Fair Value Option; Sale of Administered REO Properties. Sale of the Non-Trust- Serviced Pooled Mortgage Loan. (a) The applicable Master Servicer, the Special Servicer or the Trustee may sell or purchase, or permit the sale or purchase of, a Pooled Mortgage Loan or REO Property (or, in the case of any REO Property related to a Mortgage Loan Group, such REO Property and/or the beneficial interest of the Trust Fund in such REO Property) only (i) on the terms and subject to the conditions set forth in this Section 3.18, (ii) as otherwise expressly provided in or contemplated by Sections 2.03 and 9.01 of this Agreement, (iii) in the case of a Pooled Mortgage Loan (or REO Property related thereto) with a related mezzanine loan, in connection with a Mortgage Loan default if and as set forth in the related intercreditor agreement, (iv) in the case of a Pooled Mortgage Loan (or REO Property related thereto) included in a Serviced Mortgage Loan Group, in connection with a Mortgage Loan default if and as set forth in the related Mortgage Loan Group Intercreditor Agreement, or (v) in the case of a Non-Trust-Serviced Pooled Mortgage Loan (or REO Property related thereto), pursuant to a purchase option under the related Mortgage Loan Group Intercreditor Agreement and/or the related Non-Trust Servicing Agreement. (b) If any Pooled Mortgage Loan becomes a Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall so notify the Certificate Administrator, the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class (and, if the affected Pooled Mortgage Loan is included in a Serviced Mortgage Loan Group that includes one or more Serviced Non-Pooled Subordinate Loans, the related Non-Pooled Noteholder(s)), in writing. In addition, the Special Servicer shall determine (in accordance with the Servicing Standard, taking into account the considerations contemplated by the following paragraph, but without regard to the Purchase Option provided for in Section 3.18(c) below), and report to the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class, the Fair Value of such Pooled Mortgage Loan. The Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan shall be made as soon as reasonably practicable, but in no event later than 30 days after the Special Servicer receives the requisite Appraisal or any other third-party reports that it deems necessary to make the determination. If at any time the Special Servicer becomes aware of any circumstances or conditions that have occurred or arisen with respect to any Specially Designated Defaulted Pooled Mortgage Loan or the related Mortgaged Property subsequent to, and that would, in the Special Servicer's reasonable judgment, materially affect, the Special Servicer's most recent Fair Value determination with respect to such Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall redetermine (in a manner as is permitted above, but taking into account any such new circumstances or conditions known to the Special Servicer), and report to the Certificate Administrator, the Trustee, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan. In addition, if the Special Servicer has not accepted a bid at the Fair Value of the Mortgage Loan, as most recently determined by the Special Servicer, prior to the expiration of 90 days from such determination, and thereafter the Special Servicer receives a bid at such Fair Value or a request from a holder of the Purchase Option for an updated determination of the Fair Value of the Mortgage Loan, the Special Servicer shall redetermine (in the same manner as provided above, but taking into account any such new circumstances or conditions known to the Special Servicer), and report to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan; provided, however, that the Special Servicer may rely on the existing third-party information if it deems such reliance to be reasonable. In determining the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the related Mortgaged Property is located, and the time and expense associated with and the expected recovery from a purchaser's foreclosing on the related Mortgaged Property or working out such Mortgage Loan. In addition, the Special Servicer shall refer to relevant information contained in the Servicing File, shall take into account the most recent Appraisal obtained or conducted with respect to the related Mortgaged Property in the preceding 12-month period in accordance with this Agreement and shall not determine the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan without such an Appraisal; provided that the Special Servicer shall take account of any change in the circumstances regarding or the condition of the related Mortgaged Property actually known to the Special Servicer that has occurred or arisen subsequent to, and that would materially affect the value of the related Mortgaged Property reflected in, such Appraisal. Furthermore, the Special Servicer may consider available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The Special Servicer may, to the extent it is reasonable to do so in accordance with the Servicing Standard, conclusively rely on any opinions or reports of