in __________, 199__.
"Due Date": With respect to any Mortgage Loan, the day of the month set
forth in the related Mortgage Note on which each Monthly Payment thereon is
scheduled to be due.
"Eligible Account": Any of: _______________ an account or accounts
maintained with a federal or state chartered Depository institution or trust
company (i) to the extent funds are on deposit in such account for a period not
in excess of 30 days, the commercial paper, short-term debt obligations or other
short-term deposits of which have the Required Rating or (ii) to the extent
funds are on deposit in such account for a period in excess of 30 days, the
long-term unsecured debt obligations of which have a long term rating of at
least "AA-" by the Rating Agencies (or, if not rated by each Rating Agency, then
by [Standard & Poor's Ratings Services] and if rated by [Fitch IBCA, Inc.] or
[Duff & Phelps Credit Rating Co.], then "AA-" by [Fitch IBCA, Inc.], or [Duff &
Phelps Credit Rating Co.], as applicable, and, if not rated by [Fitch IBCA,
Inc.], is acceptable to it; a segregated trust account or accounts maintained
with the corporate trust department of a federal Depository institution or trust
company or state chartered Depository institution subject to regulations
regarding fiduciary funds on deposit similar to 12 C.F.R. ss. 9.10(b); or an
account or accounts of a Depository institution acceptable to each Rating Agency
(as evidenced in writing by each Rating Agency that use of any such account will
not result in a downgrading, qualification or withdrawal of the ratings then
assigned to the Bonds).
"Environmental Laws": Any present or future federal, state or local law,
statute, regulation or ordinance, and any judicial or administrative order or
judgment thereunder, pertaining to health, industrial hygiene, Hazardous
Materials or the environment, including, but not limited to, each of the
following, as enacted as of the date hereof or as hereafter amended:
(i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. ss.ss. 9601-9657;
(ii) the Resource Conservation and Recovery Act of 1976, 42
U.S.C. ss.ss. 6901-6991i;
(iii) the Toxic Substance Control Act, 15 U.S.C. ss.ss.
2601-2629;
(iv) the Water Pollution Control Act (also known as the Clean
Water Act), 33 U.S.C.ss.1251 et seq.;
(v) the Clean Air Act, 42 U.S.C.ss.7401 et seq.; and
(vi) the Hazardous Materials Transportation Act, 49 U.S.C.ss.
1801 et seq.
"Event of Default": One or more of the events described in Section 9.01.
"Excess Condemnation Proceeds": With respect to each Mortgage Loan, all
awards or settlements in respect of a Mortgaged Property, whether permanent or
temporary, partial or entire, on account of the exercise of the power of eminent
domain or condemnation, other than any such awards or settlements held in an
escrow account or a trust account, which shall be an Eligible Account, pursuant
to the terms of the related Mortgage Loan Documents and applicable law, related
to such Mortgaged Property and applied or to be applied to the restoration or
repair of such Mortgaged Property or required to be released to a Mortgagor in
accordance with the terms of the related Mortgage Loan Documents or, to the
extent not expressly provided therein, in accordance with Accepted Servicing
Practices or Accepted Special Servicing Practices, as applicable, and applicable
law.
"Excess Insurance Proceeds": With respect to each Mortgage Loan, proceeds
of any primary hazard insurance policy required to be maintained pursuant to
Section 4.06, title insurance policy or any other Insurance Policy covering such
Mortgage Loan or the related Mortgaged Property, other than any proceeds to be
held in an escrow account or a trust account, which shall be an Eligible
Account, pursuant to the terms of the related Mortgage Loan Documents and
applicable law, related to such Mortgage Loan and applied or to be applied to
the restoration or repair of the related Mortgaged Property or required to be
released to the related Mortgagor in accordance with the terms of the related
Mortgage Loan Documents or, to the extent not expressly provided therein, in
accordance with Accepted Servicing Practices or Accepted Special Servicing
Practices, as applicable, and applicable law.
"FDIC": The Federal Deposit Insurance Corporation, or any successor
thereto.
"Final Certification": As defined in Section 2.02(b).
"Final Recovery Determination": A determination by the Special Servicer
with respect to any Defaulted Mortgage Loan, as certified in writing by a
Servicing Officer setting forth such determination and the procedures and
considerations of the Special Servicer forming the basis of such determination,
that there has been a recovery of all REO Proceeds, Liquidation Proceeds and
other payments or recoveries that the Special Servicer, in its reasonable good
faith judgment, expects to be ultimately recoverable.
"Hazardous Materials": All materials subject to any Environmental Law,
including, without limitation, materials listed in 49 C.F.R. ss. 172.010,
materials defined as hazardous pursuant to ss. 101(14) of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended,
flammable, explosive or radioactive materials, hazardous or toxic wastes or
substances, lead-based materials, petroleum or petroleum distillates or asbestos
or material containing asbestos, polychlorinated biphenyls ("PCBs"), radon gas,
urea formaldehyde and any substances classified as being "in inventory", "usable
work in process" or similar classification that would, if classified as
unusable, be included in the foregoing definition.
"Independent": When used with respect to any specified Person, any such
Person who (i) is in fact independent of the Issuer, the Trustee, the Master
Servicer, the Special Servicer and any and all Affiliates thereof, (ii) does not
have any direct financial interest in or any material indirect financial
interest in any of the Issuer, the Trustee, the Master Servicer, the Special
Servicer or any Affiliate thereof, and (iii) is not connected with the Issuer,
the Master Servicer, the Special Servicer or any Affiliate thereof as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
"Index": With respect to each Adjustable Rate Mortgage Loan and each
Interest Rate Adjustment Date, the base index used to determine the new Mortgage
Interest Rate in effect thereon as specified in the related Mortgage Note.
"Insurance Policy": With respect to any Mortgage Loan, any insurance policy
required to be maintained under this Agreement or the related Mortgage Loan
Documents.
"Insurance Proceeds": With respect to each Mortgage Loan, proceeds of any
primary hazard insurance policy required to be maintained pursuant to Section
4.06 hereof, or any other Insurance Policy covering such Mortgage Loan or the
related Mortgaged Property, to be held in an escrow account or a trust account,
which is an Eligible Account, pursuant to the terms of the related Mortgage Loan
Documents, related to such Mortgage Loan and applied or to be applied to the
restoration or repair of the related Mortgaged Property or required to be
released to the related Mortgagor in accordance with the terms of the related
Mortgage Loan Documents and applicable law, or, to the extent not expressly
provided therein, in accordance with Accepted Servicing Practices or Accepted
Special Servicing Practices, as applicable, and applicable Law.
"Interest Accrual Amount": With respect to each Payment Date and any Class
of Bonds and, interest accrued during the period from and including, in the case
of the Class A-1, Class A-2, Class B, Class C and Class D Bonds, the immediately
preceding Payment Date (or the Delivery Date with respect to the initial Payment
Date) to and including the day immediately preceding the applicable Payment Date
and, in the case of the Class E and Class F, Class Bonds, the first day of the
month preceding the month of the Payment Date (or the closing Date with respect
to the initial Payment Date) to and including the last day of the month
preceding the month of the Payment Date (calculated on the basis of a 360-day
year consisting of twelve 30-day months or calculated based on the actual number
of days in such period and a 360-day year in the case of the Class A-1, Class
A-2, Class B, Class C and Class D Bonds) on the Class Balance or Notional Amount
as the case may be, outstanding immediately prior to such Payment Date at the
then applicable Bond Interest Rate applicable to such Class of Bonds.
"Interest Distribution Amount": With respect to each Payment Date and any
Class, the Interest Accrual Amount for such Payment Date plus (i) any portion of
the Interest Distribution Amount for any prior Payment Date remaining
undistributed, reduced by (ii) the product of (a) any excess of Prepayment
Interest Shortfalls for such Payment Date over any Prepayment Interest Excess
for such Payment Date and any interest not collectible pursuant to the Soldiers'
and Sailors' Civil Relief Act of 1940 and (b) the Interest Accrual Amount on
such Class divided by the Interest Accrual Amount for all such Classes of Bonds
for such Payment Date and (iii)(a) with respect to each Class of Bonds [other
than the Class X Bonds], any Collateral Value Adjustment Capitalization Amount
allocated to such Class and [(b) with respect to the Class X Bonds, any
Collateral Value Adjustment Reduction Amount]. The Interest Distribution Amount
for the Class with the lowest priority with respect to the order of payment of
interest or principal shall be reduced further by the portion of any interest
deferred with respect to any Mortgage Loans (such reduction will be based on the
same basis as distributions of interest are made to the extent allocated to
Classes which receive distributions concurrently). Such deferred amount,
together with interest at the related Bond Interest Rate, shall be payable to
the extent it is collected after such Payment Date.
"Interest Rate Adjustment Date": With respect to each Adjustable Rate
Mortgage Loan, any date on which the related Mortgage Interest Rate is subject
to adjustment pursuant to the related Mortgage Note.
"Interested Person": As of any date of determination with respect to any
Mortgage Loan, the Mortgagor, the Mortgage Loan Seller, the Issuer, the Special
Servicer or the Master Servicer.
"Law": Any judgment, order, decree, writ, injunction, award, statute, rule,
regulation or requirement of any federal, state, local or other agency,
commission, instrumentality, tribunal, governmental authority, arbitrator or
court having or asserting jurisdiction over any particular Person, property or
matter applicable to such particular Person, property or matter.
"LIBOR": With respect to any Payment Date the per annum rate for United
States deposits for one month determined in accordance with Section 1.03.
"LIBOR Business Day": Any day other than (i) Saturday or a Sunday or (ii) a
day on which banking institutions in the city of London, England are required to
or authorized by law to be closed.
"LIBOR Rate Adjustment Date": As defined in Section 1.03 hereof.
"Liquidation Event": With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made with respect to such Mortgage Loan; (iii) such Mortgage
Loan is repurchased by the Mortgage Loan Seller pursuant to Section 2.04; or
(iv) such Mortgage Loan is purchased by the Master Servicer or Special Servicer
pursuant to Section 12.01.
"Liquidation Proceeds": Cash (including any Excess Insurance Proceeds or
Excess Condemnation Proceeds, but excluding REO Proceeds) received in connection
with the liquidation of a Mortgage Loan, whether through the sale or assignment
of such Mortgage Loan, trustee's sale, foreclosure sale or otherwise.
"Loss Mortgage Loan": Any Mortgage Loan (a) as to which a Liquidation Event
has occurred, (b) with respect to which the Master Servicer or Trustee, as
applicable, has determined that an Advance previously made or proposed to be
made is a Nonrecoverable Advance or (c) with respect to which a Deficient
Valuation has been made or a portion of the principal balance thereof has been
otherwise permanently forgiven.
"Master Servicer": ______________________, its successors in interest, or
any successor servicer appointed as such as herein provided.
"Master Servicing Fee": As defined in Section 4.11 hereof.
"Master Servicing Fee Rate": ____% per annum calculated on the basis of
twelve 30-day months and a 360-day year.
"Maturity Date": With respect to any Mortgage Loan as of any date of
determination, the date on which the last payment of principal is due and
payable under the related Mortgage Note.
"Monitoring Bondholder": Each Holder (or Bond Owner, if applicable) of a
Bond of a Monitoring Class as certified to the Trustee from time to time by such
Holder or Bond Owner.
"Monitoring Class": As defined in Section 11.01(c).
"Monthly Payment": With respect to any Mortgage Loan and any Due Date, the
scheduled monthly payment with respect to such Mortgage Loan, excluding any
Balloon Payment, which is payable by a Mortgagor under the related Mortgage Note
and applicable Law and, with respect to a Balloon Mortgage Loan for which a
Balloon Payment is due and has not been made, the monthly payment with respect
to such Balloon Mortgage Loan that would be payable on and after the related
Maturity Date based on the full amortization schedule determined by the Special
Servicer.
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple or leasehold interest in real property
securing a Mortgage Note, including the assignment of leases and rents related
thereto.
"Mortgage Interest Rate": With respect to any Mortgage Loan, the annual
rate at which interest accrues on such Mortgage Loan in accordance with the
terms of the related Mortgage Note.
"Mortgage Loan": Each of the mortgage loans which has been granted as
Collateral pursuant to the Indenture and accepted by the Trustee pursuant to
Section 2.02 and from time to time held by the Trustee on behalf of the
Bondholders, the Mortgage Loans so held pursuant to the Idnenture and Section
2.02 being identified on the Mortgage Loan Schedule (including, any successor
REO Mortgage Loan). As used herein, the term "Mortgage Loan" includes the
related Mortgage Note, Mortgage and other security documents contained in the
related Mortgage Loan File.
"Mortgage Loan Documents": With respect to each Mortgage Loan, to the
extent applicable, the Mortgage, Mortgage Note, Assignment of Mortgage,
Assignment of Leases and Rents (if separate from Mortgage) and assignments
thereof, any security agreements, any UCC Financing Statements, the title
insurance policy, all surveys, all insurance policies, any environmental
liabilities agreements, any escrow agreements for improvements, any guaranties
related to such Mortgage Loan, any prior assignments of mortgage in the event
that the originator is not the originator of record, any collateral assignments
of property management agreements and other services agreements required by the
applicable commitment and other loan documents and all assumption, modification,
consolidation, substitution and extension agreements, any physical assessment
report of the Mortgaged Property, any environmental site assessment of the
Mortgaged Property, any lease subordination agreements and tenant estoppels, any
borrower's counsel opinions and other agreements, if any, pertaining to such
Mortgage Loan.
"Mortgage Loan File": In connection with any Mortgage Loan, all the
documents held or required to be held by the Trustee pertaining to such Mortgage
Loan, including the Mortgage Loan Documents.
"Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase Agreement,
dated __________, 199_, between the Mortgage Loan Seller and the Issuer
regarding the sale, transfer and assignment of the Mortgage Loans to the Issuer.
"Mortgage Loan Schedule": The list of Mortgage Loans granted as Collateral
to secure the Bonds, attached hereto as Exhibit A.
"Mortgage Loan Seller": ____________________ or any successors thereof.
"Mortgage Note": The note or other evidence of indebtedness of a Mortgagor
under a Mortgage Loan, together with all riders thereto and amendments thereof.
"Mortgaged Property": The underlying property (including any REO Property)
that secures a Mortgage Loan, in each case consisting of a parcel or parcels of
land improved by a commercial and/or multifamily building or facility, together
with any personal property, fixtures, leases and other property or rights
pertaining thereto.
"Mortgagor": The obligor or obligors on a Mortgage Note.
"Most Subordinate Class of Bonds": At the time of determination, the Class
to which any Realized Losses would be first allocated to as of such time in
accordance with Section 7.03.
"Net Prepayment Premium": With respect to any Payment Date, the excess (but
not less than zero) of (a) any Prepayment Premium received during the related
Remittance Period and not previously distributed or applied to reimburse to the
Master Servicer with respect to its Servicing Fee over (b) the excess of any
Prepayment Interest Shortfall allocated during the related Remittance Period and
not previously allocated over any Prepayment Interest Excess (but not less than
zero).
"Nonrecoverable Advance": Any Advance previously made or proposed to be
made by the Master Servicer or the Trustee in respect of a Mortgage Loan which
together with interest thereon, in the reasonable good faith judgment of the
Master Servicer or the Trustee will not, or, in the case of a proposed Advance,
would not, be ultimately recoverable by the Master Servicer or the Trustee from
net proceeds and collections received solely with respect to such Mortgage Loan
or the related Mortgaged Property, including related Excess Insurance Proceeds,
Liquidation Proceeds, REO Proceeds, Excess Condemnation Proceeds and escrowed
amounts, which determination shall be in writing accompanied by an Officer's
Bond filed with the Trustee.
"Nonrecoverable Advance Bond": A certificate signed by a Servicing Officer
of the Master Servicer or Responsible Officer, as applicable, setting forth the
determination of a Nonrecoverable Advance and the procedures and considerations
of the Master Servicer or the Trustee forming the basis of such determination
(including but not limited to information such as related income and expense
statements, any appraisals, rent rolls, occupancy status, property inspections,
and other Servicer inquiries with respect to the value of the related Mortgaged
Property).
"Non-United States Person": Any person other than a United States Person.
"Note Margin": With respect to each Adjustable Rate Mortgage Loan, the
fixed number of basis points that is added to the related Index on each Interest
Rate Adjustment Date in accordance with the terms of the related Mortgage Note
to determine, subject to any periodic and lifetime limitations on adjustments
thereto, the related Mortgage Interest Rate.
"Officers' Bond": With respect to any Servicer, a certificate signed by a
Servicing Officer of such Servicer.
"Opinion of Counsel": A written opinion of counsel, who may, without
limitation, be salaried counsel for the Issuer, the Master Servicer, or Special
Servicer, acceptable and delivered to the Trustee, except that any opinion of
counsel relating to any actions or duties which can not be undertaken or are no
longer permitted under applicable law, must be an opinion of counsel who is in
fact Independent.
"Ownership Interest": As to any Bond, any ownership or security interest in
such Bond, including any interest in such Bond as the Holder thereof and any
other interest therein, whether direct or indirect, legal or beneficial, as
owner or as pledgee.
"P&I Advance": Any amounts identified in this Agreement as a P&I Advance.
"Bond Interest Rate": With respect to any Payment Date and the Class A-1,
Class A-2, Class B, Class C, Class D, Class E and Class F Bonds, the Class A-1,
Class A-2, Class B, Class C, Class D, Class E and Class F Bond Interest Rate,
respectively.
"Payment Reserve": With respect to a Mortgage Loan, the amount, if any, of
principal and interest payable thereon required, pursuant to the related
Mortgage Loan Documents, to be deposited into an escrow account to cover a
portion of the related Mortgagor's debt service obligations thereunder.
"Percentage Interest": With respect to any Class of Bonds, the portion of
the relevant Class evidenced by such Bond, expressed as a percentage, the
numerator of which is the initial Bond Balance or initial Notional Amount of
such Bond as of the Delivery Date, as specified on the face thereof, and the
denominator of which is the Original Class Balance or Notional Amount of the
relevant Class.
"Permitted Investments": Any one or more of the obligations and securities
listed below that provide for a date of maturity of not more than 30 days but in
any event not later than the date prior to the date such funds will be required
to be distributed:
(i) direct obligations of, and obligations fully guaranteed by,
the United States of America, or any agency or
instrumentality of the United States of America the
obligations of which are backed by the full faith and credit
of the United States of America;
(ii) federal funds, demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any
Depository institution or trust company incorporated or
organized under the laws of the United States of America or
any state thereof and subject to supervision and examination
by federal and/or state banking authorities, the commercial
paper or other short-term debt obligations of such
Depository institution or trust company (or, in the case of
a Depository institution or trust company which is the
principal subsidiary of a holding company, the commercial
paper or other short-term debt obligations of such holding
company) which has the Required Rating;
(iii) commercial or finance company paper (including both
non-interest-bearing discount obligations and
interest-bearing obligations payable on demand or on a
specified date not more than 270 days after the date of
issuance thereof) that has the Required Rating for
short-term debt;
(iv) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
institution or trust company (acting as principal) meeting
the rating standards described in clause (ii) above and
having maturities of not more than 365 days;
(v) units of taxable money market funds, which funds seek to
maintain a constant asset value and have been rated by each
Rating Agency in its highest rating category or which have
been designated in writing by each Rating Agency as
Permitted Investments for purposes of this definition; and
(vi) any other obligation or security acceptable to each Rating
Agency, as indicated in writing that would not result in a
downgrading, qualification or withdrawal of the ratings then
assigned to the Bonds;
provided, however, that no such instrument shall be a Permitted Investment if
(v) such instrument evidences a right to receive either (A) only interest
payments with respect to the obligations underlying such instrument or (B) both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations; (w) its terms do not have a
predetermined fixed dollar amount of principal due at maturity that cannot vary
or change; (x) to the extent rated, an "r" highlighter is affixed to its rating;
(y) to the extent the related interest rate is variable, interest thereon is not
tied to a single interest rate index plus a single fixed spread (if any), or
does not move proportionately with that index; or (z) such instrument is
purchased at a premium over par.
"Person": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability corporation, limited liability company, limited liability partnership,
or government or any agency or political subdivision thereof.
"Prepayment Assumption": It is assumed for purposes of Section 3.15(l) that
there are no prepayments on the Mortgage Loans and that the Balloon Mortgage
Loans fully amortize according to their amortization schedule and no Balloon
Payment is made.
"Prepayment Interest Excess": With respect to any Payment Date, for each
Mortgage Loan that was subject to a Principal Prepayment in full or in part
after the Due Date occurring in the related Remittance Period, the amount of
interest accrued at the Remittance Rate for such Mortgage Loan on the amount of
such Principal Prepayment during the period from and after such Due Date, to the
extent collected.
"Prepayment Interest Shortfall": With respect to any Payment Date, for each
Mortgage Loan that was subject to a Principal Prepayment in full or in part
prior to the Due Date occurring in the related Remittance Period, the amount of
interest that would have accrued at the Remittance Rate for such Mortgage Loan
on the amount of such Principal Prepayment during the period commencing on the
date as of which such Principal Prepayment was applied to the unpaid principal
balance of the Mortgage Loan and ending on the day immediately preceding such
Due Date, inclusive.
"Prepayment Premium": Any premium, penalty or fee paid or payable, as set
forth in the related Mortgage Note, by a Mortgagor in connection with a
Principal Prepayment.
"Prime Rate": As of any day, the per annum rate reported in The Wall Street
Journal on the immediately preceding Business Day as the prime rate.
"Principal Distribution Amount": With respect to any Payment Date an amount
equal to the aggregate of (a) all scheduled payments of principal (other than
Balloon Payments) due on the Mortgage Loans on the related Due Date whether or
not received and all scheduled Balloon Payments received, (b) if the scheduled
Balloon Payment is not received, with respect to any Balloon Loans on and after
the Maturity Date thereof, the principal payment that would need to be received
in the related month in order to fully amortize such Balloon Loan with level
monthly payments by the end of the term used to derive scheduled payments of
principal due prior to the related Maturity Date, (c) to the extent not
previously advanced, any unscheduled principal recoveries received during the
related Remittance Period in respect of the Mortgage Loans, whether in the form
of liquidation proceeds, insurance proceeds, condemnation proceeds, amounts
received as a result of the purchase of any Mortgage Loan from the Issuer or
receipt of overdue payments, (d) any Collateral Value Adjustment Capitalization
Amount allocated in connection with such Payment Date, and (e) any other portion
of the Adjusted Available Payment Amount remaining undistributed after payment
of any interest payable on the Bonds pursuant to Section [__] of the Indenture
for the related or any prior Payment Date, including any Prepayment Interest
Excess not offset by any Prepayment Interest Shortfall occurring during the
related Remittance Period or otherwise required to reimburse the Master Servicer
and interest distributions on the Mortgage Loans, in excess of interest
distributions on the Bonds, resulting from the allocation of amounts described
in this clause (d) to principal distributions on the Bonds.
"Principal Prepayment": Any payment or other recovery of principal on a
Mortgage Loan that is received in advance of its scheduled Due Date which is not
accompanied by an amount of interest representing scheduled interest due on any
date or dates in any month or months subsequent to the month of prepayment.
"Private Bonds": The [Class E and Class F] Bonds.
"Property Protection Expenses": The following costs and expenses, but, with
respect to items (b) through (n) below, only to the extent that they are paid to
third persons in arms' length arrangements, which may, to the extent expressly
approved in the related Asset Strategy Report, be Affiliates, who are generally
in the business of providing such goods and services and that such expenses are
reasonable for the types of goods or services provided in the geographical area
in which such goods or services are provided: (a) real estate taxes, assessments
and similar charges; (b) premiums for insurance; (c) utility costs; (d) payments
required under service contracts, including but not limited to service contracts
for heating, ventilation and air conditioning systems, elevators, landscape
maintenance, pest extermination, security, model furniture, swimming pool
service, trash removal, answering service, credit checks and monitoring the
satisfaction of real estate tax assessments and the designation from time to
time of special flood hazard areas; (e) payroll costs and benefits for on-site
maintenance personnel, including but not limited to housekeeping employees,
porters and general maintenance and security employees; (f) property management
fees; (g) usual and customary leasing and sales brokerage expenses and
commissions and other costs and expenses associated with marketing, selling or
otherwise disposing of Specially Serviced Mortgage Loans or REO Properties
including, without limitation, marketing brochures, auction services, reasonable
legal fees, surveys, title insurance premiums and other title company costs; (h)
permits, licenses and registration fees and costs; (i) any expense necessary in
order to prevent or cure a breach under a lease, contract or agreement, if the
consequences of failure to prevent or cure could, in the sole judgment of the
Special Servicer, have a material adverse effect with respect to the Mortgage
Loan, REO Property or Mortgaged Property; (j) any expense necessary in order to
prevent or cure a material violation of any applicable law, regulation, code or
ordinance with respect to any Mortgaged Property, including without limitation
any environmental remediation; (k) costs and expenses of appraisals, valuations,
surveys, inspections, environmental assessments, credit reports, or market
studies (including, in each case, review thereof); (l) other such reasonable
marketing, legal, accountants, expert witness fees and other fees and expenses
incurred by the Special Servicer in connection with the enforcement, collection,
foreclosure, management and operation of Specially Serviced Mortgage Loans or
REO Properties, the bankruptcy of any related Mortgagor, and the performance of
their servicing duties under this Agreement; and (m) such other expenses as are
reasonable and immediately necessary to operate the Mortgaged Property or REO
Property.
"Prospectus Supplement": The Prospectus Supplement dated _________ __, 199_
prepared in connection with the offering of the [Class A-1, Class A-2, Class B,
Class C and Class D Bonds.
"Purchase Price": With respect to any Mortgage Loan to be purchased
pursuant to Section 2.02(c), Section 2.04, Section 6.05(a) or Section 12.01, the
Stated Principal Balance thereof as of the date of purchase, together with (i)
all accrued and unpaid interest at the Mortgage Interest Rate on such Mortgage
Loan to but not including the date of purchase, (ii) all related unreimbursed
Advances, (iii) all accrued and unpaid interest on related Advances, and (iv)
any expense arising out of the enforcement of the repurchase obligation and any
costs associated with such repurchase.
"Qualified Insurer": An insurance company:
(i) duly qualified as such under the laws of the state in which
the related Mortgaged Property is located;
(ii) duly authorized and, if required, licensed in such state to
transact the applicable insurance business and to write the
insurance provided; and
(iii) whose claims paying ability is rated at least "A" by each
Rating Agency (or, if not rated by each of the Rating
Agencies, rated at least "A" by two other nationally
recognized statistical rating organizations, which shall
include [Standard & Poor's Ratings Services] and any other
Rating Agency which rates the claims paying ability of such
insurance company, and if not rated by [Fitch IBCA, Inc.],
acceptable to it); or which is acceptable to each Rating
Agency (as evidenced in writing by each Rating Agency that
use of any such Qualified Insurer will not result in a
downgrading, qualification or withdrawal of the ratings then
assigned to the Bonds).
"Rating Agency": Each of [Fitch IBCA, Inc.], [Duff & Phelps Credit Rating
Co.] [and] [Standard & Poor's Ratings Services].
"Realized Loss": With respect to each Loss Mortgage Loan (or REO Property)
as to which a Liquidation Event has occurred, an amount (not less than zero)
equal to (i) the Stated Principal Balance of the Mortgage Loan (or REO Property)
as of the date of the Liquidation Event, plus (ii) interest at the Remittance
Rate from the Due Date as to which interest was last paid or advanced to
Bondholders up to the last day of the month in which such Liquidation Event
occurred on the Stated Principal Balance of such Mortgage Loan (or REO Property)
outstanding during each Remittance Period that such interest was not paid or
advanced, plus (iii) any unreimbursed Advances and interest accrued and payable
thereon at the Advance Rate, minus (iv) the proceeds, if any, received during
the month in which such Liquidation Event occurred, to the extent applied as
recoveries of interest at the Remittance Rate and to principal of the Mortgage
Loan. With respect to each Loss Mortgage Loan with respect to which an Advance
previously made or proposed to be made has been determined to be a
Nonrecoverable Advance an amount (not less than zero) equal to (i) the Stated
Principal Balance of the Mortgage Loan (or REO Property) as of the date of such
determination, plus (ii) interest at the Remittance Rate from the Due Date as to
which interest was last paid or advanced to Bondholders up to the last day of
the month in which such determination was made on the Stated Principal Balance
of such Mortgage Loan (or REO Property) outstanding during each Remittance
Period that such interest was not paid or advanced, plus (iii) any unreimbursed
Advances and interest accrued and payable thereon at the Advance Rate, minus
(iv) the proceeds, if any, received during the month in which such determination
was made, to the extent applied as recoveries of interest at the Remittance Rate
and to principal of the Mortgage Loan. With respect to each Mortgage Loan which
has become the subject of a Deficient Valuation, the difference between the
principal balance of the Mortgage Loan outstanding immediately prior to such
Deficient Valuation and the principal balance of the Mortgage Loan as reduced by
the Deficient Valuation.
"Record Date": With respect to any Payment Date, the last Business Day of
the month immediately preceding the month in which such Payment Date occurs.
"Reference Bank Rate": As defined in Section 1.03.
"Remittance Date": With respect to each Payment Date, one Business Day
preceding such Payment Date.
"Remittance Period": For any Payment Date, the period beginning after a
Determination Date in the immediately preceding month (or the Cut-off Date, in
the case of the first Payment Date) through the related Determination Date.
"Remittance Rate": With respect to any Mortgage Loan, the per annum rate
equal to the excess (adjusted, if necessary, to reflect the actual number of
days in the related Remittance Period and a 360-day year) of the related
Mortgage Interest Rate (without giving effect to any modification or other
reduction thereof following the Cut-off Date) over the sum of the related Master
Servicing Fee Rate and the Trustee Fee Rate.
"Remittance Report": The report prepared pursuant to Section 4.09(a)
hereof.
"REO Account": One or more accounts established pursuant to Section 6.06.
"REO Account Report": The report prepared pursuant to Section 6.08(b)
hereof.
"REO Acquisition": The acquisition by the Special Servicer on behalf of the
Issuer for the benefit of the Bondholders of any Mortgaged Property.
"REO Mortgage Loan": Any Mortgage Loan as to which the related Mortgaged
Property has been acquired by the Special Servicer on behalf of the Issuer
through foreclosure or by deed in lieu of foreclosure, until the Special
Servicer has determined that all amounts that it reasonably expects to recover
from or on account of such Mortgage Loan have been recovered, whether from
Excess Condemnation Proceeds, Excess Insurance Proceeds, Condemnation Proceeds,
Insurance Proceeds, Liquidation Proceeds, REO Proceeds or otherwise (in which
case such Mortgage Loan shall no longer be an REO Mortgage Loan).
"REO Proceeds": Proceeds received in respect of any REO Property
(including, without limitation, proceeds from the rental of the related
Mortgaged Property).
"REO Property": A Mortgaged Property acquired by the Special Servicer on
behalf of the Issuer through foreclosure or by deed in lieu of foreclosure.
"Request for Release and Receipt of Documents": A written Request for
Release and Receipt of Documents, substantially in the form of Exhibit B hereto.
"Required Appraisal Date": With respect to any Mortgage Loan within 30 days
of (a) any Collateral Value Adjustment Event or (b) the occurrence of any event
giving rise to a subsequent Collateral Value Adjustment (including the
delinquency referred to in the last sentence of the definition of "Collateral
Value Adjustment Event") more than twelve months after an appraisal was obtained
with respect to a previous Collateral Value Adjustment.
"Required Rating": For purposes of the definitions of "Eligible Account"
and "Permitted Investments" the following ratings:
(a) with respect to commercial paper, short-term debt obligations or
other short-term deposits, the highest short-term rating category
of each Rating Agency (or, if such obligations are not rated
by[Fitch IBCA, Inc.] or [Duff & Phelps Credit Rating Co.], any
two nationally recognized statistical rating organization, which
shall include [Standard & Poor's Ratings Services] and any other
Rating Agency which rates such obligations or deposits and, if
not rated by [Fitch IBCA, Inc.], acceptable to it); or
(b) with respect to long-term debt obligations, the highest long-term
rating category of each Rating Agency (or, if such obligations
are not rated by [Fitch IBCA, Inc.] or [Duff & Phelps Credit
Rating Co.], any two nationally recognized statistical rating
organization, which shall include [Standard & Poor's Ratings
Services] and any other Rating Agency which rates such
obligations or deposits and, if not rated by [Fitch IBCA, Inc.],
acceptable to it).
"Responsible Officer": When used with respect to the Trustee, any officer
assigned to and working in its 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.
"Security Agreement": With respect to any Mortgage Loan, any security
agreement or equivalent instrument, whether contained in the related Mortgage or
executed separately, creating in favor of the holder of such Mortgage a security
interest in the personal property constituting security for repayment of such
Mortgage Loan.
"Senior Bonds": The [Class A-1, Class A-2, Class B, Class C and Class D
Bonds.
"Servicer": The Master Servicer or the Special Servicer, as applicable.
"Servicing Advance": Any expenses identified in this Agreement as a
Servicing Advance which are incurred by the Master Servicer consistent with
Accepted Servicing Practices or Accepted Special Servicing Practices, as
applicable, or, with respect to any Mortgage Loan.
"Servicing Fee": With respect to any Mortgage Loan and (a) the Master
Servicer, the Master Servicing Fee; and (b) the Special Servicer, the Special
Servicing Fee, as applicable.
"Servicing Officer": With respect to any Servicer, any Assistant Treasurer,
Assistant Secretary, Assistant Vice President, Vice President or other employee
of such Servicer or its general partner, if applicable, involved in, or
responsible for, the administration and servicing of the Mortgage Loans under
this Agreement and authorized to act on behalf of such Servicer, as designated
by inclusion on a list of such Persons furnished to the Trustee and each other
Servicer by the related Servicer, as such list may from time to time be amended
by the related Servicer.
"Servicing Transfer Date": The date after the occurrence of a Servicing
Transfer Event on which the Special Servicer receives the information, documents
and records required to be delivered thereto pursuant to Section 6.02(c).
"Servicing Transfer Event": The occurrence of any of the following with
respect to a Mortgage Loan: (i) such Mortgage Loan becomes a Defaulted Mortgage
Loan; (ii) the related Mortgagor has entered into or consented to bankruptcy,
appointment of a receiver or conservator or a similar insolvency or similar
proceeding, or the Mortgagor has become the subject of a decree or order for
such proceeding which shall have remained in force undischarged or unstayed for
a period of 60 days; (iii) the Master Servicer shall have received notice of the
foreclosure or proposed foreclosure of any other lien on the Mortgaged Property;
(iv) in the judgment of the Master Servicer, a payment default has occurred and
is not likely to be cured by the related Mortgagor within 60 days; (v) the
related Mortgagor admits in writing its inability to pay its debts generally as
they become due, files a petition to take advantage of any applicable insolvency
or reorganization statute, makes an assignment for the benefit of its creditors,
or voluntarily suspends payment of its obligations; (vi) any other material
default has, in the Master Servicer's judgment, occurred which is not reasonably
susceptible of cure within the time periods and on the terms and conditions, if
any, provided in the related Mortgage; (vii) the related Mortgaged Property
becomes REO Property; (viii) if for any reason, the Master Servicer cannot enter
into an assumption agreement upon the transfer by the related Mortgagor of the
Mortgage; or (ix) an event has occurred which, in the reasonable judgment of the
Master Servicer, has or will materially and adversely affect the value of the
Mortgaged Property.
"Special Servicer": ____________________, or its successors in interest or
any successor special servicer appointed as such as herein provided.
"Special Servicing Fee": The compensation the Special Servicer shall be
entitled to receive pursuant to Section 6.12.
"Specially Serviced Mortgage Loan": Any Mortgage Loan with respect to which
a Servicing Transfer Event has occurred and which has not ceased to be a
Specially Serviced Mortgage Loan pursuant to Section 6.10.
"Specially Serviced Mortgage Loan Status Report": With respect to any
Mortgage Loan, shall have the meaning set forth in Section 6.08.
"State Tax Laws": The laws of the states of __________, _____________,
_____________ and ________________ as well as any state the applicability of
which to the Bonds shall have been confirmed to the Trustee in writing either by
the delivery to the Trustee of an Opinion of Counsel to such effect, or by the
delivery to the Trustee of a written notification to such effect by the taxing
authority of such state.
"Stated Principal Balance": With respect to any Mortgage Loan (other than
an REO Mortgage Loan), as of any date of determination, (x) the Cut-off Date
Balance, minus (y) the sum, without duplication, of:
(i) the principal portion of each Monthly Payment and Balloon
Payment due on such Mortgage Loan after the Cut-off Date, to
the extent received from the Mortgagor or advanced (in the
case of any delinquent Monthly Payment) and distributed to
Bondholders before such date of determination;
(ii) all Principal Prepayments received with respect to such
Mortgage Loan after the Cut-off Date, to the extent
distributed to Bondholders before such date of
determination;
(iii) the principal portion of all Insurance Proceeds and
Liquidation Proceeds received with respect to such Mortgage
Loan after the Cut-off Date, to the extent distributed to
Bondholders before such date of determination; and
(iv) any reduction in the outstanding principal balance of such
Mortgage Loan resulting from a Deficient Valuation that
occurred prior to the end of the Remittance Period for the
most recently ended Payment Date.
With respect to any REO Mortgage Loan, as of any date of determination, an
amount (not less than zero) equal to (x) the Stated Principal Balance of the
related Mortgage Loan as of the date of the related REO Acquisition, minus (y)
the sum of:
(i) the principal portion of each P&I Advance made with respect
to such REO Mortgage Loan that was distributed to
Bondholders before such date of determination; and
(ii) the principal portion of all Insurance Proceeds, Liquidation
Proceeds and REO Proceeds received with respect to such REO
Mortgage Loan, to the extent distributed to Bondholders
before such date of determination.
A Mortgage Loan shall be deemed to be owned by the Issuer and pledged as
Collateral to secure the Bonds and to have an outstanding Stated Principal
Balance through and including the Payment Date on which the proceeds, if any,
received in connection with a Liquidation Event in respect thereof are to be
distributed to Bondholders.
"Trustee": ____________________, or its successor in interest in its
capacity as Trustee hereunder, or any successor trustee appointed as herein
provided.
"Trustee Fee Rate": ____% per annum calculated on the basis of twelve
30-day months and a 360-day year.
"UCC Financing Statement": A financing statement executed and filed
pursuant to the Uniform Commercial Code, as in effect in the relevant
jurisdiction, or, in the case of Louisiana or the Commonwealth of Puerto Rico,
the comparable provisions of Louisiana or Puerto Rico law, as applicable.
"Underwriter": Any of ____________________ or ____________________.
"United States Person": 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, or an estate
whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States, or
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
trustees have authority to control all substantial decisions of the trust.
"Weighted Average Remittance Rate": With respect to any Payment Date, the
rate per annum equal to the weighted average, by Stated Principal Balance,
expressed as a percentage and rounded to eight decimal places, of the Remittance
Rates on the Mortgage Loans prior to giving effect to distributions thereon in
the Remittance Period immediately preceding such Payment Date; provided that for
purposes of calculating the Class E and Class F Bond Interest Rates, the
Weighted Average Remittance Rate will be calculated as the rate, based on a
360-day year of twelve 30-day months.
"1933 Act": The Securities Act of 1933, as amended.
SECTION 1.02 Certain Terms.
Terms used herein and not defined herein shall have the meanings given to
such terms in the Indenture.
SECTION 1.03 Determination of LIBOR.
LIBOR applicable to the calculation of the Bond Interest Rates on the Class
A-1, Class A-2, Class B, Class C and Class D Bonds for any Interest Accrual
Period will be determined on each LIBOR Rate Adjustment Date as follows:
For any Interest Accrual Period, the rate for United States dollar deposits
for one month which appears on the Telerate Screen Page 3750 as of 11:00 A.M.,
London, England time, on the second LIBOR Business Day prior to the first day of
such Interest Accrual Period (a "LIBOR Rate Adjustment Date"). If such rate does
not appear on such page (or such other page as may replace that page on that
service, or if such service is no longer offered, such other service for
displaying LIBOR or comparable rates as may be reasonably selected by the
Trustee after consultation with the Master Servicer), the rate will be the
Reference Bank Rate. The "Reference Bank Rate" will be determined on the basis
of the rates at which deposits in the U.S. dollars are offered by the reference
banks (which shall be three major banks that are engaged in transactions in the
London interbank market, selected by the Trustee after consultation with the
Master Servicer) as of 11:00 A.M., London time, on the day that is two LIBOR
Business Days prior to the immediately preceding Payment Date to prime banks in
the London interbank market for a period of one month in amounts approximately
equal to the aggregate Class Balance of the Class Balance of the Bonds then
outstanding. The Trustee will request the principal London office of each of the
reference banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate will be the arithmetic mean of the quotations.
If on such date fewer than two quotations are provided, as requested, the rate
will be the arithmetic mean of the rates quoted by one or more major banks in
New York City, selected by the Trustee after consultation with the Master
Servicer, as of 11:00 A.M., New York City time, on such date for loans in U.S.
dollars to leading European banks for a period of one month in amounts
approximately equal to the aggregate Class Balance of the Bonds then
outstanding. If no such quotations can be obtained and no Reference Bank Rate is
available, LIBOR will be LIBOR applicable to the preceding Payment Date.
The establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment Date
and the Trustee's subsequent calculation of the Bond Interest Rates applicable
to the Bonds for the relevant Interest Accrual Period, in the absence of
manifest error, will be final and binding.
Promptly following each LIBOR Rate Adjustment Date the Trustee shall supply
the Master Servicer with the results of its determination of LIBOR on such date.
SECTION 1.04 General Interpretive Principles.
For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:
(a) The terms defined in this Agreement include the plural as well as
the singular, and the use of any gender herein shall be deemed to
include the other gender;
(b) Accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with Generally Accepted Accounting
Principles ("GAAP");
(c) References herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a
document are to designated Articles, Sections, Subsections,
Paragraphs and other subdivisions of this Agreement;
(d) References to a Subsection without further reference to a Section
is a reference to such subsection as contained in the same
Section in which the reference appears, and this rule shall also
apply to Paragraphs and other subdivisions;
(e) The words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any
particular provision;
(f) The term "include" or "including" shall be deemed to be followed
by the phrase "without limitation";
(g) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"
and the words "to" and "until" each means "to but excluding";
(h) The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or
interpretation of this Agreement;
(i) References herein to actions to be taken shall include the
failure to take any action;
(j) Any action or delivery which is required pursuant to the terms
hereof which falls on a day which is not a Business Day will be
due on the immediately following Business Day.
ARTICLE II
CERTAIN MATTERS REGARDING THE MORTGAGE LOANS;
SECTION 2.01. Delivery of Mortgage Loan Files and Related Documents.
(a) In connection with the Grant of the Trust Estate by the Issuer to
secure the Bonds, the Issuer is required to deliver to and deposit with, or
cause to be delivered to and deposited with, the Trustee, on or before the
Closing Date, the Mortgage File for each Mortgage Loan. Also in connection
therewith, the Issuer shall deliver to and deposit with, or cause to be
delivered to and deposited with, the Master Servicer, on or before the Closing
Date: (i) copies of the Indenture and the Mortgage Loan Purchase Agreement; (ii)
copies of the documents comprising the Mortgage File for each Mortgage Loan; and
(iii) all other documents and records in the possession of the Issuer or the
Mortgage Loan Seller that relate to the Mortgage Loans, are necessary for the
servicing of the Mortgage Loans and are not required to be a part of a Mortgage
File in accordance with the definition thereof. The Master Servicer shall hold
all such documents and records delivered to it on behalf of the Trustee in trust
for the benefit of the Bondholders and, subject to the lien of the Indenture,
the Issuer.