qualified Independent third parties expert in real estate or commercial mortgage loan matters with at least 5 years experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan in making such determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Special Servicer pursuant to this Section 3.18(b) shall constitute, and be reimbursable as, Servicing Advances. The other parties to this Agreement shall cooperate with all reasonable requests for information made by the Special Servicer in order to allow the Special Servicer to perform its duties pursuant to this Section 3.18(b). Notwithstanding the foregoing, no Fair Value shall be determined under this Agreement with respect to a Non-Trust-Serviced Pooled Mortgage Loan. (c) The Majority Controlling Class Certificateholder(s) or any assignee thereof may, at its or their option, purchase from the Trust any Specially Designated Defaulted Pooled Mortgage Loan (such option, the "Purchase Option"), at a cash price (the "Option Price") equal to the Fair Value of such Mortgage Loan (as most recently determined by the Special Servicer and reported to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer as provided in Section 3.18(b) above) or, if no such Fair Value has yet been established as provided in Section 3.18(b) above or if the Special Servicer is in the process of redetermining such Fair Value because of a change in circumstances, equal to the Purchase Price; provided that: (i) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan will remain in effect only for the period (the "Option Period") that commences on the date that such Mortgage Loan first becomes a Specially Designated Defaulted Pooled Mortgage Loan and ends on the earlier of (A) the date on which such Mortgage Loan becomes a Corrected Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted Pooled Mortgage Loan and (B) the date on which a Liquidation Event occurs with respect to such Pooled Mortgage Loan or the related Mortgaged Property becomes an REO Property; (ii) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan shall be assignable by the Majority Controlling Class Certificateholder(s) during the Option Period to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the parties hereto are notified in writing of the assignment; (iii) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Majority Controlling Class Certificateholder(s) or any assignee thereof within 60 days after the Fair Value of such Mortgage Loan has initially been established as provided in Section 3.18(b) above, then the Majority Controlling Class Certificateholder(s) shall be deemed to have assigned such Purchase Option, for a 30-day period only, to the Special Servicer; (iv) during the 30-day period following the assignment to it of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall be entitled to exercise such Purchase Option or to assign such Purchase Option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the other parties hereto are notified in writing of the assignment; (v) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Special Servicer or its assignee within the 30-day period following the assignment of such Purchase Option to the Special Servicer as contemplated by clause (iii) above, then such Purchase Option will automatically revert to the Majority Controlling Class Certificateholder(s); and (vi) prior to any exercise of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by the Special Servicer or any Affiliate thereof, subject to the following paragraph, the Trustee shall confirm and report to the applicable Master Servicer, the Certificate Administrator and the Special Servicer that the Special Servicer's determination of the Fair Value of such Mortgage Loan is consistent with or greater than what the Trustee considers to be the Fair Value of such Mortgage Loan; provided that the Special Servicer may, at its own expense, revise any such Fair Value determination that is rejected by the Trustee, it being understood and agreed that such revised Fair Value determination will likewise be subject to confirmation in accordance with this clause (vi). Notwithstanding anything contained in clause (vi) of the preceding paragraph to the contrary, if the Trustee is required to confirm or reject the Special Servicer's Fair Value determination as contemplated by such clause (vi), the Trustee may (at its option and at the expense of the Trust Fund) designate an Independent third party expert in real estate or commercial mortgage loan matters with at least 5 years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Pooled Mortgage Loan, that has been selected with reasonable care by the Trustee to confirm that the Special Servicer's Fair Value determination as contemplated by such clause (vi) is consistent with or greater than what the Independent third party considers to be the Fair Value of such Mortgage Loan. In the event that the Trustee designates such a third party to make such determination, the Trustee shall be entitled to rely upon such third party's determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Trustee or any such third party pursuant to this paragraph or clause (vi) of the preceding paragraph shall be advanced by the applicable Master Servicer and shall constitute, and be reimbursable as, Servicing Advances; provided that, the Trustee shall not so engage a third party expert whose fees exceed a commercially reasonable sum as determined by the Trustee. The Special Servicer shall provide the Trustee with all information that the Special Servicer utilized in determining the Fair Value that is being confirmed. Any party entitled to do so may exercise the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by providing to the Certificate Administrator, the Trustee, the applicable Master Servicer and the Special Servicer: (i) written notice of its intention to purchase such Mortgage Loan at the Option Price; and (ii) if such party is the assignee of the Special Servicer or the Majority Controlling Class Certificateholder(s), evidence of its right to exercise such Purchase Option. The actual purchase of such Specially Designated Defaulted Pooled Mortgage Loan shall occur (by delivery of cash in the amount of the applicable Option Price to the Special Servicer for deposit in the applicable Master Servicer's Collection Account) no later than ten days after the later of (i) such exercise of the Purchase Option with respect to such Mortgage Loan and (ii) if applicable, the confirmation of the Special Servicer's Fair Value determination with respect to such Mortgage Loan in accordance with clause (vi) of the first paragraph of this Section 3.18(c) and/or in accordance with the second paragraph of this Section 3.18(c). If any Person to which the Purchase Option has been assigned as provided above exercises the Purchase Option but fails to consummate the actual purchase of the Specially Designated Defaulted Pooled Mortgage Loan in accordance with the preceding sentence, then the Purchase Option shall automatically thereupon be reinstated, revert to and be exercisable by the Controlling Class Representative or the Special Servicer, as applicable. Notwithstanding the Purchase Option provided for in this Section 3.18(c), the Special Servicer shall proceed in respect of any Specially Designated Defaulted Pooled Mortgage Loan in accordance with Section 3.09 and/or Section 3.20, without regard to such Purchase Option. In no event shall there be a Purchase Option hereunder with respect to a Non-Trust-Serviced Pooled Mortgage Loan. However, in the event of the exercise of a similar option under the related Non-Trust Servicing Agreement and/or pursuant to the related Mortgage Loan Group Intercreditor Agreement, the Trustee shall sell such Non-Trust-Serviced Pooled Mortgage Loan in accordance with such agreement. (d) The Special Servicer shall use its reasonable efforts, consistent with the Servicing Standard, to solicit cash bids for each Administered REO Property in such manner as will be reasonably likely to realize a fair price (determined pursuant to Section 3.18(e) below) for any Administered REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period provided for by Section 3.16(a)). The Special Servicer shall accept the first (and, if multiple cash bids are received by a specified bid date, the highest) cash bid received from any Person that constitutes a fair price (determined pursuant to Section 3.18(e) below) for such Administered REO Property. If the Special Servicer reasonably believes that it will be unable to realize a fair price (determined pursuant to Section 3.18(e) below) with respect to any Administered REO Property within the time constraints imposed by Section 3.16(a), then the Special Servicer shall, consistent with the Servicing Standard, dispose
Appears in 2 contracts
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2006-Pwr11), Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2005-Pwr9)
Fair Value Option; Sale of Administered REO Properties. Sale of the Non-Trust- Trust-Serviced Pooled Mortgage Loan.
(a) The applicable Master Servicer, the applicable Special Servicer or the Trustee may sell or purchase, or permit the sale or purchase of, a Pooled Mortgage Loan or REO Property (or, in the case of any REO Property related to a Mortgage Loan Group, such REO Property and/or the beneficial interest of the Trust Fund in such REO Property) only (i) on the terms and subject to the conditions set forth in this Section 3.18, (ii) as otherwise expressly provided in or contemplated by Sections 2.03 and 9.01 of this Agreement, (iii) in the case of a Pooled Mortgage Loan (or REO Property related thereto) with a related mezzanine loan, in connection with a Mortgage Loan default if and as set forth in the related intercreditor agreement, (iv) in the case of a Pooled Mortgage Loan (or REO Property related thereto) included in a Serviced Mortgage the Shell Plaza Loan Group, in connection with a Mortgage Loan default if and as set forth in the related Mortgage Loan Group Shell Plaza Intercreditor Agreement, or (v) in the case of a the Non-Trust-Serviced Pooled Mortgage Loan (or REO Property related thereto), pursuant to a purchase option under the related Mortgage Loan Group Intercreditor Agreement and/or the related Non-Trust Servicing Agreement.