(b) The Trustee shall deliver to the Master Servicer within 15 days after
the Closing Date each assignment of Mortgage and assignment of Assignment of
Leases in favor of the Trustee delivered to it as part of a Mortgage File and
each UCC-2 and UCC-3 in favor of the Trustee delivered to it as part of a
Mortgage File, and the Master Servicer shall, at the Mortgage Loan Seller's
expense, as to each Mortgage Loan, promptly (and in any event within 45 days
following the Closing Date) cause each such document to be submitted for
recording or filing, as the case may be, in the appropriate public office for
real property records or UCC Financing Statements, as the Master Servicer deems
appropriate. Each such assignment shall reflect that it should be returned by
the public recording office to the Trustee following recording, and each such
UCC-2 and UCC-3 shall reflect that the file copy thereof should be returned to
the Trustee following filing; provided that in those instances where the public
recording office retains the original assignment of Mortgage or assignment of
Assignment of Leases the Master Servicer shall obtain therefrom a certified copy
of the recorded original. If any such document or instrument is lost or returned
unrecorded or unfilled, as the case may be, because of a defect therein, the
Issuer shall promptly prepare or cause to be prepared a substitute therefor or
cure such defect, as the case may be, and thereafter the Master Servicer shall
upon receipt thereof cause the same to be duly recorded or filed, as
appropriate.
SECTION 2.02. Document Defects and Breaches; Repurchase.
(a) If any party hereto discovers that any document constituting a part of
a Mortgage File has not been properly executed, is missing, contains information
that does not conform in any respect with the corresponding information set
forth in the Mortgage Loan Schedule (and the terms of such document have not
been modified by written instrument contained in the Mortgage File), or does not
appear to be regular on its face (each, a "Document Defect"), or if any party
hereto discovers a breach of any representation or warranty of the Mortgage Loan
Seller relating to any Mortgage Loan set forth in the Mortgage Loan Purchase
Agreement (a "Breach"), such party shall give prompt written notice thereof to
the other parties hereto.
(b) Promptly upon its discovery or receipt of notice of any Document
Default or Breach that materially and adversely affects the value of any
Mortgage Loan or the interests of the Issuer and/or the Bondholders therein, the
Master Servicer shall request that the Mortgage Loan Seller, not later than [90]
days (or such other period as is provided in the Mortgage Loan Purchase
Agreement) from the receipt by the Mortgage Loan Seller of such request, cure
such Document Defect or Breach in all material respects or repurchase the
affected Mortgage Loan at the applicable Purchase Price as, if and to the extent
required by the Mortgage Loan Purchase Agreement; provided that if (i) such
Breach is capable of being cured but not within such 90-day (or other) period,
(ii) the Mortgage Loan Seller has commenced and is diligently proceeding with
the cure of such Breach within such 90-day (or other) period, and (iii) the
Mortgage Loan Seller shall have delivered to the Trustee and the Master Servicer
a certification executed on behalf of the Mortgage Loan Seller by an officer
thereof setting forth the reason that such Breach is not capable of being cured
within an initial 90-day (or other) period, specifying 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 an
additional period not to exceed 90 more days, then the Mortgage Loan Seller
shall have up to an additional 90 days to complete such cure. If the affected
Mortgage Loan is to be repurchased, the Master Servicer shall designate the
Collection Account as the account to which funds in the amount of the Purchase
Price are to be wired, and the Master Servicer shall promptly notify the Trustee
(by delivery thereto of an Officer's Certificate) when such deposit is made. Any
such purchase of a Mortgage Loan shall be on a whole loan, servicing released
basis, and shall be subject to all applicable terms and conditions set forth in
the Indenture. In connection with any such purchase by the Mortgage Loan Seller,
each of the Master Servicer and the Special Servicer shall deliver any portion
of the related Servicing File that is in its possession to such purchaser or its
designee.
(c) If the Mortgage Loan Seller defaults on its obligations to repurchase
any Mortgage Loan as contemplated by this Section 2.02, the Master Servicer
shall promptly notify the Trustee, the Issuer and the Bondholders and shall take
such actions with respect to the enforcement of such repurchase obligations,
including, without limitation, the institution and prosecution of appropriate
legal proceedings, as the Master Servicer shall determine, in its reasonable
good faith judgment, are in the best interests of the Bondholders (taken as a
collective whole) and are not inconsistent with the Indenture. Any and all
expenses incurred by the Master Servicer with respect to the foregoing shall
constitute Servicing Advances in respect of the affected Mortgage Loan.
SECTION 2.03 Representations and Warranties of the Issuer, the Master
Servicer, and the Special Servicer; Assignment of Rights.
(a) The Issuer hereby represents and warrants to and covenants with the
Trustee, the Master Servicer, and the Special Servicer, as of the Delivery Date,
that:
(i) The Issuer is a [trust] duly organized, validly existing and in good
standing under the laws of the State of ____________.
(ii) The execution and delivery of this Agreement by the Issuer, and the
performance and compliance with the terms of this Agreement by the
Issuer, will not violate the Issuer's [Trust Agreeement] 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 agreement or other instrument to which it is a party or which
is applicable to it or any of its assets.
(iii) The Issuer has the full power and authority to enter into and
consummate all transactions contemplated by this Agreement, the
execution, delivery and performance of this Agreement by the Issuer
has been duly authorized, and the Issuer has duly executed and
delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and delivery by
the Trustee, the Master Servicer, and the Special Servicer,
constitutes a valid, legal and binding obligation of the Issuer,
enforceable against the Issuer in accordance with the terms hereof,
subject to (A) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors'
rights generally, and (B) general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at
law.
(v) The Issuer is not in violation of, and its execution and delivery of
this Agreement and its performance and compliance with the terms of
this Agreement will not constitute a violation of, any law, any order
or decree of any court or arbiter, or any order, regulation or demand
of any federal, state or local governmental or regulatory authority,
or any of the provisions of any indenture, mortgage, contract,
instrument, or other document to which such Issuer is a party or by
which it is bound, or result in the creation or imposition of any
lien, charge, or encumbrance upon any of its property pursuant to the
terms of any such indenture, mortgage, contract, instrument, or other
document which violation, in the Issuer's good faith and reasonable
judgment, is likely to affect materially and adversely either the
ability of the Issuer to perform its obligations under this Agreement
or the financial condition of the Issuer.
(vi) No litigation is pending or, to the best of the Issuer's knowledge,
threatened against the Issuer which, if determined adversely to the
Issuer, would prohibit the Issuer from entering into this Agreement
or, in the Issuer's good faith reasonable judgment, is likely to
materially and adversely affect either the ability of the Issuer to
perform its obligations under this Agreement or the financial
condition of the Issuer.
(vii) At the time of the grant of a security interest in the Mortgage Loans
from the Issuer to the Trustee on behalf of the Bondsholders in the
Indenture, the Issuer had good title to and was the sole owner of,
each Mortgage Loan, free and clear of any pledge, lien, encumbrance or
security interest (other than the rights to servicing and related
compensation) and the Mortgage Loans pledged to the Trustee on behalf
of the Holders of the Bonds free and clear of any other pledge, lien,
encumbrance or security interest.
(b) The Master Servicer and Special Servicer hereby represent, warrant and
covenant to the Trustee and the Issuer, as of the Delivery Date, that:
(A) The Master Servicer and Special Servicer is a __________ duly
organized, validly existing and in good standing under the laws of the State of
__________.
(B) The execution and delivery of this Agreement by each Servicer, and the
performance and compliance with the terms of this Agreement by each Servicer,
will not (i) violate such Servicer's certificate of limited partnership or
limited partnership agreement or (ii) 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 agreement or other instrument to which it
is a party or which is applicable to it or any of its assets, which default or
breach, in such Servicer's good faith and reasonable judgment, is likely to
affect materially and adversely either the ability of such Servicer to perform
its obligations under this Agreement or the financial condition of such
Servicer.
(C) Each Servicer has the full power and authority to enter into and
consummate all transactions of such Servicer contemplated by this Agreement, has
duly authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement.
(D) This Agreement, assuming due authorization, execution and delivery by
the Trustee and the Issuer, constitutes a valid, legal and binding obligation of
such Servicer, enforceable against such Servicer in accordance with the terms
hereof, subject to applicable bankruptcy, insolvency, reorganization,
receivership, moratorium and other laws affecting the enforcement of creditors'
rights generally, and general principles of equity, regardless of whether such
enforcement is considered in a proceeding in equity or at law.
(E) Neither Servicer is in violation of, and its execution and delivery of
this Agreement and its performance and compliance with the terms of this
Agreement will not constitute a violation of, any law, any order or decree of
any court or arbiter, or any order, regulation or demand of any federal, state
or local governmental or regulatory authority, or any of the provisions of any
indenture, mortgage, contract, instrument, or other document to which such
Servicer is a party or by which it is bound, or result in the creation or
imposition of any lien, charge or encumbrance upon any of its property pursuant
to the terms of any such indenture, mortgage, contract, instrument or other
document which violation, lien, charge or encumbrance in such Servicer's good
faith and reasonable judgment, is likely to affect materially and adversely
either the ability of such Servicer to perform its obligations under this
Agreement or the financial condition of such Servicer.
(F) No litigation is pending or, to such Servicer's knowledge, threatened
against such Servicer which, if determined adversely to such Servicer, would
prohibit such Servicer from entering into this Agreement or, in such Servicer's
good faith and reasonable judgment, is likely to materially and adversely affect
either the ability of such Servicer to perform its obligations under this
Agreement or the financial condition of such Servicer.
(c) It is understood and agreed that the representations and warranties set
forth in this Section 2.03 shall survive the execution and delivery of this
Agreement, and shall inure to the benefit of the Persons for whose benefit they
were made for so long as the Bonds remain Outstanding. Upon discovery by the
Issuer, the Master Servicer, the Special Servicer or the Trustee of any breach
of any of the foregoing representations and warranties, the party discovering
such breach shall give prompt written notice to the other parties.
SECTION 2.04 Repurchase of Mortgage Loans for Breaches of Representation
and Warranty.
(a) Within 90 days of the earlier of, the discovery by the Mortgage Loan
Seller of, or receipt by the Mortgage Loan Seller of written notice from the
Issuer, the Master Servicer, the Special Servicer, the Trustee or any
Bondholder, specifying in reasonable detail the existence of a breach of any
representation or warranty of the Mortgage Loan Seller in the Mortgage Loan
Purchase Agreement, which materially and adversely affects the value of any
Mortgage Loan or the interest of any Bondholder therein, the Mortgage Loan
Seller shall at its option (A) in all material respects cure such breach or (B)
purchase the affected Mortgage Loan from the Issuer at the Purchase Price.
(b) The purchase of any Mortgage Loan the Mortgage Loan Seller pursuant to
Section 2.04(a) shall be effected by delivering the Purchase Price therefor to
the Master Servicer for deposit in the Collection Account. The Trustee, upon
receipt of an Officers' Bond from the Master Servicer to the effect that such
deposit has been made, shall release or cause to be released to the Mortgage
Loan Seller or its designee, the related Mortgage Loan File and shall execute
and deliver such instruments of transfer or assignment (in recordable form if
recording is appropriate), in each case without recourse, as shall be necessary
to vest in the Mortgage Loan Seller or its designee, any Mortgage Loan released
pursuant hereto. In connection with such repurchase, the Master Servicer, and
the Special Servicer, as applicable, shall release to the Mortgage Loan Seller,
as applicable, all documents and records maintained by such Servicer and
requested by the Issuer or the Mortgage Loan Seller; provided, that such
Servicer may retain copies of such documents and records at its own expense. The
Mortgage Loan Seller, shall be responsible for the payment of all reasonable
expenses of the Trustee and the Servicers incurred in connection with such
repurchase.
(c) It is understood and agreed that the provisions set forth in Section
2.04(a) and (b) of this Agreement shall constitute the sole remedies available
to the Bondholders, or the Trustee on behalf of the Bondholders, respecting any
breach of the representations and warranties contained in the Mortgage Loan
Purchase Agreement.
ARTICLE III
GENERAL PROVISIONS APPLICABLE TO SERVICERS
SECTION 3.01 Contract for Servicing.
(a) Each Servicer, by execution and delivery of this Agreement, agrees to
service the Mortgage Loans pursuant to this Agreement and in all cases in
accordance with Accepted Servicing Practices and Accepted Special Servicing
Practices, as applicable.
(b) Any funds received on or in connection with a Mortgage Loan by a
Servicer shall be received and held by such Servicer in accordance with this
Agreement and pursuant to Accepted Servicing Practices or Accepted Special
Servicing Practices, as applicable, for the benefit of the Bondholders and the
related Mortgagor as their respective interests may appear and as provided in
this Agreement.
SECTION 3.02 Notices to Mortgagors.
The Master Servicer shall, within five (5) Business Days of the Delivery
Date for any Mortgage Loan, send by first class mail or by hand delivery written
notice to the related Mortgagor that the Master Servicer has been engaged to
service such Mortgage Loan, which notice shall direct such Mortgagor to make
further payments and to send all future notices with respect to such Mortgage
Loan directly to the Master Servicer. Notwithstanding the foregoing, the Master
Servicer shall not be required to send such notice if the Mortgage Loans shall
be subserviced by the Mortgage Loan Seller pursuant to a Subservicing Agreement
between the Master Servicer and the Mortgage Loan Seller, and there is no change
in where the Mortgagor is required to send payments under the Mortgage Loan.
SECTION 3.03 Subservicing.
The Master Servicer and the Special Servicer may enter into subservicing
agreements with one or more subservicers (including subsidiaries or affiliates
of the Servicer) for the servicing and administration of the Mortgage Loans.
References in this Agreement to actions taken or to be taken by the Master
Servicer or the Special Servicer in servicing the Mortgage Loans include actions
taken or to be taken by a subservicer on behalf of such Master Servicer.
Notwithstanding any subservicing agreement, any of the provisions of this
Agreement relating to agreements or arrangements between either Servicer and a
subservicer or reference to actions taken through such Persons or otherwise,
such Servicer shall remain obligated and liable to the Issuer and Bondholders
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 subservicing agreements or arrangements, or by virtue of
indemnification from a subservicer, and to the same extent and under the same
terms and conditions as if the such Servicer alone were servicing and
administering the Mortgage Loans. Each Servicer shall be entitled to enter into
any agreement with a subservicer for indemnification of such Servicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.
Any subservicing agreement that may be entered into and any other
transactions or servicing arrangements relating to the Mortgage Loans involving
a subservicer shall be deemed to be between the subservicer and the related
Servicer, and none of the Trustee, the Bondholders nor the Issuer shall be
deemed parties thereto and none of such Persons shall have claims or rights
(except as specified below), nor obligations, duties or liabilities with respect
to the subservicer; provided, that the Trustee and the Bondholders may rely upon
the representations and warranties of the subservicer contained therein and each
of the Trustee and the Issuer shall be a third party beneficiary of the
covenants and other provisions setting forth obligations of the subservicer
therein.
If the Trustee or any successor Servicer assumes the obligations of the
Master Servicer or the Special Servicer, as applicable, in accordance with this
Agreement, the Trustee or such successor Servicer may, at its option, (i)
terminate any subservicing agreement entered into by the Master Servicer or
Special Servicer pursuant to this Section 3.03 or (ii) succeed to all of the
rights and obligations of the Master Servicer or Special Servicer under any
subservicing agreement, and any such subservicing agreement shall provide such
right of termination or succession to the Trustee or such successor Servicer. In
such event, the Trustee or such successor Servicer shall be deemed to have
assumed all of the interest of the Master Servicer or Special Servicer therein
(but not any liabilities or obligations in respect of acts or omissions of the
Master Servicer or Special Servicer prior to such deemed assumption) and to have
replaced the Master Servicer or the Special Servicer, as applicable, as a party
to such subservicing agreement to the same extent as if such subservicing
agreement had been assigned to the Trustee or such successor Servicer, except
that the Master Servicer or the Special Servicer shall not thereby be relieved
of any liability or obligations under such subservicing agreement that accrued
prior to the assumption of duties hereunder by the Trustee or such successor
Servicer.
In the event that the Trustee or any successor Servicer assumes the
servicing obligations of the Master Servicer or the Special Servicer, as
applicable, upon request of the Trustee or such successor Servicer, the Master
Servicer or Special Servicer shall, at its own expense, promptly deliver to the
Trustee or such successor Servicer all documents and records relating to any
subservicing agreement and the Mortgage Loans then being serviced thereunder,
and the Servicer will otherwise use its best efforts to effect the orderly and
efficient transfer of any subservicing agreement to the Trustee or such
successor Servicer.
SECTION 3.04 Record Title to Mortgage Loans, Etc.
No Servicer shall hold record title to any Mortgage or any Mortgage Note.
SECTION 3.05 Release of Documents and Instruments of Satisfaction.
The Trustee may, subject to the terms hereof, upon receipt of a Request for
Release and Receipt of Documents provided by any Servicer substantially in the
form set forth on Exhibit B, release to such Servicer the related Mortgage Loan
File or the documents from a Mortgage Loan File set forth in such request. Each
Servicer acknowledges that during all times that any Mortgage Loan File or any
contents thereof are in the physical possession of such Servicer, such Mortgage
Loan File and the documents contained therein shall be held by the Servicer.
Subject to any state law requirement or court order, each Servicer hereby
agrees to return to the Trustee each and every document previously requested
from the Mortgage Loan File when such Servicer's need therefor in connection
with such foreclosure or servicing no longer exists, unless the related Mortgage
Loan shall be liquidated or paid in full, in which case, upon receipt of the
Request for Release and Receipt of Documents from either Servicer, the Trustee
may release the related Servicer's prior request form, together with all other
documents still retained by the Trustee with respect to such Mortgage Loan, to
such Servicer.
Upon receipt of the payment in full of any Mortgage Loan, or upon the
receipt by the Master Servicer or Special Servicer of a notification that
payment in full will be escrowed in a manner customary for such purposes, such
Servicer shall promptly deliver to the Trustee a Request for Release and Receipt
of Documents in the form set forth on Exhibit B requesting delivery to such
Servicer of the Mortgage Loan File for such Mortgage Loan. In connection
therewith, such Servicer shall deliver to the Trustee a Request for Release and
Receipt of Documents indicating that all amounts received in connection with
such payment that are required to be deposited in the Collection Account
pursuant to Section 4.02 hereof have been or will be so deposited.
The Master Servicer and the Special Servicer shall forward to the Trustee
original documents evidencing an assumption, modification, consolidation or
extension of any Mortgage Loan entered into by such Servicer in accordance with
this Agreement within ten (10) Business Days of the execution thereof and the
delivery of such instrument to such Servicer; provided, however, that such
Servicer may, in lieu thereof, provide the Trustee with a certified true copy of
any such document submitted for recordation within five (5) Business Days of its
execution, in which event such Servicer shall provide the Trustee with the
original of any document submitted for recordation or a copy of such document
certified by the appropriate public recording office to be a true and complete
copy of the recorded original within five (5) Business Days of receipt thereof
by such Servicer.
Upon any payment in full of a Mortgage Loan, the Master Servicer or Special
Servicer may execute an instrument of satisfaction regarding the related
Mortgage and any other related Mortgage Loan Documents, which instruments of
satisfaction shall be recorded by such Servicer if required by applicable law
and shall be delivered to the Person entitled thereto, it being understood and
agreed that all reasonable expenses incurred by such Servicer in connection with
such instruments of satisfaction shall be deemed a Servicing Advance, which
shall be reimbursed pursuant to the terms of this Agreement. Such Servicer shall
notify the Trustee of an instrument of satisfaction described above as soon as
practicable.
SECTION 3.06 Access to Certain Documentation Regarding the Mortgage Loans
and This Agreement.
Upon reasonable advance written notice, each Servicer shall give the
Trustee or its agents or representatives, during normal business hours at such
Servicer's offices, reasonable access to all reports, information and
documentation regarding any Mortgage Loan, this Agreement (including the right
to make copies or extracts therefrom) and access to officers of such Servicer
responsible for such obligations.
SECTION 3.07 Annual Statement As to Compliance.
Each Servicer shall deliver to the Issuer and the Trustee, on or before
April 30 of each year, beginning April 30, 199__, a statement, signed by a
Servicing Officer thereof, stating that (a) a review of the activities of such
Servicer during the preceding calendar year (or during the period from the date
of commencement of its duties hereunder until the end of such preceding calendar
year in the case of the first such certificate) and of its performance under
this Agreement has been made under such Servicing Officer's supervision; and (b)
to the best of such Servicing Officer's knowledge, based on such review, such
Servicer has fulfilled all of its material obligations under this Agreement
throughout such period, or if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such Servicing Officer
and the nature and status thereof.
SECTION 3.08 Annual Independent Public Accountants' Servicing Report.
On or before April 30 of each year, beginning April 30, 199__, each
Servicer, at its expense, shall cause a firm of independent public accountants
that is a member of the American Institute of Certified Public Accountants to
furnish a statement to the Issuer and the Trustee to the effect that such firm
has examined such documents and records as it has deemed necessary and
appropriate relating to the servicing of the Mortgage Loans under this Agreement
for the preceding calendar year (or during the period from the date of
commencement of such servicer's duties hereunder until the end of such preceding
calendar year in the case of the first such certificate) and that, on the basis
of such examination conducted substantially in compliance with the Uniform
Single Attestation Program for Mortgage Bankers, such firm is of the opinion
that such servicing during such period has been conducted in compliance with
this Agreement except for such exceptions that, in the opinion of such firm, the
Uniform Single Attestation Program for Mortgage Bankers requires it to report,
in which case such exceptions shall be set forth in such statement.
SECTION 3.09 Merger or Consolidation of Any Servicer.
(a) Each Servicer shall keep in full force and effect its existence, rights
and franchises as an association or corporation under the laws governing its
charter or articles of incorporation and, in the case of the initial Servicer,
its good standing as a ___________ under the laws of the State of __________;
except as permitted in this Section 3.09 and shall obtain and preserve its
qualification to do business as a foreign corporation, association or limited
partnership, as applicable, in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Agreement, or any of the Mortgage Loans and to perform its duties under this
Agreement.
(b) Any Person into which a Servicer may be merged, converted, or
consolidated, or any Person resulting from any merger, conversion or
consolidation to which a Servicer shall be a party, or any Person succeeding to
the business of a Servicer, shall be the successor of such Servicer hereunder,
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;
provided, however, that the successor or surviving Person shall be an entity
whose business includes the servicing of mortgage loans, shall service
multifamily and/or commercial mortgage loans, as applicable, in accordance with
Accepted Servicing Practices or Accepted Special Servicing Practices, as
applicable, and shall satisfy the requirements of Section 13.12 hereof with
respect to the qualifications of a successor to a Servicer.
SECTION 3.10 Limitation on Liability of the Servicers and Others.
Neither the Servicers or any of the directors, officers, employees or
agents thereof shall be under any liability for any action taken or for
refraining from the taking of any action in accordance with Accepted Servicing
Practices or Accepted Special Servicing Practices, as applicable, and otherwise
in good faith pursuant to this Agreement or for errors in judgment (not
constituting negligence or willful misconduct); provided, however, that this
provision shall not protect any Servicer or such Persons of such Servicer
against any liability resulting from any breach of any representation or
warranty made herein, or from any liability specifically required to be borne by
such party without right of reimbursement pursuant to the terms hereof; and
provided, further, that this provision shall not protect any Servicer or such
Persons of such Servicer against any liability that would otherwise be imposed
by reason of the willful misfeasance, bad faith or negligence in the performance
of duties or by reason of negligent disregard of the obligations or duties
hereunder. Each Servicer and any director, officer, employee or agent thereof
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any appropriate Person respecting any matters arising
hereunder. No Servicer shall, as applicable, be under any obligation to appear
in, prosecute or defend any legal action that is not incidental to its duties to
service the Mortgage Loans in accordance with this Agreement.
SECTION 3.11 Resignation of Servicers.
Without in any way limiting the generality of this Section 3.11, neither
the Master Servicer nor the Special Servicer shall resign as such or delegate
its rights or duties hereunder or any portion thereof; provided that (i) either
Servicer may enter into a Subservicing Agreement subject to Section 3.03 and
(ii) either Servicer may resign upon determination that its duties hereunder are
no longer permissible under applicable law. Any such determination permitting
the resignation of the Servicer shall be evidenced by an Opinion of Counsel
(obtained at the resigning Servicer's expense) to such effect delivered to the
Trustee and acceptable in form and substance thereto. Unless applicable law
requires the Servicer's resignation to become effective immediately, no such
resignation shall become effective until the Trustee or other successor shall
have assumed the responsibilities and obligations of the resigning party in
accordance with Section 8.02 and Section 13.12 hereof.
SECTION 3.12 Maintenance of Errors and Omissions and Fidelity Coverage.
Each Servicer shall obtain and maintain at its own expense, and keep in
full force and effect throughout the term of this Agreement, a blanket fidelity
bond and an errors and omissions insurance policy issued by a surety or insurer
which is a Qualified Insurer covering such Servicer's officers and employees in
connection with its activities under this Agreement.
The deductible on the fidelity bond or errors and omissions policy shall
not exceed the greater of $__________ and five (5) percent of the face amount of
such bond or policy. In the event that any such bond or policy ceases to be in
effect, such Servicer shall immediately obtain a comparable replacement bond or
policy. Notwithstanding the foregoing, so long as the long-term unsecured debt
obligations of such Servicer or its corporate parent have been rated "A" or
better by two or more of the Rating Agencies (one of which shall be [Standard &
Poor's Ratings Services] and, if not rated by [Fitch IBCA, Inc.], is acceptable
thereto), such Servicer shall be entitled to provide self-insurance or obtain
from its parent adequate insurance, as applicable, with respect to its
obligation to maintain a blanket fidelity bond or an errors and omissions
insurance policy.
SECTION 3.13 Indemnity.
(a) Each Servicer shall indemnify and hold harmless the Trustee and the
Issuer against any and all costs, expenses, losses, damages, claims and
liabilities, including reasonable fees and expenses of counsel and expenses of
litigation, arising from claims or actions that were caused by or resulted from
a breach of any of such Servicer's representations and warranties contained in
this Agreement or arising out of the Servicer's willful misfeasance, bad faith
or negligence or by reason of negligent disregard of obligations or duties of
such Servicer hereunder.
(b) Each Servicer and the directors, officers and agents thereof shall be
indemnified and held harmless by the Issuer from any and all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of counsel and expenses of litigation, incurred in connection with any legal
action relating to any Mortgage Loans and this Agreement, other than any costs,
expense, loss, damage, claim or liability incurred by reason of willful
misfeasance, bad faith or negligence of such Servicer in the performance of
duties or by reason of negligent disregard of obligations or duties of such
Servicer hereunder.
(c) As soon as reasonably practicable after receipt by any Servicer, the
Trustee on behalf of the Bondholders, of notice of any complaint or the
commencement of any action or proceeding with respect to which indemnification
is being sought under clause (a) or (b) above (each an "Indemnified Party"),
such Indemnified Party shall notify each Servicer, the Trustee on behalf of the
Bondholders from which indemnification is sought pursuant to clause (a) or
clause (b) above (each an "Indemnifying Party") in writing of such complaint or
of the commencement of such action or proceeding, but failure so to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
which the Indemnifying Party may have hereunder or otherwise, except to the
extent that such failure materially prejudices the rights of the Indemnifying
Party. If the Indemnifying Party so elects or is requested by such Indemnified
Party, the Indemnifying Party shall assume the defense of such action or
proceeding, including the employment of counsel reasonably satisfactory to each
Indemnified Party and the payment of the fees and disbursements of such counsel.
In the event, however, such Indemnified Party reasonably determines in its
judgment that having common counsel would present such counsel with a conflict
of interest or that having common counsel would in any other way disadvantage
such Indemnified Party or if the Indemnifying Party fails to assume the defense
of the action or proceeding in a timely manner, then such Indemnified Party may
employ separate counsel to represent or defend it in any such action or
proceeding and the Indemnifying Party shall pay the fees and disbursements of
such counsel; provided, however, that the Indemnifying Party shall not be
required to pay the fees and disbursements of more than one separate counsel for
all related Indemnified Parties in any jurisdiction in any single action or
proceeding. In any action or proceeding the defense of which the Indemnifying
Party assumes and in which an Indemnified Party is not entitled to separate
counsel pursuant to the immediately preceding sentence, such Indemnified Party
shall have the right to participate in such litigation and to retain its own
counsel at such Indemnified Party's expense.
SECTION 3.14 Information Systems.
Each Servicer shall maintain a data storage and retrieval system capable of
maintaining, updating and providing reports with respect to all relevant
information with respect to each Mortgage Loan that may be required to satisfy
the terms of this Agreement, including but not limited to all information on the
Mortgage Loan Schedule. Each Servicer shall update the data on such system to
reflect any information available thereto from time to time.
ARTICLE IV
OBLIGATIONS OF THE MASTER SERVICER
SECTION 4.01 The Master Servicer.
(a) The Master Servicer shall service and administer each Mortgage Loan
(except as such obligations may be undertaken by the Special Servicer pursuant
to Article VI hereof) on behalf of and in the best interests of and for the
benefit of the Bondholders in accordance with the terms of this Agreement and
Accepted Servicing Practices.
(b) Subject to Accepted Servicing Practices and the terms of this Agreement
and of each Mortgage Loan, the Master Servicer shall have full power and
authority to do or cause to be done any and all things in connection with such
servicing and administration that it may deem, in its best judgment, necessary
or desirable, including, without limitation, to execute and deliver any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to any Mortgage
Loan which is not a Specially Serviced Mortgage Loan. Without limiting the
generality of the foregoing, the Master Servicer shall, and is hereby authorized
and empowered to, with respect to each Mortgage Loan, prepare, execute and
deliver at the expense of the Issuer, any and all financing statements,
continuation statements and other documents or instruments necessary to maintain
the lien on the related Mortgaged Property and related collateral. The Master
Servicer shall service and administer each Mortgage Loan in accordance with
applicable state and federal law and shall provide to each Mortgagor any
information required to be provided to it thereby. Subject to the foregoing, the
Master Servicer shall service and administer each Mortgage Loan in accordance
with the Mortgage Loan Documents, and shall enforce all provisions designated in
the Mortgage Loan Documents, including but not limited to the establishment and
administration of escrow accounts, reserve accounts, impound accounts and
operation and maintenance plans. The Master Servicer may from time to time
request in writing any powers of attorney and other documents necessary or
appropriate to enable the Master Servicer to carry out its servicing and
administrative duties hereunder. If it shall make such written request, the
Master Servicer shall prepare for signature by the Trustee, and the Trustee
shall sign any such powers of attorney or other documents necessary or
appropriate to carry out such duties hereunder; provided, however, that the
Trustee shall not be held liable for any misuse of any such power of attorney by
the Master Servicer.
(c) The Master Servicer assumes, with respect to each Mortgage Loan (except
as otherwise set forth in Article VI), full responsibility for the timely
payment (subject to Section 4.05(b) with respect to any Nonrecoverable Advances)
of all customary, reasonable and necessary "out of pocket" costs and expenses
(including reasonable attorneys' fees and disbursements) incurred in connection
with:
(i) any enforcement, administrative or judicial proceedings, or any
necessary legal work or advice specifically related to servicing the
Mortgage Loans, including but not limited to, bankruptcies,
condemnations, drug seizures, foreclosures by subordinate lienholders,
legal costs associated with preparing powers of attorney pursuant to
Section 4.01(b) above, and other legal actions incidental to the
servicing of the Mortgage Loans (provided that such expenses are
reasonable and that the Master Servicer specifies the Mortgage Loan(s)
to which such expenses relate);
(ii) all ground rents, taxes, assessments, water rates, sewer rates and
other charges, as applicable, that are or may become a lien upon the
Mortgaged Property, and all fire, flood, hazard and other insurance
coverage (to the extent required in this Agreement, including renewal
payments); and
(iii) compliance with the servicing provisions applicable to the Master
Servicer set forth herein.
With respect to any costs described in clauses (i) and (ii) above and to
the extent the related Mortgage Loan Documents do not provide for escrow
payments or the Master Servicer determines that any such payments have not been
made by the related Mortgagor, the Master Servicer shall effect timely payment
of all such expenses before they become delinquent if the Master Servicer shall
have or should have had knowledge based on Accepted Servicing Practices of such
nonpayment by the Mortgagor before it becomes delinquent, and, otherwise, the
Master Servicer shall effect immediate payment of all such expenses which it has
knowledge or should have knowledge based on Accepted Servicing Practices have
become delinquent. The Master Servicer shall make Servicing Advances from its
own funds to effect such payments to the extent not deemed a Nonrecoverable
Advance and shall be reimbursed therefor in accordance with Section 4.03(a)
hereof; provided, that with respect to the payment of taxes and assessments, the
Master Servicer shall make such advance within five Business Days after the
Master Servicer has received confirmation that such item has not been paid;
provided further that the Master Servicer shall use its best efforts to confirm
whether such items have been paid. With respect to any costs described in clause
(iii) above, the Master Servicer shall be entitled to reimbursement of such
costs as Servicing Advances only to the extent expressly provided in this
Agreement. If the Master Servicer determines with respect to any Mortgage Loan
that a Servicing Advance, if made, would constitute a Nonrecoverable Advance or
that it has made a Nonrecoverable Advance, it shall deliver to the Trustee a
Nonrecoverable Advance Bond.
(d) Upon the occurrence of a Servicing Transfer Event or upon the
resignation or termination of the Master Servicer, the Master Servicer shall
effect the timely and efficient transfer of its servicing responsibilities to
the successor Servicer.
SECTION 4.02 Collection Account; Collection of Certain Mortgage Loan
Payments.
(a) Subject to Article VI, from the date hereof until the principal and
interest on the Mortgage Loans is paid in full, the Master Servicer shall
proceed diligently to collect all payments called for under the terms and
provisions of the Mortgage Loans, and shall follow such collection procedures as
are in accordance with Accepted Servicing Practices.
(b) On or before the Delivery Date and as necessary thereafter, the Master
Servicer shall establish, and agrees to maintain for the duration of this
Agreement, the Collection Account in the name of the Trustee for the benefit of
the Bondholders. The Collection Account shall be an Eligible Account. Funds in
the Collection Account shall be held by the Master Servicer for the benefit of
the Bondholders in each case and shall not be commingled with any other moneys.
The Master Servicer shall deposit, within one Business Day following receipt,
all collections with respect to the Mortgage Loans into the Collection Account.
The Master Servicer shall, within five (5) Business Days of the establishment
thereof, notify the Trustee in writing of the location and account number of the
Collection Account established for the Mortgage Loans and shall give the Trustee
written notice of any change of such location or account number on or prior to
the date of such change. Funds in the Collection Account may be invested by, at
the risk of, and for the benefit of, the Master Servicer in Permitted
Investments which shall not be sold or disposed of prior to maturity. All such
Permitted Investments shall be registered in the name of the Master Servicer (in
its capacity as such and for the benefit of the Bondholders) or its nominee. All
income therefrom shall be the property of the Master Servicer. In addition, if
the amounts in the Collection Account are invested for the benefit of the Master
Servicer, the Master Servicer shall deposit on each Determination Date into such
account out of its own funds an amount representing any net losses realized on
Permitted Investments with respect to funds in such account for such Remittance
Period.
(c) The Master Servicer shall deposit the following amounts into the
Collection Account pursuant to clause (b) above:
(i) all payments on account of principal and Principal Prepayments, on the
related Mortgage Loans;
(ii) all payments on account of interest on the related Mortgage Loans,
including default interest net of any portion thereof retained by the
Master Servicer as its Servicing Fee;
(iii) all Liquidation Proceeds, Excess Condemnation Proceeds and Excess
Insurance Proceeds with respect to the related Mortgaged Properties;
(iv) out of the Master Servicer's own funds, an amount representing net
losses realized on Permitted Investments with respect to funds in the
Collection Account;
(v) any amounts representing Prepayment Premiums paid by the related
Mortgagors;
(vi) any amounts received from the Special Servicer pursuant to Section
6.06(d);
(vii) any other amounts received from the Mortgagor with respect to the
related Mortgage Loans; and
(viii) any amounts received from the Special Servicer under Section 6.07
hereof, other than REO Proceeds;
but excluding (1) REO Proceeds which will be remitted to the Special Servicer
for deposit into the REO Account within one Business Day after receipt and (2)
amounts representing fees payable by Mortgagors with respect to Mortgage Loans
which may be retained by the Master Servicer or remitted to the Special
Servicer, as applicable, as additional servicing compensation hereunder.
(d) Subject to Section 4.03(c), all funds deposited by the Master Servicer
in the Collection Account maintained for the benefit of the Bondholders shall be
held for the benefit of the Bondholders until disbursed or withdrawn in
accordance herewith. Except as expressly permitted or required hereunder, the
Master Servicer shall not sell, transfer or assign to any Person any interest
(including any security interest) in amounts credited or to be credited to the
Collection Account or take any action towards that end, and shall maintain such
amounts free of all liens, claims and encumbrances of any nature.
SECTION 4.03 Permitted Withdrawals from the Collection Account.
(a) The Master Servicer may make withdrawals from the Collection Account of
amounts on deposit therein attributable to the related Mortgage Loans for
(without duplication) the following purposes in the following order of priority:
(i) to recoup any amount deposited in the Collection Account and not
required to be deposited therein;
(ii) on each Remittance Date, from amounts representing payments by a
Mortgagor of interest (or advances thereof) on the related Mortgage
Loan or Liquidation Proceeds, Excess Insurance Proceeds and Excess
Condemnation Proceeds with respect to a Mortgage Loan, to pay to
itself the Master Servicing Fee;
(iii) to reimburse the Trustee and itself, in that order, for unreimbursed
P&I Advances from collections on the related Mortgage Loans, together
with interest at the Advance Rate pursuant to Section 4.05 and Section
7.02, the right to withdraw amounts pursuant to this subclause (iii)
being limited to amounts on deposit in the Collection Account in
respect of Liquidation Proceeds, Excess Insurance Proceeds and Excess
Condemnation Proceeds with respect to such Mortgaged Property, and any
other amounts received on the related Mortgage Loan that represent
late recoveries of payments with respect to which such P&I Advances
were made;
(iv) for unreimbursed Servicing Advances incurred in connection with a
Mortgage Loan or Mortgaged Property, together with interest at the
Advance Rate pursuant to Section 4.05, the right to withdraw amounts
pursuant to this subclause (iv) being limited to amounts on deposit in
such Collection Account in respect of Liquidation Proceeds, Excess
Insurance Proceeds and Excess Condemnation Proceeds with respect to
such Mortgaged Property, and any other amounts received on the related
Mortgage Loan that represent late recoveries of payments with respect
to which such Servicing Advances were made;
(v) on each Remittance Date, to pay to the Special Servicer the Special
Servicing Fee, and from time to time, to pay to the Special Servicer
the Disposition Fee;
(vi) on each Remittance Date, to reimburse the Trustee, and itself, in that
order, for accrued and unpaid interest at the Advance Rate on any
reimbursed P&I Advances pursuant to Sections 4.05 and 7.02 made with
respect to any Mortgage Loan from any amounts on deposit in the
Collection Account, to the extent not otherwise offset by default
interest collected on the related Mortgage Loan;
(vii) on each Remittance Date, to reimburse the Trustee and itself, in that
order, from any amounts on deposit in the Collection Account for (A)
any unreimbursed Nonrecoverable Advance for which a Nonrecoverable
Advance Bond has been previously delivered or (B) any unreimbursed
Servicing Advance for an expense the payment or reimbursement of which
is not an obligation of the related Mortgagor under the terms of the
related Mortgage Loan Documents, in each case, together with interest
at the Advance Rate pursuant to Section 4.05 and Section 7.02;
(viii) to the extent not reimbursed or paid pursuant to any other clause of
this Section 4.03(a), to reimburse or pay each Servicer, the Trustee,
and/or the Issuer for unpaid items incurred by or on behalf of such
Person under this Agreement pursuant to which such Person is entitled
to reimbursement or payment from the assets of the Trust;
(ix) on each Remittance Date, to pay itself any reinvestment income on
amounts on deposit in such Collection Account to which it is entitled
pursuant to Section 4.02(b);
(x) on each Remittance Date, to make remittances to the Trustee pursuant
to Section 4.04 hereof; and
(xi) to clear and terminate such Collection Account upon termination of
this Agreement.
(b) The Master Servicer shall keep and maintain separate accounting, on a
Mortgage Loan-by-Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account and determining any shortfall or
overpayment of any amounts due from or on behalf of any Mortgagor or Mortgaged
Property. The Master Servicer shall pay to the Trustee or the Special Servicer
from the Collection Account (to the extent permitted by clause (a) above)
amounts permitted to be paid to the Trustee or the Special Servicer therefrom,
promptly upon receipt of a certificate of a Responsible Officer of the Trustee
or a Servicing Officer of the Special Servicer, as applicable, describing the
item and amount to which the Trustee or the Special Servicer is entitled. The
Servicer may rely conclusively on any such certificate and shall have no duty to
recalculate the amounts stated therein.
(c) The Trustee, the Special Servicer and the Master Servicer shall in all
cases have a right prior to the Bondholders to any funds on deposit in the
Collection Account from time to time for the reimbursement or payment of
compensation, Advances with interest thereon at the Advance Rate and their
respective expenses hereunder to the extent such items are to be reimbursed or
paid from amounts on deposit in the Collection Account pursuant to this
Agreement.
(d) Notwithstanding any other provisions contained herein to the contrary,
the reimbursement of any P&I Advances, together with interest thereon at the
Advance Rate, shall be made in the following order: first, to the Trustee,
second, to the Master Servicer.
SECTION 4.04 Remittances to the Trustee.
On each Remittance Date, the Master Servicer shall (1) withdraw from the
Collection Account and remit to the Trustee, by wire transfer of immediately
available funds to the Collection Account, all amounts on deposit in the
Collection Account as of the close of business on the Determination Date prior
to such Remittance Date, minus:
(i) any permitted charges against or withdrawals from such Collection
Account pursuant to clauses (i) through (ix) of Section 4.03(a)
hereof; and
(ii) any amounts on deposit in the Collection Account representing a
Monthly Payment due on a Due Date following the Remittance Period for
such Determination Date net of any reduction in the aggregate amount
of P&I Advances for such Determination Date pursuant to Section
4.05(a) (which amounts shall be remitted pursuant to this Agreement on
the Remittance Date immediately following the Remittance Period in
which such Monthly Payment was due),
and (2) remit to the Trustee any P&I Advances required to be made on or prior to
such Remittance Date pursuant to Section 4.05(a).
SECTION 4.05 Master Servicer Advances.
(a) To the extent that as of the Determination Date for any month, the full
amount of the Monthly Payment due in such month with respect to any Mortgage
Loan has not been received by the Master Servicer, the Master Servicer shall, on
the related Remittance Date, deposit into the Collection Account, an advance (a
"P&I Advance") in an amount equal to the excess of such Monthly Payment over the
amount received; provided, however, that notwithstanding anything herein to the
contrary, the Master Servicer shall not be required to make a Nonrecoverable
Advance and the Master Servicer shall not be required to make a P&I Advance with
respect to a Balloon Payment. For purposes of the immediately preceding
sentence, the Monthly Payment due on the Maturity Date for a Balloon Mortgage
Loan will be the amount that would be due on such day based on the full
amortization schedule used to calculate the prior Monthly Payments assuming a
later Maturity Date. If the Master Servicer determines that a P&I Advance is
required, it shall on or prior to such Remittance Date deposit in the Collection
Account out of its own funds an amount equal to the P&I Advance; provided,
however, that the aggregate amount of such P&I Advances for any Remittance Date
shall be reduced by any amounts being held for future remittance to the Master
Servicer pursuant to Section 4.04(a)(1)(ii). Any funds being held in the
Collection Account for future distribution and so used shall be replaced by the
Master Servicer from its own funds by deposit in the Collection Account on each
future Remittance Date to the extent that funds in the Collection Account on
such Remittance Date shall be less than payments to the Master Servicer required
to be made on such date. If the Master Servicer determines with respect to any
Mortgage Loan that a P&I Advance, if made, would constitute a Nonrecoverable
Advance or that it has made a Nonrecoverable Advance, it shall deliver to the
Trustee a Nonrecoverable Advance Bond.
(b) To the extent required by the terms of this Agreement, the Master
Servicer shall make Servicing Advances from time to time; provided, however,
that notwithstanding anything herein to the contrary, the Master Servicer shall
not be required to make a Nonrecoverable Advance.
(c) The Master Servicer shall determine whether amounts are available in
the Collection Account or the escrow account to reimburse the Trustee or the
Master Servicer for unreimbursed Advances made pursuant to this Agreement. The
Master Servicer shall promptly (but in any event no later than ten (10) Business
Days following receipt) withdraw all amounts necessary to make such
reimbursement to the extent such withdrawals are permitted under Section
4.03(a), and shall reimburse the Trustee or itself.
(d) The Master Servicer shall be entitled to interest on any Advance made
with respect to a Mortgage Loan. Such interest shall accrue at the Advance Rate
from the date on which such Advance was made to but not including any Business
Day on which the Master Servicer is reimbursed for such Advance pursuant to this
Agreement.
(e) The Master Servicer shall not make any Advance hereunder prior to the
time such Advance is required hereunder.
SECTION 4.06 Maintenance of Insurance.
(a) The Master Servicer shall in accordance with Accepted Servicing
Practices cause the Mortgagor to maintain for each Mortgage Loan (other than REO
Mortgage Loans), and if the Mortgagor does not so maintain, the Master Servicer
shall cause to be maintained for each Mortgaged Property all insurance required
by the terms of the related Mortgage Loan Documents; provided, however, that if
the insurance in the amount required above is not available at a commercially
reasonable cost, or the Trustee, as mortgagee, does not have an insurable
interest, as determined by the Master Servicer in accordance with Accepted
Servicing Practices, the Master Servicer shall not be required to maintain such
policy. Subject to the preceding sentence, hazard insurance shall be maintained
in the amount set forth in the related Mortgage Loan Documents but in any event
in an amount at least equal to the replacement cost of the improvements which
are a part of such property. Such insurance policies shall also provide coverage
in amounts sufficient such that the insurance carrier would not deem the
Mortgagor to be a co-insurer thereunder. All such policies shall provide for at
least thirty days' prior written notice to the Master Servicer of any
cancellation, reduction in the amount of, or material change in, the coverage
provided thereunder. If at any time the Mortgaged Property is in a federally
designated special flood hazard area, the Master Servicer shall cause the
related Mortgagor to maintain or will itself obtain flood insurance in respect
thereof to the extent available at a commercially reasonable cost. Such flood
insurance shall be in an amount equal to the lesser of (x) the unpaid principal
balance of the related Mortgage Loan and (y) the greater of (1) the maximum
amount of such insurance required by the terms of the related Mortgage Note or
Mortgage and (2) the maximum amount of such insurance that is available for the
related Mortgaged Property under the national flood insurance program (assuming
that the area in which such Mortgaged Property is located is participating in
such program). Any cost incurred in maintaining any insurance required pursuant
to this subsection (a) shall not, for the purpose of calculating monthly
distributions to the Bondholders, be added to the unpaid principal balance of
the related Mortgage Loan, notwithstanding that the terms of the Mortgage Loan
so permit but such cost shall be paid by the Master Servicer as a Servicing
Advance and shall be reimbursed as provided in this Agreement. The Master
Servicer shall arrange for the application of all such insurance proceeds (i) to
the restoration or repair of the related Mortgaged Property, (ii) to prepay in
whole or in part the outstanding principal amount of the related Mortgage Note
or (iii) to be released to the related Mortgagor, as the case may be, in all
cases in accordance with the express requirements of the applicable Mortgage
Loan Documents. To the extent the applicable Mortgage Loan Documents require the
delivery of appraisals, engineer's reports, architect's disbursement
certificates or other documents or instruments before any such insurance
proceeds are applied, the Master Servicer shall obtain and verify the same and
any costs so incurred shall be deemed to be a Servicing Advance and shall be
reimbursed as provided in this Agreement. If such insurance proceeds are to be
applied to restoration or repair of the related Mortgaged Property or are to be
released to the related Mortgagor, the Master Servicer shall deliver to the
Trustee prior to such application or release a certificate of a Servicing
Officer of the Master Servicer in reasonable detail specifying the purposes to
which such proceeds are to be applied and the account or Person to which they
are to be transferred.
(b) If the Master Servicer or the Special Servicer, as applicable, causes
any Mortgaged Property or REO Property to be covered by a master force placed
insurance policy, which policy is issued by a Qualified Insurer and provides no
less coverage in scope and amount for such Mortgaged Property or REO Property
than the insurance required to be maintained pursuant to Section 4.06(a), the
Master Servicer or Special Servicer shall conclusively be deemed to have
satisfied its obligations to maintain insurance pursuant to Section 4.06(a).
Such policy may contain a deductible clause, in which case the Master Servicer
or 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 4.06(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 Accepted Servicing Practices or Accepted Special Servicing Practices, as
applicable. In the event that either Servicer shall cause any Mortgaged Property
or REO Property to be covered by such a master force placed insurance policy,
the incremental costs of such insurance applicable to such Mortgaged Property or
REO Property (i.e., other than any minimum or standby premium payable for such
policy whether or not any Mortgaged Property or REO Property is covered thereby)
shall be paid by the Master Servicer as a Servicing Advance.
SECTION 4.07 Enforcement of "Due-on-Sale" Clauses; Assumption Agreements.
(a) To the extent any Mortgage Loan contains an enforceable `due-on-sale'
or `due-on-encumbrance' clause, the Master Servicer shall enforce such clause
unless the Master Servicer determines in accordance with Accepted Servicing
Practices that it would be in the best interest of the Bondholders to waive any
such clause. If the Master Servicer is unable to enforce any such "due-on-sale"
clause or if no "due-on-sale" clause is applicable or the Master Servicer
determines that such clause should be waived, the Master Servicer shall enter
into an assumption agreement with the Person to whom such property has been
conveyed or is proposed to be conveyed, pursuant to which such Person becomes
liable under the Mortgage Note and, to the extent permitted by applicable state
Law and the related Mortgage, the Mortgagor remains liable thereon. The Master
Servicer is also authorized to enter into a substitution of liability agreement
with such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as the Mortgagor and becomes liable
under the Mortgage Note; provided, however, that such substitute Mortgagor must
satisfy the requirements set forth in the related Mortgage Loan Documents or the
underwriting requirements customarily imposed by the Master Servicer's Accepted
Servicing Practices as a condition to approval of a borrower on a new mortgage
loan substantially similar to such Mortgage Loan.
(b) To the extent any Mortgage Loan contains a clause granting a right of
assumption to a qualified substitute Mortgagor upon the sale, conveyance or
transfer of the related Mortgaged Property, the Master Servicer shall enter into
an assumption agreement with such qualified substitute Mortgagor, pursuant to
which such substitute Mortgagor becomes liable under the Mortgage Note. If any
Person other than the Mortgagor has, pursuant to the related Mortgage Loan
Documents, undertaken to indemnify the mortgagee and, in connection with an
assumption of the type referred to in the preceding sentence, the related
Mortgage Loan Documents permit a substitution of such third-party indemnitor by
a qualified substitute indemnitor, the Master Servicer shall enter into an
assumption of liability agreement with such qualified substitute indemnitor,
pursuant to which such substitute indemnitor becomes liable under the relevant
indemnification obligations. The Master Servicer is also authorized to enter
into a substitution of liability agreement with such substitute Mortgagor,
pursuant to which the original Mortgagor is released from liability and such
substitute Mortgagor is substituted as the Mortgagor and becomes liable under
the Mortgage Note; provided, however, that such substitute Mortgagor must
satisfy the requirements set forth in the related Mortgage Loan Documents or the
underwriting requirements customarily imposed by the Master Servicer's regular
commercial mortgage loan origination standards or Accepted Servicing Practices
as a condition to approval of a borrower on a new mortgage loan substantially
similar to such Mortgage Loan.
(c) The Master Servicer shall retain as additional servicing compensation
any fee collected for entering into an assumption or substitution of liability
agreement.
(d) In connection with any assumption under this Section 4.07, no material
term of the Mortgage Note (including, but not limited to, the Mortgage Interest
Rate, the amount of the Monthly Payment, any interest rate floor or cap
applicable to the calculation of the Mortgage Interest Rate and any other term
affecting the amount or timing of payment on the Mortgage Loan) may be changed.
The Master Servicer shall forward to the Trustee the original substitution or
assumption agreement.
(e) Notwithstanding the foregoing or any other provision of this Agreement,
the Master Servicer shall not be deemed to be in default, breach or any other
violation of its obligations hereunder by reason of any conveyance by a
Mortgagor of a Mortgaged Property or any assumption of a Mortgage Loan by
operation of Law that the Master Servicer in good faith determines it may be
restricted by Law from preventing.
SECTION 4.08 Property Inspections.
The Master Servicer shall inspect or cause to be inspected each Mortgaged
Property and shall verify and deliver to the Trustee a copy of a property
inspection report consistent with Accepted Servicing Practices; provided that
(i) each Mortgaged Property securing a Mortgage Loan with an outstanding
principal balance in excess of $_________ shall be inspected and such a property
inspection report shall be delivered to the Trustee at least once a year, (ii)
each Mortgaged Property securing a Mortgage Loan with a principal balance in
excess of $_________ and less than or equal to $_________ shall be inspected and
such a property inspection report shall be delivered to the Trustee at least
once every two years, and (iii) each Mortgaged Property securing a Mortgage Loan
with an outstanding principal less than or equal to $_________ shall be
inspected as necessary or upon notice of any adverse event occurring with the
property, and such a property inspection report shall be delivered to the
Trustee. The Master Servicer shall prepare a summary of such inspection reports
and deliver such summary to each Rating Agency.
SECTION 4.09 Reports of Master Servicer.
(a) The Master Servicer shall prepare, or cause to be prepared, and deliver
to the Trustee in an electronic format agreed to by the Trustee and the Master
Servicer and consistent with Accepted Servicing Practices, not later than the
fourth (4th) Business Day immediately preceding each Payment Date, a copy of a
Remittance Report. Such report shall be in respect of the related Remittance
Period on a Mortgage Loan-by-Mortgage Loan basis to the extent applicable.
(b) The Master Servicer shall prepare and deliver to the Trustee a copy of
the Collection Account reconciliation report in a form agreed to by the Master
Servicer and the Trustee on or prior to the fifteenth day of each calendar
month.
(c) [RESERVED]
(d) The Master Servicer shall prepare and distribute all information
statements relating to payments on the Mortgage Loans in accordance with all
applicable federal and state laws and regulations.
(e) The Master Servicer shall provide the Trustee with any reasonable
information needed by the Trustee which is consistent with Accepted Servicing
Practices with respect to the Mortgage Loans in order to allow the Trustee to
comply with its obligations under this Agreement and shall provide the Special
Servicer with any reasonable information needed by the Special Servicer which is
consistent with Accepted Special Servicing Practices with respect to Specially
Serviced Mortgage Loans and REO Mortgage Loans in order to allow the Special
Servicer to comply with its obligations hereunder pursuant to Article VI.
(f) The Master Servicer shall proceed diligently to collect all reports and
other information required to be prepared and delivered by the Mortgagor
pursuant to the terms of the related Mortgage Loan Documents (including, but not
limited to, rent rolls) and shall forward copies of such information to the
Trustee periodically as such information from Mortgagor is received or as
otherwise directed by the Trustee.
SECTION 4.10 Confirmation of Balloon Payment.
The Master Servicer shall send a letter by first class mail to each
Mortgagor on a Balloon Mortgage Loan at least six (6) months and at least three
(3) months prior to the related Maturity Date reminding such Mortgagor of such
Maturity Date and requesting that not later than sixty (60) days prior to such
Maturity Date such Mortgagor confirm in writing that the payment due on such
Maturity Date will be made on such date and describe in reasonable detail any
arrangements made or to be made with regard to the payment of such Balloon
Payment.
SECTION 4.11 Master Servicer Compensation.
The Master Servicer shall be entitled to a per annum fee (the "Master
Servicing Fee"), with respect to each Mortgage Loan, that shall be equal to one
twelfth of the product of (a) the Master Servicing Fee Rate and (b) the Stated
Principal Balance of such Mortgage Loan as of the Due Date in the preceding
calendar month. The Master Servicing Fee is payable to the extent permitted by
Section 4.03 hereof. The Master Servicer shall also be entitled to receive as
additional servicing compensation (i) all investment income earned on amounts on
deposit in the Mortgagor escrow, impound or reserve accounts (to the extent
consistent with applicable law and the related Mortgage Loan Documents) and the
Collection Account, (ii) all amounts collected with respect to the Mortgage
Loans (that are not Specially Serviced Mortgage Loans) in the nature of late
payment charges, late fees, NSF check charges (including with respect to
Specially Serviced Mortgage Loans), extension fees, modification fees,
assumption fees, and similar fees and charges, and (iii) any Prepayment Interest
Excess (to the extent not offset against any Prepayment Interest Shortfall in
accordance with Section 4.12).
SECTION 4.12 Adjustment of Master Servicer's Compensation.
Notwithstanding anything set forth in this Article, the Master Servicing
Fee for the period ending on a Payment Date shall be reduced (but not below
zero) by an amount equal to any excess of any Prepayment Interest Shortfall over
any Prepayment Interest Excess for such Payment Date. The Master Servicer shall
be entitled to retain on any Payment Date any excess of any Prepayment Interest
Excess for such Payment Date over any Prepayment Interest Shortfall for such
Payment Date.
SECTION 4.13 Implementation of Operations and Maintenance Plans.
To the extent an operations and maintenance plan is required
to be established and executed pursuant to the terms of the related Mortgage
Loan Documents, the Master Servicer shall use reasonable efforts to enforce any
such plans in accordance in with the terms of the Mortgage Loan Document.
ARTICLE V
[RESERVED]
ARTICLE VI
OBLIGATIONS OF THE SPECIAL SERVICER
SECTION 6.01 The Special Servicer.
The Special Servicer, as independent contract servicer, shall service and
administer the Specially Serviced Mortgage Loans and REO Property on behalf of
and in the best interests of and for the benefit of the Bondholders in
accordance with this Agreement and Accepted Special Servicing Practices. In the
event that a Mortgage Loan becomes a Specially Serviced Mortgage Loan, subject
to the provisions contained in this Article VI, the Master Servicer shall
continue to collect all Monthly Payments called for under the terms and
provisions of the Mortgage Loan in accordance with Section 4.02, except as
otherwise directed by the Special Servicer and agreed to by the Servicer in
writing.
SECTION 6.02 Transfer to Special Servicing.
(a) The Master Servicer shall notify the Special Servicer as promptly as
practicable by telephone and in an electronic format reasonably acceptable to
the Master Servicer after it becomes aware of the occurrence of a Servicing
Transfer Event.
(b) Unless the Master Servicer and the Special Servicer with respect to a
Mortgage Loan are the same Person, promptly after the occurrence of a Servicing
Transfer Event, the Master Servicer shall send a letter by first class mail
(with a copy to the Special Servicer) notifying the related Mortgagor that the
related Mortgage Loan has become a Specially Serviced Mortgage Loan and
instructing such Mortgagor to direct all future notices and communications to
the Special Servicer but to continue making Monthly Payments to the Master
Servicer unless otherwise directed by the Special Servicer in writing and agreed
by the Master Servicer.
(c) Not later than five (5) Business Days after the occurrence of a
Servicing Transfer Event, the Master Servicer shall use its best efforts to
provide the Special Servicer with copies of all information, documents and
records (including records stored electronically on computer tapes, magnetic
disks and the like) in its possession relating to each Mortgage Loan with
respect to which notice is required to be delivered pursuant to clause (a)
above. The Master Servicer and the Special Servicer shall take all other actions
necessary or appropriate to effect a transfer of servicing pursuant to this
Section 6.02 or Section 6.10, including but not limited to the preparation,
execution and delivery of any and all necessary or appropriate documents and
other instruments, and will cooperate fully with each other in effecting such
transfer as promptly as possible. Servicing of a Mortgage Loan shall be
automatically transferred to the Special Servicer on the Servicing Transfer
Date.
(d) Following the related Servicing Transfer Date, the Master Servicer
shall not have any further dealings or communications with the related Mortgagor
except as administrator of the Collection Account and the escrow, impound or
reserve accounts. The Master Servicer shall maintain up-to-date information on
each Mortgage Loan which becomes a Specially Serviced Mortgage Loan in order to
properly administer the Collection Account and the escrow, impound or reserve
accounts, to enable it to resume all servicing obligations with respect to a
Mortgage Loan which ceases to be a Specially Serviced Mortgage Loan as promptly
as possible pursuant to Section 6.10 and to provide any reports required under
Article IV. The Special Servicer shall promptly provide to the Master Servicer
all information available to the Special Servicer and not available to the
Master Servicer necessary to maintain such up-to-date information.
(e) Promptly after the Servicing Transfer Date, the Special Servicer shall
send a letter by first class mail hereto notifying the related Mortgagor that
servicing has been transferred to the Special Servicer.
(f) [RESERVED]
(g) Following the occurrence of a Servicing Transfer Date with respect to
any Mortgage Loan, the Special Servicer shall service the related Specially
Serviced Mortgage Loan and REO Property in accordance with this Agreement.
SECTION 6.03 Servicing of Specially Serviced Mortgage Loans.
(a) Following the occurrence of a Servicing Transfer Event, the Special
Servicer shall request from the Trustee the name of the current Directing
Bondholder. The Trustee shall notify the Special Servicer of the identity of the
current Directing Bondholder upon request. Upon receipt of the name of such
current Directing Bondholder from the Trustee, the Special Servicer shall notify
the Directing Bondholder of the occurrence of such Servicing Transfer Event.
Servicing Officers of the Special Servicer shall, at the request of the
Directing Bondholder, be reasonably available during regular business hours to
discuss with such Bondholder objectives and strategies with respect to the
Specially Serviced Mortgage Loans and REO Properties.
(b) Subject to Section 6.03(c) below and Accepted Special Servicing
Practices, in servicing and administering any Specially Serviced Mortgage Loan
or REO Property, the Special Servicer shall have full power and authority to do
any and all things in connection with such servicing and administration that it
may deem in its best judgment necessary or advisable including, without
limitation, to execute and deliver on behalf of the Trustee and the Bondholders
any and all instruments of satisfaction or cancellation or of partial release or
full release or discharge and all other comparable instruments with respect to
such Specially Serviced Mortgage Loan or such REO Mortgage Loan or to agree to
any modification, waiver or amendment of any term and to defer, reduce or
forgive payment of interest and/or principal of any such Specially Serviced
Mortgage Loan. The Special Servicer may not extend the scheduled maturity date
of any Specially Serviced Mortgage Loan to a date later than three years prior
to the Assumed Final Payment Date. The Special Servicer may from time to time
request in writing any powers of attorney and other documents necessary or
appropriate to enable the Special Servicer to carry out its servicing and
administrative duties hereunder. If it shall make such written request, the
Special Servicer shall prepare for signature by the Trustee, and the Trustee
shall sign any such powers of attorney or other documents necessary or
appropriate to carry out such duties hereunder; provided, however, that the
Trustee shall not be held liable for any misuse of any such power of attorney by
the Special Servicer. In addition to the duties and obligations set forth in
this Article VI, the Special Servicer shall assume the rights and obligations of
the Master Servicer set forth in (i) Section 4.07 of this Agreement with respect
to any Specially Serviced Mortgage Loan (but not any liabilities incurred by the
Master Servicer prior to the related Servicing Transfer Date) and (ii) Section
4.06 with respect to REO Properties. Any insurance required to be maintained by
the Special Servicer with respect to REO Properties pursuant to this Section and
any such Section 4.06 shall be maintained with Qualified Insurers.
(c) No later than sixty (60) days after a Servicing Transfer Date for a
Mortgage Loan, the Special Servicer shall deliver to the Trustee, the Master
Servicer, each Rating Agency and the Directing Bondholder a report (the "Asset
Strategy Report"), with respect to such Mortgage Loan and the related Mortgaged
Property. Such Asset Strategy Report shall set forth the following information
to the extent reasonably determinable:
(i) summary of the status of such Specially Serviced Mortgage Loan and any
negotiations with the related Mortgagor;
(ii) consideration of alternatives to the exercise of remedies (such as
forbearance relief, modification of the terms and conditions of such
Mortgage Loan, disposition of the Specially Serviced Mortgage Loan or
the related Mortgaged Property and application of the proceeds of such
disposition to the outstanding principal balance of such Mortgage Loan
and interest thereon, or abandonment of the related Mortgaged
Property);
(iii) a discussion of the probable time frames and estimated amount of any
related Servicing Advances applicable to each of the alternatives
referred to above;
(iv) a discussion of the legal and environmental considerations reasonably
known to the Special Servicer, consistent with the Accepted Special
Servicing Practices, that are applicable to the exercise of remedies
as aforesaid and to the enforcement of any related guaranties or other
collateral for the related Mortgage Loan and a recommendation as to
whether outside legal counsel should be retained;
(v) estimated budgets for any operating or capital funds expected to be
required for the related Mortgaged Property;
(vi) the most current rent roll available for and any strategy for the
leasing or releasing of the related Mortgaged Property;
(vii) the Special Servicer's analysis and recommendations (which will
include a discussion of alternative courses of action and a comparison
of the probable benefits and detriments of each alternative course of
action) on how such Specially Serviced Mortgage Loan might be returned
to performing status and returned to the Master Servicer for regular
servicing under Article IV of this Agreement or otherwise realized
upon; and
(viii) such other information as the Special Servicer deems relevant in
light of the Accepted Special Servicing Practices.
If within ten (10) Business Days of receiving an Asset Strategy Report, the
Directing Bondholder does not disapprove such Asset Strategy Report in writing,
the Special Servicer shall implement the recommended action as outlined in such
Asset Strategy Report; provided, however, that notwithstanding anything herein
to the contrary the Special Servicer may not take and shall not be required to
take any action that is contrary to applicable Law or the terms of the
applicable Mortgage Loan Documents. If the Directing Bondholder disapproves such
Asset Strategy Report, the Special Servicer will revise such Asset Strategy
Report and deliver to the Trustee, the Directing Bondholder, the Servicer and
the Rating Agencies a new Asset Strategy Report as soon as practicable. The
Special Servicer shall revise such Asset Strategy Report as described above in
this Section 6.03(c) until the Directing Bondholder shall fail to disapprove
such revised Asset Strategy Report in writing within ten (10) Business Days of
receiving such revised Asset Strategy Report. The Special Servicer may, from
time to time, modify any Asset Strategy Report it has previously delivered and
implement such report, provided such report shall have been prepared, reviewed
and not rejected pursuant to the terms of this Section. Notwithstanding the
foregoing, the Special Servicer (i) may following the occurrence of an
extraordinary event with respect to the related Mortgaged Property, take any
action set forth in such Asset Strategy Report before the expiration of a ten
(10) Business Day period if the Special Servicer has reasonably determined that
failure to take such action would materially and adversely affect the interest
of the Bondholders and it has made a reasonable effort to contact the Directing
Bondholder and (ii) in any case, shall determine whether such disapproval is not
in the best interest of all the Bondholders pursuant to Accepted Special
Servicing Practices. Upon making such determination, the Special Servicer shall
either implement the Asset Strategy Report or notify the Trustee of such
rejection and deliver to the Trustee a proposed notice to Bondholders which
shall include the Asset Strategy Report, and the Trustee shall send such notice
to all Bondholders (or, to the extent known to the Trustee, Bond Owners). If the
majority of such Bondholders (including Bond Owners), as determined by Bond
Balance, fail within five (5) days of the Trustee's sending such notice to
reject such Asset Strategy Report, the Special Servicer shall implement the
same. If the Asset Strategy Report is rejected by the Bondholders, the Special
Servicer shall revise such Asset Strategy Report as described above in this
Section 6.03(c). The Trustee shall be entitled to be reimbursed by the Issuer
for the reasonable expenses of providing such notices.
(d) The Special Servicer shall have the authority to meet with the
Mortgagor for any Specially Serviced Mortgage Loan and take such actions
consistent with Accepted Special Servicing Practices and the related Asset
Strategy Report. The Special Servicer shall not take any action inconsistent
with the related Asset Strategy Report.
(e) Upon request of any Bondholder (or any Bond Owner, if applicable, which
shall have provided the Trustee with evidence satisfactory to the Special
Servicer and the Trustee of its interest in a Bond pursuant to Section 11.04) or
any Rating Agency, the Trustee shall mail, without charge, to the address
specified in such request a copy of the most current Asset Strategy Report for
any Specially Serviced Mortgage Loan or REO Property.
SECTION 6.04 Title to REO Property; Management of REO Property.
(a) If title to any REO Property is acquired, the deed or certificate of
sale shall be issued to the Issuer on behalf of the Bondholders. In accordance
with Section 6.05, and subject to all applicable terms and conditions of the
Indenture, the Special Servicer, on behalf of the Bondholders and, subject to
the lien of the Indenture, the Issuer, shall sell any REO Property as promptly
as possible within a commercially reasonable time period. Subject to the
foregoing, the Special Servicer shall solicit offers for any REO Property in
such manner as will be reasonably likely to realize a fair price for such REO
Property.
(b) The Special Servicer's decision as to how each REO Property shall be
managed and operated shall be based in either case on the reasonable good faith
judgment of the Special Servicer as to which means would be in the best interest
of the Bondholders and the Issuer (as a collective whole) and, to the extent
consistent with the foregoing, in the same manner as would prudent mortgage loan
servicers and asset managers operating acquired mortgaged property comparable to
the respective REO Property under the same circumstances.
(c) If title to any REO Property is acquired, the Special Servicer shall
manage, conserve, protect and operate such REO Property for the benefit of the
Bondholders and, subject to the lien of the Indenture, the Issuer solely for the
purpose of its prompt disposition and sale in the same manner as would prudent
mortgage loan servicers and asset managers operating acquired mortgaged property
comparable to the respective REO Property under the same circumstances Subject
to the foregoing, however, the Special Servicer shall have full power and
authority to do any and all things in connection therewith as are consistent
with the Servicing Standard and, consistent therewith, shall withdraw from the
REO Account, to the extent of amounts on deposit therein with respect to any REO
Property, funds necessary to pay all Property Protection Expenses
To the extent that amounts on deposit in the REO Account in respect of any
REO Property are insufficient for the purposes set forth in clauses (i) through
(iv) above with respect to such REO Property, the Special Servicer shall advance
such amounts as are necessary for such purposes unless (as evidenced by an
Officer's Certificate delivered to the Trustee) the Special Servicer would not
make such advances if the Special Servicer owned such REO Property or the
Special Servicer determines, in its reasonable good faith judgment, that such
advances would be Nonrecoverable Servicing Advances; provided, however, that the
Special Servicer may make any such Servicing Advance without regard to
recoverability if it is a necessary fee or expense incurred in connection with
the defense or prosecution of legal proceedings.
[(d) The Special Servicer may contract with any Independent Contractor for
the operation and management of any REO Property, provided that:
(i) the terms and conditions of any such contract may not be inconsistent
herewith and shall reflect an agreement reached at arm's length;
(ii) the fees of such Independent Contractor (which shall be expenses
payable out of the Trust Estate) shall be reasonable and customary in
consideration of the nature and locality of the REO Property;
(iii) any such contract shall require, or shall be administered to require,
that the Independent Contractor, in a timely manner, (A) pay all costs
and expenses incurred in connection with the operation and management
of such REO Property, including, without limitation, those listed in
Section 3.17(b) above, and (B) remit all related revenues collected
(net of its fees and such costs and expenses) to the Special Servicer
upon receipt;
(iv) none of the provisions of this Section 3.17(c) relating to any such
contract or to actions taken through any such Independent Contractor
shall be deemed to relieve the Special Servicer of any of its duties
and obligations hereunder with respect to the operation and management
of any such REO Property;
(v) the Special Servicer shall be obligated with respect thereto to the
same extent as if it alone were performing all duties and obligations
in connection with the operation and management of such REO Property;
and
(vi) such Independent Contractor is acceptable to each Rating Agency, and
such appointment will not result in a qualification, downgrading or
withdrawal of any of the ratings then assigned to the Bonds by such
Rating Agency (as evidenced in writing by each such Rating Agency).
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. To the extent the costs of any contract with any
Independent Contractor for the operation and management of any REO Property are
greater than the revenues available from such property, such excess costs shall
be covered by, and be reimbursable as, a Servicing Advance.]
SECTION 6.05 Sale of REO Property and Specially Serviced Mortgage Loans.
Subject to terms of the related Asset Strategy Report, to the extent the
conditions, procedures or requirements set forth therein are more restrictive or
exacting than those set forth below, each Special Servicer agrees as follows:
(a) The Special Servicer may purchase any Defaulted Mortgage Loan or any
REO Property (in each case at the Purchase Price therefor). The Special Servicer
may also offer to sell to any Person any Defaulted Mortgage Loan or any REO
Property, if and when the Special Servicer determines, consistent with Accepted
Special Servicing Practices that such a sale would be in the best economic
interests of the Bondholders. The Special Servicer shall give the Trustee and
the Master Servicer not less than five Business Days' prior written notice of
the Purchase Price and its intention to (i) purchase any Defaulted Mortgage Loan
or REO Property at the Purchase Price therefor or (ii) sell any Defaulted
Mortgage Loan or REO Property, in which case the Special Servicer shall accept
the highest offer received from any Person for any Defaulted Mortgage Loan or
any REO Property in an amount at least equal to the Purchase Price therefor.
In the absence of any such offer, the Special Servicer shall accept the
highest offer received from any Person that is determined by the Special
Servicer to be a fair price for such Defaulted Mortgage Loan or REO Property, if
the highest offeror is a Person other than an Interested Person, or if such
price is determined to be such a price by the Trustee, if the highest offeror is
an Interested Person. Notwithstanding anything to the contrary herein, neither
the Trustee, in its individual capacity, nor any of its Affiliates may make an
offer for or purchase any Defaulted 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 Accepted Special Servicing Practices, that
rejection of such offer would be in the best interests of the Bondholders. In
addition, the Special Servicer may accept a lower offer if it determines, in
accordance with Accepted Special Servicing Practices, that acceptance of such
offer would be in the best interests of the Bondholders (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).
(b) In determining whether any offer received from an Interested Person
represents a fair price for any Defaulted Mortgage Loan or any REO Property, the
Trustee and the Special Servicer 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 Issuer. In determining whether any
offer constitutes a fair price for any Defaulted Mortgage Loan or any REO
Property, the Special Servicer or the Trustee (or, if applicable, such
appraiser) shall take into account, and any appraiser or other expert in real
estate matters shall be instructed to take into account, as applicable, among
other factors, the period and amount of any delinquency on the affected
Defaulted Mortgage Loan, the physical condition of the related Mortgaged
Property or such REO Property and the state of the local economy.
(c) Subject to Accepted Special Servicing Practices, the Special Servicer
shall act on behalf of the Issuer in negotiating and taking any other action
necessary or appropriate in connection with the sale of any Defaulted Mortgage
Loan or REO Property, including the collection of all amounts payable in
connection therewith. Any sale of a Defaulted Mortgage Loan or any REO Property
shall be without recourse to, or representation or warranty by, the Trustee, the
Issuer, the Mortgage Loan Seller, any Servicer, or the Issuer (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
Issuer) and, if consummated in accordance with the terms of this Agreement, none
of the Servicers, the Issuer, the Mortgage Loan Seller, nor the Trustee shall
have any liability to the Issuer or any Bondholder with respect to the purchase
price therefor accepted by the Special Servicer or the Trustee.
(d) The proceeds of any sale after deduction of the expenses of such sale
incurred in connection therewith shall be promptly deposited into the Collection
Account.
SECTION 6.06 REO Account; Collection of REO Proceeds.
(a) The Special Servicer shall establish or cause to be established, and
hereby agrees to maintain or cause to be maintained for the duration of this
Agreement for each REO Mortgage Loan, an REO Account into which all related REO
Proceeds shall be deposited as and when received. Each of the Special Servicer's
REO Account shall be an Eligible Account.
(b) All funds deposited by the Special Servicer in any REO Account
maintained hereunder shall be held for the benefit of the Bondholders until
disbursed or withdrawn in accordance herewith. Funds in such REO Account shall
not be commingled with any other moneys. The Special Servicer shall, within five
(5) Business Days of the establishment thereof, notify the Master Servicer and
the Trustee in writing of the location and the account number of the REO Account
established by the Special Servicer for the Mortgage Loans and shall give the
Trustee and the Master Servicer written notice of any change of such location or
account number on or prior to the date of such change.
(c) Funds in an REO Account may be invested by, at the risk of, and for the
benefit of, the Special Servicer in Permitted Investments which shall not be
sold or disposed of prior to maturity. All such Permitted Investments shall be
registered in the name of the Special Servicer (in its capacity as such and for
the benefit of the Bondholders) or its nominee. All income therefrom shall be
the property of the Special Servicer. In addition, if the amounts in any REO
Account are invested for the benefit of the Special Servicer, the Special
Servicer shall deposit on each Determination Date into such REO Account out of
its own funds an amount representing any net losses realized on the Permitted
Investments with respect to funds in such REO Account for such Remittance
Period.
(d) The Special Servicer shall deposit or cause to be deposited any REO
Proceeds into the applicable REO Account within one Business Day after receipt.
The Special Servicer shall withdraw therefrom funds necessary for the proper
operation, management, and maintenance of any REO Property, including any
Property Protection Expenses. To the extent such REO Proceeds are insufficient
for the purposes set forth in the preceding sentence, the Master Servicer shall
make a Servicing Advance for the amount of such shortfall. The Special Servicer
shall remit to the Master Servicer for deposit into the Collection Account on a
monthly basis prior to the related Remittance Date the REO Proceeds collected
with respect to the related REO Property, net of withdrawals made by the Special
Servicer pursuant to this Section 6.06(d); provided, that for the purpose of
determining the amount of any such remittance, the Special Servicer may retain
in such REO Account reasonable reserves for Property Protection Expenses.
(e) Except as expressly permitted or required hereunder, the Special
Servicer shall not sell, transfer or assign to any Person any interest
(including any security interest) in amounts credited or to be credited to any
REO Account or take any action towards that end, and shall maintain such amounts
free of all liens, claims and encumbrances of any nature.
SECTION 6.07 Remittances to Master Servicer.
Any collections received in respect of a Mortgage Loan, other than REO
Proceeds, shall be remitted to the Master Servicer within one Business Day of
receipt for deposit into the Collection Account established and maintained by
the Master Servicer for the duration of this Agreement pursuant to Section 4.02
of this Agreement.
SECTION 6.08 Specially Serviced Mortgage Loan Status Reports and Other
Reports.
(a) The Special Servicer shall prepare, or cause to be prepared, and
deliver to the Master Servicer, the Trustee and the Rating Agencies, via
facsimile (with a hard copy sent on the same day by first-class mail and in
electronic format reasonably acceptable to the Master Servicer, the Rating
Agencies and the Trustee and consistent with Accepted Special Servicing
Practices) not later than the fourth (4th) Business Day immediately preceding
each Payment Date, a copy of a Specially Serviced Mortgage Loan and REO Property
status report in a form agreed to by the Master Servicer and the Trustee (the
"Specially Serviced Mortgage Loan Status Report"), with respect to each
Specially Serviced Mortgage Loan and REO Mortgage Loan, respectively. In
addition, upon the occurrence of a Collateral Value Adjustment Event or
Liquidation Event from which a Collateral Value Adjustment, Realized Loss or
Collateral Value Adjustment Reduction Amount has resulted, the Special Servicer
shall prepare, or cause to be prepared, and deliver to the Master Servicer, the
Trustee and each Rating Agency, via facsimile (with a hard copy sent on the same
day by first-class mail or in electronic format reasonably acceptable to the
Master Servicer and consistent with Accepted Special Servicing Practices) not
later than the fourth (4th) Business Day immediately preceding each Payment
Date, an Officers' Bond setting forth (i) the event which gave rise to such
Collateral Value Adjustment or Realized Loss and (ii) the amount of such
Collateral Value Adjustment, Realized Loss or Collateral Value Adjustment
Reduction Amount.
(b) On or prior to the fifteenth day of each calendar month the Special
Servicer shall validate and deliver to the Master Servicer a copy of the bank
statement for the prior calendar month related to each REO Account and an REO
Account reconciliation report in the form mutually agreed to by the Master
Servicer and Trustee showing for the period from the day after the second
preceding Remittance Date through the immediately preceding Remittance Date (or
since the related Servicing Transfer Date, in the case of the first of such
reports), the aggregate of deposits into and withdrawals from such funds or
accounts in accordance with this Agreement.
(c) Upon prior request of a Rating Agency or written request of the Master
Servicer, the Trustee, or the Issuer, the Special Servicer shall prepare such
other reasonable reports as may be requested in writing thereby. The Special
Servicer shall be entitled to charge a reasonable fee reflecting the internal
and external costs to the Special Servicer of preparing such other reports
(except that no charges will be assessed for costs of such reports requested by
a Rating Agency) and such fee shall be paid by the Master Servicer to the
Special Servicer as a Servicing Advance pursuant to this Agreement.
SECTION 6.09 Environmental Considerations.
(a) The Special Servicer shall not obtain title for the Issuer to a
Mortgaged Property as a result or in lieu of foreclosure or otherwise, nor shall
otherwise acquire possession of, or take other action with respect to, any
Mortgaged Property, if, as a result of any such action, the Issuer, the Trustee,
the Master Servicer, the Special Servicer or the Bondholders 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 applicable comparable federal, state or local law, or a
"discharger" or "responsible party" thereunder, unless the Special Servicer has
also previously determined, in accordance with Accepted Special Servicing
Practices, based on a "Phase I", and, if applicable, a "Phase II" environmental
site assessment report prepared by a Person who regularly conducts environmental
audits as determined by such Special Servicer in a manner consistent with
Accepted Special Servicing Practices, that:
(i) such Mortgaged Property is in compliance with applicable Environmental
Laws or, if not, that taking such actions as are necessary to bring
the Mortgaged Property in compliance therewith is reasonably likely to
produce a greater recovery on a net present value basis, after taking
into account any risks associated therewith, than not taking such
actions; and
(ii) there are no circumstances present on such Mortgaged Property relating
to the use, management, storage or disposal of any Hazardous Materials
for which investigation, testing, monitoring, containment, clean-up or
remediation could be required under any Environmental Law, or that, if
any such Hazardous Materials are present for which such action could
be required, taking such actions with respect to the affected
Mortgaged Property is reasonably likely to produce a greater recovery
on a net present value basis, after taking into account any risks
associated therewith, than not taking such actions; and
if the Special Servicer has so determined based on satisfaction of the criteria
in clauses (i) and (ii) above that it would be in the best economic interest of
the Bondholders to take any such actions, the Special Servicer has notified the
Trustee and the Master Servicer in writing of such proposed action. The Special
Servicer shall provide a copy of the report described in the preceding sentence
to the Trustee, the Master Servicer and the Directing Bondholder. If within ten
(10) Business Days of receiving such recommendation, the Directing Bondholder
does not disapprove such recommendation in writing the Special Servicer shall
implement the recommended action. If the Directing Bondholder disapproves such
recommendation, the Special Servicer shall revise such recommendation and
deliver to the Trustee, the Directing Bondholder and the Master Servicer a new
recommendation as soon as practicable. The Special Servicer shall revise such
recommendation as described above in this Section 6.09(a) until the Directing
Bondholder shall fail to disapprove such revised recommendation in writing
within ten (10) Business Days of receiving such revised recommendation.
Notwithstanding the foregoing, the Special Servicer (i) may, following the
occurrence of an extraordinary event with respect to the related Mortgaged
Property, take any action it has recommended before the expiration of a ten (10)
Business Day period if the Special Servicer has reasonably determined that
failure to take such action would materially and adversely affect the interest
of the Bondholders and it has made a reasonable effort to contact the Directing
Bondholder and (ii) in any case, shall determine whether such disapproval is not
in the best interest of all the Bondholders pursuant to Accepted Special
Servicing Practices. Upon making such determination, the Special Servicer shall
either implement its recommendations or notify the Trustee of such rejection and
deliver to the Trustee a proposed notice to Bondholders, which shall include the
Special Servicer's recommendation, and the Trustee shall send such notice to all
Bondholders (or, to the extent known to the Trustee, Bond Owners). If the
majority of such Bondholders (including Bond Owners), as determined by Bond
Balance, fail within five (5) days of the Trustee's sending such notice to
reject such recommendation, the Special Servicer shall implement the same. If
such recommendation is rejected by the Bondholders, the Special Servicer shall
not take any action so recommended and shall prepare a new recommendation. The
cost of preparation of any environmental assessment and the cost of any
compliance, containment, clean-up or remediation shall be deemed to be a
Property Protection Expense paid by the Master Servicer as a Servicing Advance.
(b) If the Special Servicer determines, pursuant to subsection (a) above,
that taking such actions as are necessary to bring any such Mortgaged Property
into compliance with applicable Environmental Laws, or taking such actions with
respect to the containment, clean-up, removal or remediation of Hazardous
Materials affecting any such Mortgaged Property, is not reasonably likely to
produce a greater recovery on a net present value basis, after taking into
account any risks associated therewith, than not taking such actions, the
Special Servicer shall notify the Directing Bondholders, Trustee and the Master
Servicer of such determination and recommend such action as it deems in good
faith to be in the best economic interests of the Bondholders. If within ten
(10) Business Days of receiving such recommendation, the Directing Bondholder
does not disapprove such recommendation in writing the Special Servicer shall
implement the recommended action. If the Directing Bondholder disapproves such
recommendation, the Special Servicer will revise such recommendation and deliver
to the Trustee, the Directing Bondholder and the Master Servicer a new
recommendation as soon as practicable. The Special Servicer shall revise such
recommendation as described above in this Section 6.09(b) until the Directing
Bondholder shall fail to disapprove such revised recommendation in writing
within ten (10) Business Days of receiving such revised recommendation.
Notwithstanding the foregoing, the Special Servicer (i) may, following the
occurrence of an extraordinary event with respect to the related Mortgaged
Property, take any action it has recommended before the expiration of a ten (10)
Business Day period if the Special Servicer has reasonably determined that
failure to take such action would materially and adversely affect the interest
of the Bondholders and it has made a reasonable effort to contact the Directing
Bondholder and (ii) in any case, shall determine whether such disapproval is not
in the best interest of all the Bondholders pursuant to Accepted Special
Servicing Practices. Upon making such determination, the Special Servicer shall
either implement its recommendations or notify the Trustee of such rejection and
deliver to the Trustee a proposed notice to Bondholders, which shall include the
Special Servicer's recommendation, and the Trustee shall send such notice to all
Bondholders (or, to the extent known to the Trustee, Bond Owners). If the
majority of such Bondholders (including Bond Owners), as determined by Bond
Balance, fail within five (5) days of the Trustee's sending such notice to
reject such recommendation, the Special Servicer shall implement the same. If
such recommendation is rejected by the Bondholders, the Special Servicer shall
not take any action so recommended.
(c) Notwithstanding the foregoing, the Special Servicer shall not take any
action pursuant to this Section 6.09 except in connection with the
implementation of an Asset Strategy Report pursuant to Section 6.03(c).
SECTION 6.10 Restoration of Specially Serviced Mortgage Loans.
(a) Upon determining with respect to a Specially Serviced Mortgage Loan
that (i) three consecutive Monthly Payments on a Specially Serviced Mortgage
Loan have been made in accordance with the terms of the related Mortgage Note
(taking into account any grace periods contained therein), (ii) such Mortgage
Loan is current as to payments of principal and interest and (iii) no Servicing
Transfer Event is continuing, the Special Servicer shall immediately give
written notice thereof to the Master Servicer and the Trustee.
(b) Unless the Master Servicer and the Special Servicer with respect to a
Mortgage Loan are the same Person, not later than two (2) Business Days after
notice has been given pursuant to subsection (a) above, the Special Servicer
shall send a letter by first class mail, with a copy to the Master Servicer,
notifying the related Mortgagor that such Mortgage Loan has ceased being a
Specially Serviced Mortgage Loan and instructing such Mortgagor to direct all
future notices and communications to the Master Servicer.
(c) In the event that a Specially Serviced Mortgage Loan ceases to be such
pursuant to this Section 6.10, not later than five (5) Business Days after
notice has been given in (a) above, the Special Servicer shall use its best
efforts to provide the Master Servicer with copies of all information, documents
and records (including records stored electronically on computer tapes, magnetic
disks and the like) in its possession relating to such Mortgage Loan. Upon
receipt of such notice and all information, documents and records by the Master
Servicer pursuant to this Section 6.10 hereof, such Mortgage Loan shall cease to
be a Specially Serviced Mortgage Loan, the Special Servicer's obligation to
service such Mortgage Loan shall terminate, and all duties and obligations of
the Master Servicer with respect to such Mortgage Loan to the extent set forth
herein previously undertaken by the Special Servicer shall be resumed by the
Master Servicer.
SECTION 6.11 Removal of Special Servicer.
The Special Servicer may be removed without cause at any time by the
Holders of a majority of the Voting Rights in the fewest number of classes of
Bonds representing the most subordinate Class of Bonds that equal at least a
___% interest therein (the "Controlling Bondholder"). Such determination shall
be evidenced by written notice to the Trustee and each Servicer from the
Controlling Bondholders. The Special Servicer shall not be removed until a
successor shall have been appointed and shall be in the position to assume such
obligations hereunder. The Special Servicer shall cooperate in good faith with
the successor Special Servicer to minimize the number and severity of
disruptions to the servicing of the Specially Serviced Mortgage Loans as a
result of such removal. No successor Special Servicer shall be appointed until
the Trustee receives written confirmation from each of the Rating Agencies that
such appointment will not result in a withdrawal, downgrade or qualification of
the then current rating on the Bonds.
SECTION 6.12 Special Servicer Compensation.
Each Special Servicer shall be entitled to reasonable compensation for
services rendered by it hereunder on each Remittance Date from amounts in the
Collection Account in an amount (the "Special Servicing Fee") equal to
one-twelfth of the product of (a) ____% per annum calculated on the basis of
twelve 30-day months and a 360-day year and (b) the Stated Principal Balance of
each Specially Serviced Mortgage Loan or REO Mortgage Loan as of the Due Date in
the preceding calendar month. The Special Servicer will also be entitled to
receive with respect to any Specially Serviced Mortgage Loan or REO Property
that is sold or transferred or otherwise liquidated, in addition to the Special
Servicing Fee, a disposition fee (the "Disposition Fee") equal to ____% of the
net proceeds of the sale or liquidation of any Specially Serviced Mortgage Loan
or REO Property. The Special Servicer will also be entitled to retain as
additional servicing compensation (i) all investment income earned on amounts on
deposit in any REO Account, and (ii) all amounts collected with respect to the
Specially Serviced Mortgage Loans in the nature of late payment charges, late
fees, assumption fees, modification fees, extension fees or similar items (other
than default interest).
SECTION 6.13 Collateral Value Adjustments.
(a) Within 30 days of a Required Appraisal Date for any Mortgage Loan, the
Special Servicer shall obtain an appraisal for the related Mortgaged Property
from an independent MAI appraiser at the expense of the Issuer (except if an
appraisal has been conducted within the 12 month period preceding such event).
(b) Until such time as the related Collateral Value Adjustment is reduced
to zero, within 30 days of each anniversary of a Required Appraisal date for any
Mortgage Loan, the Special Servicer shall order an update of the prior appraisal
for the related Mortgaged Property (the cost of which will be a Servicing
Advance of the Special servicer).
(c) The Special Servicer shall determine and report to the Trustee and the
Master Servicer any appraisal value obtained pursuant to clause (a) or (b) above
and will adjust the amount of the Collateral Value Adjustment in accordance
therewith.
ARTICLE VII
OBLIGATIONS OF THE INDENTURE TRUSTEE; REPORTS
SECTION 7.01 Statements to Bondholders.
(a) On each Payment Date, based on and to the extent of information
provided by the Servicer, the Trustee shall furnish to each Bondholder and each
Bond Owner which shall have certified to the Trustee that it is a Bond Owner, to
the Issuer, the Servicer, and to each Rating Agency the following reports
setting forth certain information with respect to the Mortgage Loans and the
Bonds.
(1) A statement setting forth the following: (i) the amount of
distributions, if any, made on such Payment Date to the holders of each Class of
Bonds applied to reduce the respective Class Balances thereof, (ii) with respect
to each Class of Bonds, the amount of distributions allocable to interest
accrued at the respective Bond Interest Rates and the amount, if any, by which
such distribution was reduced by Prepayment Interest Shortfalls, Realized Losses
of interest, other interest shortfalls or accruals on outstanding Collateral
Value Adjustments, (iii) the number of outstanding Mortgage Loans and the
aggregate Stated Principal Balance of the Mortgage Loans at the close of
business on the last day of the related Remittance Period; (iv) the number and
aggregate Stated Principal Balance of Mortgage Loans (a) delinquent one month,
(b) delinquent two months, (c) delinquent three or more months, or (d) as to
which foreclosure proceedings have commenced; (v) with respect to any REO
Property included in the Trust Estate, details pertaining to each individual REO
Property including the loan number of the related REO Mortgage Loan, the unpaid
principal balance of the related REO Mortgage Loan (and all REO Mortgage Loans
in the aggregate), the date that such Mortgaged Property became an REO Property,
the book value of such REO Property (which will equal the unpaid principal
balance of such Mortgage Loan at the time of foreclosure) and any net income
received on such REO Property during the related Remittance Period; (vi) with
respect to any REO Property sold or otherwise disposed of during the related
Remittance Period, the amount of sale proceeds and other amounts, if any,
received in respect of such REO Property during the related Remittance Period;
(vii) as to any Mortgage Loan repurchased by the Issuer or otherwise liquidated
during the related Remittance Period, the loan number thereof and the amount of
the proceeds of such repurchase or other liquidation; (viii) the aggregate Class
Balance of each Class of Bonds before and after giving effect to the
distributions made on such Payment Date, separately identifying any reduction in
the class Balance of each such Class due to Realized Losses; (ix) the aggregate
amount of unscheduled principal collections made during the related Remittance
Period and the cumulative amount of such collections including such Remittance
Period, (x) the Bond Interest Rate applicable to each Class of Bonds for such
Payment Date, (xi) the aggregate amount of servicing compensation retained by or
paid to each Servicer during the related Remittance Period; (xii) the amount of
Realized Losses, shortfalls, and/or expenses, if any, incurred with respect to
the Mortgage Loans during the related Remittance Period; (xiii) the aggregate
amount of P&I Advances and other advances outstanding that have been made by
each of the Servicers or the Trustee, (xiv) the amount of any Collateral Value
Adjustments effected during the related Remittance Period, and the total of
Collateral Value Adjustments as of such Payment Date on a loan-by-loan basis,
and (xv) the amount of Prepayment Interest Excess and an accounting as to the
manner in which the same was allocated pursuant to this Agreement. In the case
of information pursuant to subclauses (i), (ii) and (xi) above, the amounts
shall be expressed in the aggregate for all Bonds and in amounts allocable per
$1,000 of Bond denomination.
(2) A report containing information regarding the Mortgage Loans as of the
end of the related Remittance Period, which report shall contain substantially
the categories of information regarding the Mortgage Loans set forth in the
Prospectus Supplement prepared in connection with the initial offering of the
Bonds in the tables under the caption "Description of the Mortgage Pool --
Certain Characteristics of the Mortgage Loans" (calculated where applicable on
the basis of the most recent relevant information provided by the Mortgagors to
the Servicers and by the Servicers to the Trustee) and such information shall be
presented in a tabular format substantially similar to the format utilized in
the Prospectus Supplement under such caption.
(3) Other reports containing loan-by-loan information relating to Mortgage
Loans that (i) have not made the most recent monthly payment then due, (ii) have
been classified as Specially Serviced Mortgage Loans or (iii) that have
experienced a Realized Loss.
The Trustee currently makes such reports available to the designated
parties by mail or through an automated facsimile system that can be accessed by
dialing __________ from any touch-tone telephone.
In addition, the Trustee shall make available Mortgage Loan information as
presented in the CSSA-100 format (or such other industry standard that may be in
effect from time to time) through electronic transmission by no later than the
Payment Date in __________ to each Bondholder, the Issuer, the Servicers, each
Rating Agency (and any other parties reasonably designated by the Issuer or a
Bondholder), an electronic file that includes the following information on a
loan-by-loan basis: loan number, location, Stated Principal Balance, Mortgage
Interest Rate, paid-through date, maturity date, scheduled interest due,
scheduled principal due, unscheduled principal collections, loan status and
other related information.
Upon request of any Bondholder (or any Bond Owner, if applicable, which
shall have provided the Trustee with evidence satisfactory to the Trustee of its
interest in a certificate pursuant to Section 11.04) or any Rating Agency, the
Trustee shall mail, without charge, to the address specified in such request, a
copy of the most current Asset Strategy Report for any Specially Serviced
Mortgage Loan or REO Property. In addition, upon receipt of a written request of
any Bondholder (or any Bond Owner, if applicable, which shall have provided the
Trustee with evidence satisfactory to the Trustee of its interest in a
certificate pursuant to Section 11.04) for a copy of any report required to be
prepared by the Master Servicer herein, the Trustee shall forward such written
request to the Master Servicer. To the extent such report is available to the
Master Servicer, the Master Servicer shall deliver a copy thereof to the Trustee
for delivery to the requesting Bondholder (or Bond Owner) at the address
specified in such request. The request, reproduction and delivery of such
report, shall be at the expense of the requesting Bondholder (or Bond Owner).
(b) The Trustee covenants to furnish or cause to be furnished, promptly
upon the written request of any Bondholder (or a Bond Owner which shall have
certified to the Trustee that it is a Bond Owner of any such Class pursuant to
Section 11.04) of a Class E or Class F Bond reasonably current Rule 144A
Information (as defined below) to such Bondholder or to a prospective transferee
of such a Bond (or interests in such Bond) designated by such Bondholder, as the
case may be, in connection with the resale of such Bond or such interests by
such Bondholder pursuant to Rule 144A. "Rule 144A Information" shall mean the
information specified in Rule 144A(d)(4)(i) and (ii) under the 1933 Act. The
Trustee shall advise the Master Servicer of any request by a Bondholder and
shall consult with the Master Servicer as to the information to be supplied.
Based upon such consultation and to the extent the Trustee is not in possession
of reasonably current Rule 144A Information on the date of any such request, the
Master Servicer shall, upon request from the Trustee, promptly provide the
Trustee with reasonably current Rule 144A Information to the extent reasonably
available. The Trustee and the Master Servicer may place its disclaimer on any
such Rule 144A Information to the extent it is not the source of such
information.
(c) Neither Servicer shall be responsible for the accuracy or completeness
of any information supplied to it by a Mortgagor or third party for inclusion in
any report or information furnished or provided by the Master Servicer, the
Special Servicer or the Trustee hereunder to the extent such information has
been collected and received in accordance with Accepted Servicing Practices or
Accepted Special Servicing Practices, as applicable.
In addition to the other reports and information made available and
distributed to the Issuer, the Trustee or the Bondholders pursuant to other
provisions of this Agreement, each Servicer shall, in accordance with such
reasonable rules and procedures as it may adopt (except with respect to the
Trustee, which may include the requirement that an agreement governing the
availability, use and disclosure of such information, and which may provide
indemnification to such Servicer for any liability or damage that may arise
therefrom, be executed to the extent such Servicer deems such action to be
necessary or appropriate), also make available any information relating to the
Mortgage Loans, the Mortgaged Properties or the Mortgagors for review by the
Issuer, the Trustee, the Bondholders, each Rating Agency and any other Persons
to whom such Servicer believes such disclosure is appropriate, in each case
except to the extent doing so is prohibited by applicable law or by the Mortgage
Loan Documents.
Copies of any and all of the foregoing items shall be available from the
Master Servicer, the Special Servicer or the Trustee, as applicable, upon
request (subject to the exception in the preceding sentence). The Master
Servicer, the Special Servicer and the Trustee shall be permitted to require
payment (other than from a Rating Agency) of a sum sufficient to cover the
reasonable costs and expenses incurred by it in providing copies of or access to
any information requested in accordance with the previous sentence.
(d) The Trustee shall mail or otherwise provide to any Person requesting a
copy of the reports delivered to Bondholders pursuant to the first paragraph of
clause (a) above, a copy of such reports. The Trustee shall be entitled to
charge such Person a nominal fee to cover the cost of such mailing.
(e) The Trustee is hereby authorized to furnish, to Bondholders and/or to
the public any other information (such other information, collectively,
"Additional Information") with respect to the Mortgage Loans, any Mortgaged
Property or the Issuer as may be provided to it by the Issuer, the Master
Servicer or Special Servicer or gathered by it in any investigation or other
manner from time to time, provided that (A) any such Additional Information
shall only be furnished with the consent or at the request of the Issuer, (B)
the Trustee shall be entitled to indicate the source of all information
furnished by it and the Trustee may affix thereto any disclaimer it deems
appropriate in its sole discretion (including any warnings as to the
confidential nature and/or the uses of such information as it may, in its sole
discretion, determine appropriate), (C) the Trustee shall be entitled (but not
obligated) to require payment from each recipient of a reasonable fee for, and
its out-of-pocket expenses incurred in connection with, the collection assembly,
reproduction or delivery of any such Additional Information and (D) the Trustee
shall be entitled to distribute or make available such information in accordance
with such reasonable rules and procedures as it may deem necessary or
appropriate (which may include the requirement that an agreement that provides
such information shall be used solely for purposes of evaluating the investment
characteristics or valuation of the Bonds be executed by the recipient). Nothing
herein shall be construed to impose upon the Trustee any obligation or duty to
furnish or distribute any Additional Information to any Person in any instance,
and the Trustee shall neither have any liability for furnishing nor for
refraining from furnishing Additional Information in any instance. The Trustee
shall be entitled (but not required) to require that any consent, direction or
request given to it pursuant to this clause (e) be made in writing.
Furthermore, the Trustee will supply to any Bondholder so requesting by
telephone the Bond Interest Rates on any Class of Bonds for the current and the
immediately preceding Interest Accrual Periods.
SECTION 7.02 Distribution of Reports to the Trustee and the Issuer;
Advances.
On or prior to each Remittance Date, the Master Servicer shall furnish a
written statement (and an electronic data file reasonably satisfactory to the
Master Servicer and the Trustee) setting forth (i) the amounts available for
deposit into the Bond Account and (ii) the amounts of any P&I Advances required
to be made by the Master Servicer in connection with the related Payment Date.
The determination by the Master Servicer of such amounts shall, in the absence
of obvious error, be presumptively deemed to be correct for all purposes
hereunder and the Trustee shall be protected in relying upon the same without
any independent check or verification. To the extent such statement indicates
one or more delinquencies in connection with which a related P&I Advance was not
made by the Master Servicer, the Trustee shall commence an evaluation of whether
a P&I Advance by the Trustee may be required and whether it would be a
Nonrecoverable Advance; provided, however, that notwithstanding such
examination, the Trustee shall have no responsibility for reviewing or
confirming any decision made with respect to a P&I Advance by a Servicer. The
Master Servicer shall promptly upon request provide to the Trustee such
information as the Master Servicer may have to enable the Trustee to make such
determination.
In the event that the Master Servicer determines as of the Business Day
preceding the Remittance Date that it will be unable to deposit in the Bond
Account an amount equal to the P&I Advance required to be made for the
immediately succeeding Payment Date, it shall give written notice to the Trustee
of its inability to advance (such written notice may be given by telecopy), not
later than 3:00 P.M., New York City time, on such Business Day, specifying the
portion of such amount that it will be unable to deposit. Not later than 4:00
P.M., New York City time, on such Remittance Date the Trustee shall, unless by
3:00 P.M., New York City time, on such day the Trustee shall have been notified
in writing (by telecopy) that the Master Servicer shall have directly or
indirectly deposited in the Bond Account such portion of the amount of such P&I
Advance as to which the Master Servicer shall have given notice pursuant to the
preceding sentence deposit in the Bond Account on such Remittance Date an amount
equal to such P&I Advance to the extent it determines it is not a Nonrecoverable
Advance (but not Servicing Advances) for such Payment Date; provided, however,
that if the Trustee is prohibited by law or regulation from obligating itself to
make such Advances, then the Trustee shall not be obligated to make such
Advances.
Notwithstanding anything herein to the contrary, the Trustee not shall be
required to make a Nonrecoverable Advance, and shall not be required to make a
P&I Advance with respect to a Balloon Payment. The Trustee shall be entitled to
interest on any P&I Advance made with respect to a Mortgage Loan. Such interest
shall accrue at the Advance Rate from the date on which such Advance was made to
but not including any Business Day on which the Trustee is reimbursed for such
P&I Advance pursuant to this Agreement. Notwithstanding any other provisions
contained herein to the contrary, the Trustee shall be reimbursed for any P&I
Advances, together with interest thereon at the Advance rate, prior to the
Servicers.
The Trustee shall deposit all funds it receives pursuant to this Section
7.02 into the Bond Account.
SECTION 7.03 Allocations of Realized Losses and Collateral Value
Adjustments.
On or prior to the fourth Business Day immediately preceding the applicable
Payment Date, the Master Servicer shall determine and communicate to the Trustee
the total amount of Realized Losses and Collateral Value Adjustment, if any,
that resulted during the related Remittance Period. As soon as practicable
following the occurrence of a Collateral Value Adjustment Event with respect to
any Mortgage Loan (taking into account the time period necessary for the Master
Servicer to obtain the Independent MAI appraisal for such purpose), the Master
Servicer shall make a Collateral Value Adjustment determination with respect to
such Mortgage Loan. The amount of each Realized Loss or Collateral Value
Adjustment shall be evidenced by an Officers' Bond. All Realized Losses and
Collateral Value Adjustments shall be allocated by the Trustee as follows in
reduction of the related Class Balance: first, to the Class F Bonds until the
Class Balance thereof has been reduced to zero; second, to the Class E Bonds
until the Class Balance thereof has been reduced to zero; third, to the Class D
Bonds until the Class Balance thereof has been reduced to zero; fourth, to the
Class C Bonds until the Class Balance thereof has been reduced to zero; fifth,
to the Class B Bonds until the Class Balance thereof has been reduced to zero,
and the remainder of such Realized Losses and Collateral Value Adjustments to
the Class A-1 and Class A-2 Bonds, pro rata, until their respective Class
Balances have been reduced to zero. Amounts allocated to reduce the related
Class Balance shall also reduce such Class' Voting Rights in proportion to the
other Classes of Bonds.
ARTICLE VIII
THE ISSUER
SECTION 8.01 Liability of the Issuer.
The Issuer shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Issuer herein.
SECTION 8.02 Merger, Consolidation or Conversion of the Issuer.
Subject to the following paragraph, the Issuer will keep in full effect its
existence, rights and franchises as a corporation under the laws of the
jurisdiction of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Bonds or any of the Mortgage Loans and to
perform its respective duties under this Agreement.
The Issuer 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 the Issuer, shall be
a party, or any Person succeeding to the business of the Issuer, shall be the
successor of the Issuer hereunder, 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 8.03 Limitation on Liability of the Issuer and Others.
Neither the Issuer nor any of its directors, officers, employees or agents
shall be under any liability to the Issuer or the Bondholders 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 Issuer 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 misfeasance, bad faith or negligence in the
performance of duties. The Issuer and any director, officer, employee or agent
thereof may rely in good faith on any document of any kind which, prima facie,
is properly executed and submitted by any Person respecting any matters arising
hereunder. The Issuer shall not 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 involve it in any
expense or liability.
ARTICLE IX
DEFAULT
SECTION 9.01 Events of Default.
"Event of Default", wherever used herein, means with respect to any
Servicer any one of the following events:
(i) with respect to the Master Servicer, failure to remit when due to the
Trustee for deposit into the Bond Account any amount (other than a P&I
Advance) required to be remitted under the terms of this Agreement;
with respect to the Special Servicer, failure to advance or remit to
the Master Servicer or the Master Servicer, as required hereunder, any
amount required to be advanced or remitted under the terms of this
Agreement within one Business Day of the date required pursuant to the
terms of this Agreement; or
(ii) any failure on the part of such Servicer duly to observe or perform in
any respect any other of the covenants or agreements on the part of
such Servicer contained in this Agreement which materially and
adversely affects the interests of the Bondholders and 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 such Servicer by the Issuer or the Trustee, or to such
Servicer (with a copy to the Issuer, the Trustee, and the other
Servicer) by the Holders of Bonds entitled to at least 25% of the
Voting Rights of any Class affected thereby; or
(iii) any breach of the representations and warranties contained in Section
2.03(b) which materially and adversely affects the interests of the
Bondholders and which continues unremedied for a period of 30 days
after the date on which notice of such breach, requiring the same to
be remedied, shall have been given to such Servicer by the Issuer or
the Trustee or to such Servicer (with a copy to the Issuer, the
Trustee and the other Servicer) by the Holders of Bonds entitled to at
least 25% of the Voting Rights of any Class affected thereby; 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 or
appointing a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against such Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of
60 days; or
(v) such Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings of, or
relating to, such Servicer or of, or relating to, all or substantially
all of the property of Servicer; or
(vi) such Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of, or
commence a voluntary case under, any applicable insolvency or
reorganization statute, make assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vii) any notice from each Rating Agency with respect to such Servicer that
if such Servicer were to remain in such capacity, a qualification,
withdrawal or downgrade of any rating on the Bonds would result; or
(viii) any failure by the Master Servicer to make a P&I Advance required
pursuant to Sections 4.05 and 7.02 hereof;
then, and in each and every such case, so long as an Event of Default shall not
have been remedied, the Trustee may, and at the written direction of the Holders
of Bonds entitled to, at least 25% of all of the Voting Rights, the Trustee
shall, by notice in writing to such Servicer, with a copy of such notice to the
Issuer, subject to Section 13.12, terminate all of the rights and obligations of
such Servicer as such Servicer under this Agreement and in and to the Mortgage
Loans and the proceeds thereof. From and after the receipt by such Servicer of
such written notice, all authority and power of the such Servicer under this
Agreement, shall pass to and be vested in the Trustee pursuant to and under this
Section, and, without limitation, the Trustee is hereby authorized and empowered
to execute and deliver, on behalf of and at the expense of the such Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Each Servicer agrees promptly (and in any event no later than ten
Business Days subsequent to such notice) to provide the Trustee or another
successor Servicer designated by the Trustee with all documents and records
requested by it to enable it to assume such Servicer's functions hereunder, and
to cooperate with the Trustee in effecting the termination of such Servicer's
responsibilities and rights hereunder. Any cost or expenses in connection with
any actions to be taken by a Servicer that is being terminated pursuant to this
Section 9.01 shall be borne by the Servicer that is being terminated and to the
extent not paid by the Servicer that is being terminated, such expense shall be
borne by the Issuer and shall not be an expense of any successor Servicer.
Subject to Section 11.01(c)(iv), for purposes of this Section 9.01, the Trustee
shall not be deemed to have knowledge of an Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof, or unless
notice of any event which is in fact such an Event of Default is received by the
Trustee and such notice references the Bonds, the Issuer or this Agreement.
SECTION 9.02 Trustee to Act; Appointment of Successor.
On and after the time a Servicer receives a notice of termination pursuant
to Section 9.01, the Trustee shall be the successor in all respects to such
Servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto and arising thereafter placed on such Servicer by the terms and
provisions hereof provided, further, that any failure to perform such duties or
responsibilities caused by such Servicer's failure to provide information or
monies required by this Agreement shall not be considered a default by the
Trustee hereunder. The Trustee shall not be liable for any of the
representations and warranties of such Servicer or for any losses incurred by
such Servicer hereunder nor shall the Trustee be required to purchase any
Mortgage Loan hereunder. As compensation therefor, the Trustee shall be entitled
to the servicing fees and all funds relating to the Mortgage Loans which such
Servicer would have been entitled to if such Servicer had continued to act
hereunder. Notwithstanding the above, the Trustee may, if it shall be unwilling
to so act, or shall, if it is unable to so act or if the Holders of Bonds
entitled to at least more than 25% of all of the Voting Rights so request in
writing to the Trustee, promptly appoint, or petition a court of competent
jurisdiction for the appointment of, a loan servicing institution with (a) a net
worth at the time of such appointment of at least $15,000,000 and (b) whose
appointment will not result in a downgrade, withdrawal or qualification of the
rating on any Class of Bonds by any Rating Agency as evidenced in writing, to
act as a successor to such Servicer pursuant to Section 13.12 of this Agreement.
Pending appointment of a successor to such Servicer hereunder, the Trustee shall
act in such capacity as hereinabove provided. The Trustee and any such successor
may agree upon the servicing compensation to be paid, which in no event may be
greater than the compensation payable to the Master Servicer under this
Agreement.
SECTION 9.03 Notification to Bondholders.
(a) Upon any such termination pursuant to Section 9.01 above, any
appointment of a successor to the Master Servicer pursuant to Section 9.02, or
any appointment of a successor Special Servicer pursuant to Section 13.12, the
Trustee shall give prompt written notice thereof to Bondholders and each Rating
Agency at their respective addresses appearing in the Bond Register.
(b) Not later than the later of 60 days after the occurrence of any event
which constitutes or, with notice or lapse of time or both, would constitute an
Event of Default and not more than five (5) days after a Responsible Officer
becomes aware of the occurrence of such event, the Trustee shall transmit by
mail to the Issuer and all Bondholders notice of such occurrence, unless such
default shall have been cured or waived.
SECTION 9.04 Waiver of Events of Default.
The Holders representing at least 66-2/3% of the Voting Rights exclusive of
any Bonds owned by either the Servicer or an affiliate thereof evidenced by all
Classes of Bonds affected by any Event of Default hereunder may waive such Event
of Default; provided, however, that an Event of Default under clause (i) or
clause (viii) of Section 9.01 may be waived only by all of the Bondholders. Upon
any such waiver of an Event of Default, such Event of Default shall cease to
exist and shall be deemed to have been remedied for every purpose hereunder,
except that no Event of Default under Section 9.01(viii) shall be deemed so
waived or cured unless and until the Trustee has been reimbursed in full for all
P&I Advances, together with interest thereon at the Advance Rate, which it may
have made hereunder. The Trustee shall be entitled to reimbursement from the
Issuer for any expenses incurred by the Trustee or successor Servicer in
connection with assuming the duties of a Servicer following the occurrence of an
Event of Default if following the termination of such Servicer pursuant to this
Agreement, the Bondholders elect to waive such Event of Default and reinstate
the terminated Servicer. No such waiver shall extend to any subsequent or other
Event of Default or impair any right consequent thereon except to the extent
expressly so waived. Notwithstanding any other provisions of this Agreement, for
purposes of waiving any Event of Default pursuant to this Section 9.04, Bonds
registered in the name of the Issuer or any Affiliate of the Issuer shall be
entitled to Voting Rights with respect to the matters described above.
SECTION 9.05 Additional Remedies of Trustee Upon Event of Default.
During the continuance of any Event of Default, so long as such Event of
Default shall not have been remedied, the Trustee, in addition to the rights
specified in Sections 9.01 and 9.02, shall have the right, in its own name and
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 Bondholders
(including the institution and prosecution of all judicial, administrative and
other proceedings and the filings of proofs of claim and debt in connection
therewith). Except as otherwise expressly provided in this Agreement, no remedy
provided for by this Agreement shall be exclusive of any other remedy, and each
and every remedy shall be cumulative and in addition to any other remedy, and no
delay or omission to exercise any right or remedy shall impair any such right or
remedy or shall be deemed to be a waiver of any Event of Default.
ARTICLE X
[RESERVED]
ARTICLE XI
MONITORING BONDHOLDER; DIRECTING BONDHOLDER
SECTION 11.01 Monitoring Bondholders and Directing Bondholder.
(a) Each Monitoring Bondholder is hereby deemed to have agreed by virtue of
its purchase of a Bond to provide its name and address to the Trustee and to
notify the Trustee of the transfer of any Bond of a Monitoring Class the
selection of a Directing Bondholder or the resignation or removal thereof. The
Directing Bondholder is hereby deemed to have agreed by virtue of its purchase
of a Bond to notify the Trustee when such Bondholder is appointed Directing
Bondholder and when it is removed or resigns. Notwithstanding any other
provisions contained herein, the Trustee shall be required to give any notice,
direction or information with respect to any Monitoring Bondholder or Directing
Bondholder only to the extent the Trustee received the relevant information, as
set forth in this Section 11.01(a).
(b) Within thirty (30) days of the Delivery Date, the Trustee shall notify
the Monitoring Bondholders that they may select a Directing Bondholder for
purposes of Sections 6.03 and 6.11 of this Agreement. Such notice shall set
forth the process established by the Trustee in order to select a Directing
Bondholder.
(c) A "Monitoring Class" as of any time of determination shall be the
following Class or Classes of Bonds:
(i) if the Class outstanding with the most subordinate Class of Bonds
represents at least __% by Class Balance of all the Bonds, such Class
only;
(ii) otherwise, each Class, in reverse order of seniority, but only to the
extent necessary to represent, in the aggregate, at least __% by Class
Balance of all the Bonds.
(d) Once a Directing Bondholder has been selected pursuant to clause (b)
above, each of the Servicer, the Issuer, the Trustee and each other Bondholder
(or Bond Owner, if applicable) shall be entitled to rely on such selection
unless a majority of the Monitoring Bondholders, by Bond Balance, or such
Directing Bondholder shall have notified the Trustee and each other Monitoring
Bondholder, in writing, of the resignation of such Directing Bondholder or the
selection of a new Directing Bondholder. Upon the resignation of a Directing
Bondholder, the Trustee shall request the Monitoring Bondholders to select a new
Directing Bondholder.
(e) Within two (2) Business Days (or as soon thereafter as practicable if
Monitoring Bonds are held as Book-Entry Bonds) of receiving a request from the
Special Servicer pursuant to Section 6.03(a) the Trustee shall deliver to the
Special Servicer and the Master Servicer a list of each Monitoring Bondholder
and the Directing Bondholder including names and addresses. In addition to the
foregoing, within two (2) Business Days of receiving notice of the selection of
a new Directing Bondholder or the existence of a new Monitoring Bondholder, the
Trustee shall notify the Special Servicer.
(f) If at any time a Book-Entry Bond belongs to a Monitoring Class, the
Trustee shall notify the related Bondholders (through the Depository, unless the
Trustee shall have been previously provided with the name and address of the
related Bond Owner) of such event and shall request that it be informed of any
change in the identity of the related Bond Owner from time to time.
(g) Until it receives notice to the contrary each of the Servicers and the
Trustee shall be entitled to rely on the most recent notification with respect
to the identity of the Monitoring Bondholders and the Directing Bondholder.
SECTION 11.02 Powers of Attorney.
The Trustee shall execute and deliver any powers of attorney prepared and
delivered to it by each Servicer pursuant to Sections 4.01(b) and 6.03(b). Each
Servicer hereby agrees to indemnify and hold harmless the Trustee for all
liabilities, costs and expenses incurred by the Trustee in connection with the
negligent or willful misuse of any such power of attorney by such Servicer.
ARTICLE XII
TERMINATION
SECTION 12.01 Termination Upon Liquidation of All Mortgage Loans
(a) The respective obligations and responsibilities under this Agreement of
the Issuer, the Master Servicer, the Special Servicer and the Trustee shall
terminate upon the earlier of (i) payment to the Trustee of all amounts held by
or on behalf of the Master Servicer or Special Servicer and required hereunder
to be so paid on the first Master Servicer Remittance Date following the end of
the Collection Period in which occurs the final payment or other liquidation of
the last Mortgage Loan or REO Property subject hereto and (ii) satisfaction and
discharge of the Indenture and receipt by each of the Master Servicer and the
Special Servicer of all amounts then payable or reimbursable thereto hereunder.
(b) Subject to the receipt thereby of all amounts then payable or
reimbursable thereto hereunder, each of the Master Servicer and the Special
Servicer acknowledges and agrees that, upon the satisfaction and discharge of
the Indenture as described in clause (ii) above, it shall promptly (and in any
event no later than____ Business Days) following its receipt of notice of such
satisfaction and discharge from the Trustee provide the Issuer with all
documents and records in its possession and shall cooperate with the Issuer or
its designee in effecting the termination of the Master Servicer's or Special
Servicer's, as the case may be, responsibilities and rights with respect to the
Mortgage Loans, including, without limitation, the transfer within_____ Business
Days to the Issuer of all cash amounts which shall at the time be or should have
been credited by the Master Servicer to the Collection Account or any Servicing
Account or by the Special Servicer to the REO Account, the Collection Account or
any Servicing Account or thereafter be received by or on behalf of it with
respect to any Mortgage Loan or REO Property. Any costs or expenses in
connection with any actions to be taken by the Master Servicer or Special
Servicer pursuant to this paragraph shall be borne by the Master Servicer or
Special Servicer, as the case may be.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01 Amendment.
(a) This Agreement may be amended from time to time by the Issuer, the
Master Servicer, the Special Servicer and the Trustee, without the consent of
any of the Bondholders, (i) to cure any ambiguity, (ii) to correct or supplement
any provisions herein which may be inconsistent with any other provisions herein
or (iii) to make any other provisions with respect to matters or questions
arising hereunder which shall not be inconsistent with the provisions hereof,
provided that such action shall not, as evidenced by an Opinion of Counsel
delivered to the Trustee, adversely affect in any material respect the interests
of any Bondholder; provided further, however, that an Opinion of Counsel shall
not be required if each Rating Agency then rating the Bonds shall have confirmed
in writing that immediately following such amendment such Rating Agency will not
qualify, lower or withdraw its rating on the Bonds as a result of such
amendment.
(b) This Agreement may also be amended from time to time by the Issuer, the
Master Servicer, the Special Servicer and the Trustee with the consent of the
Holders of Bonds affected thereby entitled to at least 51% of the Voting Rights
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Bonds; 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
Bond without the consent of the Holder of such Bond, (ii) adversely affect in
any material respect the interests of the Holders of any Class of Bonds in a
manner other than as described in (i) without the consent of the Holders of all
Bonds of such Class, or (iii) reduce the aforesaid percentages of Bonds the
Holders of which are required to consent to any such amendment without the
consent of the Holders of all Bonds then outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 13.01, Bonds registered in the name of the
Issuer, the Master Servicer, the Special Servicer or any Affiliate of the
Issuer, the Master Servicer or the Special Servicer shall be entitled to Voting
Rights with respect to matters described in clauses (i) and (ii) of this
paragraph affecting such Bonds.
(c) Promptly after the execution of any such amendment, the Trustee shall
furnish a statement describing the amendment to each Bondholder and each
Underwriter and a copy of such amendment to each Rating Agency.
(d) It shall not be necessary for the consent of Bondholders under this
Section 13.01 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Bondholders shall be subject to such reasonable regulations
as the Trustee may prescribe.
(e) The Trustee may but shall not be obligated to enter into any amendment
pursuant to this Section that affects its rights, duties and immunities under
this Agreement or otherwise.
(f) The cost of any Opinion of Counsel to be delivered pursuant to Section
13.01(a) or (c) shall be borne by the Person seeking the related amendment.
(g) Prior to the execution of any amendment to this Agreement, the Issuer,
the Master Servicer, the Special Servicer and the Trustee shall be entitled to
receive and rely upon an Opinion of Counsel, at the expense of the party
requesting such amendment, stating that the execution of such amendment is
authorized or permitted by this Agreement.
SECTION 13.02 Recordation of Agreement; Counterparts.
(a) To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Issuer on direction by the Trustee, but
only upon direction accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the
Bondholders; provided, however, that the Trustee shall have no obligation or
responsibility to determine whether any such recordation of this Agreement is
required.
(b) For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, 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 13.04 Governing Law.
This Agreement shall be construed in accordance with the internal 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 13.05 Notices.
Any communications provided for or permitted hereunder shall be in writing
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given if (a) personally delivered, (b) mailed by registered mail, postage
prepaid, return receipt requested, and received by the addressee, (c) sent by
express courier delivery service and received by the addressee, or (d)
transmitted by telex, telecopy or telegraph and confirmed by a writing delivered
by means of (a), (b) or (c), to: (i) in the case of the Issuer, Imperial Credit
Commercial Mortgage Acceptance Corp., Attention: __________, telecopy number:
__________; (ii) in the case of the Master Servicer and Special Servicer,
____________________, _____________________, Attention: __________, telephone
number: __________, telecopy number: __________; (iii) in the case of the
Trustee, ____________________, Attention: __________, telephone number:
__________, telecopy number: __________; (iv) in the case of the Mortgage Loan
Seller, to ____________________, ____________________, Attention: __________,
telecopy number: __________; and (v) in the case of the Rating Agencies, (A)
____________________, ____________________, Attention: ___________, telephone
number: ___________, telecopy number: ____________________, (B)
____________________, ____________________, Attention: __________, telephone
number: __________, telecopy number: __________, and (C) ____________________,
____________________, Attention: __________, telephone number: __________,
telecopy number: __________; or as to each such Person such other address as may
hereafter be furnished by such Person to the parties hereto in writing. Any
communication required or permitted to be delivered to a Bondholder shall be
sent to the address of such Holder as shown in the Bond Register.
SECTION 13.06 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Bonds or the rights of the Holders thereof.
SECTION 13.08 Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by each Servicer, the Trustee and the respective
successors and assigns thereof and shall inure to the benefit of the
Bondholders.
SECTION 13.09 Article and Section Headings.
The article and section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.
SECTION 13.10 Notices and Information to Rating Agencies.
(a) The Trustee shall use its best efforts promptly to provide notice to
the Rating Agencies with respect to each of the following of which it has actual
knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Event of Default;
(iii) the resignation or termination of the Master Servicer or the Special
Servicer;
(iv) the repurchase of Mortgage Loans pursuant to Section 2.04(a);
(v) the final payment to any Class of Bondholders; and
(vi) any change in the location of the Bond Account.
(b) The Master Servicer shall use its best efforts promptly to provide
notice to the Rating Agencies with respect to any determination by the Master
Servicer that an Advance with respect to a Mortgage Loan constitutes (or would,
if made, constitute) a Nonrecoverable Advance under this Agreement.
(c) The Master Servicer shall promptly furnish to the Rating Agencies
copies of the following:
(i) each of its annual statements as to compliance described in Section
3.07,
(ii) each of its annual independent public accountants' servicing reports
described in Section 3.08,
(iii) the most current rent rolls and financial statements available from
time to time with respect to any Mortgaged Property or any Mortgagor,
(iv) each report and statement pursuant to Sections 4.08 and 7.01,
(v) other information the Rating Agencies may reasonably request
consistent with the Master Servicer's servicing duties hereunder, and
(vi) notice of the resignation or termination of the Trustee.
(d) All parties shall provide such information as each Rating Agency may
reasonably require, from time to time, through an electronic medium and format
reasonably acceptable to, and reasonably requested by, each Rating Agency.
SECTION 13.12 Successor to a Servicer.
(a) The termination of any Servicer's responsibilities and duties pursuant
to Section 3.11 or Section 9.01 hereof, the Trustee shall either (i) succeed (as
of the date of such succession) to and assume all of such Servicer's
responsibilities, rights, duties and obligations under this Agreement, or (ii)
appoint a successor that shall succeed (as of the date of such succession) to
all rights and assume all of the responsibilities and duties of such Servicer
under this Agreement. In the event that any Servicer's duties and
responsibilities under this Agreement are terminated pursuant to the
aforementioned Sections, such Servicer shall discharge such duties and
responsibilities during the period from the date it acquires knowledge of such
termination until the effective date thereof (if such dates are not the same)
with the same degree of diligence and prudence that it is obligated to exercise
under this Agreement, and shall take no action whatsoever that might impair or
prejudice the rights or financial condition of its successor, any other
Servicer. The termination of a Servicer's responsibilities and duties under this
Agreement pursuant to the aforementioned Sections shall not become effective
until a successor shall be appointed pursuant to this Section 13.12 (or until
the Trustee succeeds to and assumes all of such Servicer's responsibilities
under this Agreement) and shall in no event relieve such Servicer of the
covenants, representations and warranties made herein and the remedies available
under this Agreement. The provisions of Section 3.10 hereof shall be applicable
to each Servicer, to the extent of claims against the Servicer arising out of
the Servicer's actions or failure to act prior to termination, notwithstanding
any termination of such Servicer's responsibilities and duties under this
Agreement or the termination of this Agreement. A successor Servicer shall not,
by reason of its appointment or assumption of the duties and responsibilities of
another Servicer, assume any of the liabilities of such Servicer.
(b) Any successor appointed as provided herein shall execute, acknowledge
and deliver to the Trustee and each Servicer, an instrument accepting such
appointment, whereupon such successor shall become fully vested with all the
rights, powers, duties, responsibilities and obligations of the Servicer it is
succeeding, with like effect as if originally named as a party to this
Agreement. Any resignation or termination of a Servicer pursuant to Section 3.11
or Section 9.01 hereof shall not affect any rights or claims that any Servicer
may have with respect to or against the Issuer or another Servicer, in any case
arising prior to any such termination or resignation. The appointment of a
successor Servicer shall not be effective until the Trustee shall have received
written confirmation from each Rating Agency that such appointment will not
result in the withdrawal, qualification or downgrade of the rating on any Bond.
(c) Upon its termination or resignation, the terminated or resigning
Servicer shall immediately deliver to the successor the funds in any account
maintained by such Servicer pursuant to this Agreement (net of all unpaid
Servicing Fees payable to it, and, in the case of the Master Servicer,
unreimbursed Advances advanced by it and interest on such Advances at the
Advance Rate), any Mortgage Loan Documents in such Servicer's possession and
related documents and statements held by it hereunder and such Servicer shall
account for all funds. Such Servicer shall execute and deliver such instruments
and do all such other things as may reasonably be required to more fully and
definitely vest and confirm in the successor all such rights, powers, duties,
responsibilities, obligations and liabilities of such Servicer. The successor
shall promptly make arrangements to reimburse such Servicer for amounts such
Servicer actually expended, unreimbursed Advances with interest at the Advance
Rate and amounts owed to such Servicer in respect of unpaid Servicing Fees and
additional servicing compensation pursuant to this Agreement that would
otherwise have been recovered by such Servicer pursuant to this Agreement but
for the appointment of the successor servicer, net of any amounts owed by such
Servicer hereunder.
IN WITNESS WHEREOF, the parties hereto have caused their names to be signed
hereto by their respective officers thereunto duly authorized, in each case as
of the day and year first above written.
ICCMAC TRUST [______], Issuer
By: __________________________,
not in its individual capacity but solely as
Owner Trustee
By: ____________________________
Name: ____________________________
Title: ____________________________
____________________________,
Master Servicer and Special Servicer
By: ____________________________
Name: ____________________________
Title: ____________________________
____________________________,
Trustee
By: ____________________________
Name: ____________________________
Title: ____________________________
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the ____ day of __________, 199__ before me, a notary public in and for
said State, personally appeared ____________________ known to me to be a
__________ of ________________________________, the ______________ that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said __________________, and acknowledged to me that such
_________________ executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
____________________________
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the day of __________, 199__, before me, a notary public in and for said
State, personally appeared ___________ known to me to be ______________________
of _____________________, one of the corporations that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said corporation, and acknowledged to me that such corporation executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
____________________________
Notary Public
[Notarial Seal]
STATE OF )
)ss.:
COUNTY OF )
On the ____ day of __________, 199__, before me, a notary public in and for
said State, personally appeared _____________________________ known to me to be
_______________________ of ___________________, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
____________________________
Notary Public
[Notarial Seal]
EXHIBIT A
MORTGAGE LOAN SCHEDULE
EXHIBIT B
FORM OF REQUEST FOR RELEASE AND
RECEIPT OF DOCUMENTS
To: [Trustee Name and Address]
Re: Colalteralized Mortgage Bonds, Series __________
In connection with the administration of the Mortgage Loans held by you as
the Trustee, we request the release of the (Trustee's Mortgage File/[specify
documents]) for the Mortgage Loan described below, for the reason indicated. The
undersigned agrees to acknowledge receipt of such Mortgage Loan File promptly
upon receipt.
Mortgagor's Name, Address & Zip Code:
Mortgage Loan Number
Reason for Requesting Documents (check one)
_________ 1. Mortgage Loan paid in full. (Servicer hereby certifies that all
amounts received in connection therewith have been credited or
will be escrowed as provided in the Servicing Agreement.)
_________ 2. Mortgage Loan Liquidated. (Servicer hereby certifies that all
proceeds of foreclosure, insurance or other liquidation have been
finally received and credited to or will be escrowed pursuant to
the Servicing Agreement.)
_________ 3. Mortgage Loan in Foreclosure.
_________ Other(explain) __________________________________________________
If item 1 or 2 above is checked, and if all or part of the Trustee's
Mortgage File was previously released to us, please release to us our previous
receipt on file with you, as well as any additional documents in your possession
relating to the above specified Mortgage Loan. If item 3 or 4 is checked, upon
our return of all of the above documents to you as Trustee, please acknowledge
your receipt by signing in the space indicated below, and returning this form.
[Servicer]
By: ____________________________
Name: ____________________________
Title: ____________________________
Date: ____________________________
Documents returned to Trustee:
By: ____________________________
Name: ____________________________
Title: ____________________________
Date: ____________________________