(b) If any Pooled Mortgage Loan becomes a Specially Designated Defaulted Pooled Mortgage Loan, then the applicable Special Servicer shall so notify the Certificate Administrator, the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class (and, if the affected Pooled Mortgage Loan is included in a Serviced the Shell Plaza Pooled Mortgage Loan Group that includes one or more Serviced Loan, the Shell Plaza Non-Pooled Subordinate Loans, the related Non-Pooled Noteholder(s)Noteholder), in writing. In addition, the applicable Special Servicer shall determine (in accordance with the Servicing Standard, taking into account the considerations contemplated by the following paragraph, but without regard to the Purchase Option provided for in Section 3.18(c) below), and report to the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class, the Fair Value of such Pooled Mortgage Loan. The applicable Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan shall be made as soon as reasonably practicable, but in no event later than 30 days after the applicable Special Servicer receives the requisite Appraisal or any other third-party reports that it deems necessary to make the determination. If at any time the applicable Special Servicer becomes aware of any circumstances or conditions that have occurred or arisen with respect to any Specially Designated Defaulted Pooled Mortgage Loan or the related Mortgaged Property subsequent to, and that would, in the applicable Special Servicer's reasonable judgment, materially affect, the applicable Special Servicer's most recent Fair Value determination with respect to such Specially Designated Defaulted Pooled Mortgage Loan, then the applicable Special Servicer shall redetermine (in a manner as is permitted above, but taking into account any such new circumstances or conditions known to the applicable Special Servicer), and report to the Certificate Administrator, the Trustee, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan. In addition, if the applicable Special Servicer has not accepted a bid at the Fair Value of the Mortgage Loan, as most recently determined by the applicable Special Servicer, prior to the expiration of 90 days from such determination, and thereafter the applicable Special Servicer receives a bid at such Fair Value or a request from a holder of the Purchase Option for an updated determination of the Fair Value of the Mortgage Loan, the applicable Special Servicer shall redetermine (in the same manner as provided above, but taking into account any such new circumstances or conditions known to the applicable Special Servicer), and report to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan; provided, however, that the applicable Special Servicer may rely on the existing third-party information if it deems such reliance to be reasonable. In determining the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan, the applicable Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the related Mortgaged Property is located, and the time and expense associated with and the expected recovery from a purchaser's foreclosing on the related Mortgaged Property or working out such Mortgage Loan. In addition, the applicable Special Servicer shall refer to all relevant information contained in the Servicing File, shall take into account the most recent Appraisal obtained or conducted with respect to the related Mortgaged Property in the preceding 12-month period in accordance with this Agreement and shall not determine the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan without such an Appraisal; provided that the applicable Special Servicer shall take account of any change in the circumstances regarding or the condition of the related Mortgaged Property actually known to the applicable Special Servicer that has occurred or arisen subsequent to, and that would materially affect the value of the related Mortgaged Property reflected in, such Appraisal. Furthermore, the applicable Special Servicer may shall consider available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the applicable Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The applicable Special Servicer may, to the extent it is reasonable to do so in accordance with the Servicing Standard, conclusively rely on any opinions or reports of qualified Independent third parties expert in real estate or commercial mortgage loan matters with at least 5 years experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan in making such determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the applicable Special Servicer pursuant to this Section 3.18(b) shall constitute, and be reimbursable as, Servicing Advances. The other parties to this Agreement shall cooperate with all reasonable requests for information made by the applicable Special Servicer in order to allow the applicable Special Servicer to perform its duties pursuant to this Section 3.18(b). Notwithstanding the foregoing, no Fair Value shall be determined under this Agreement with respect to a the Non-Trust-Serviced Pooled Mortgage Loan.
(c) The Majority Controlling Class Certificateholder(s) or any assignee thereof may, at its or their option, purchase from the Trust any Specially Designated Defaulted Pooled Mortgage Loan (such option, the "Purchase Option"), at a cash price (the "Option Price") equal to the Fair Value of such Mortgage Loan (as most recently determined by the Special Servicer and reported to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer as provided in Section 3.18(b) above) or, if no such Fair Value has yet been established as provided in Section 3.18(b) above or if the Special Servicer is in the process of redetermining such Fair Value because of a change in circumstances, equal to the Purchase Price; provided that:
(i) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan will remain in effect only for the period (the "Option Period") that commences on the date that such Mortgage Loan first becomes a Specially Designated Defaulted Pooled Mortgage Loan and ends on the earlier of (A) the date on which such Mortgage Loan becomes a Corrected Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted Pooled Mortgage Loan and (B) the date on which a Liquidation Event occurs with respect to such Pooled Mortgage Loan or the related Mortgaged Property becomes an REO Property;
(ii) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan shall be assignable by the Majority Controlling Class Certificateholder(s) during the Option Period to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the parties hereto are notified in writing of the assignment;
(iii) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Majority Controlling Class Certificateholder(s) or any assignee thereof within 60 days after the Fair Value of such Mortgage Loan has initially been established as provided in Section 3.18(b) above, then the Majority Controlling Class Certificateholder(s) shall be deemed to have assigned such Purchase Option, for a 30-day period only, to the Special Servicer;
(iv) during the 30-day period following the assignment to it of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall be entitled to exercise such Purchase Option or to assign such Purchase Option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the other parties hereto are notified in writing of the assignment;
(v) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Special Servicer or its assignee within the 30-day period following the assignment of such Purchase Option to the Special Servicer as contemplated by clause (iii) above, then such Purchase Option will automatically revert to the Majority Controlling Class Certificateholder(s); and
(vi) prior to any exercise of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by the Special Servicer or any Affiliate thereof, subject to the following paragraph, the Trustee shall confirm and report to the applicable Master Servicer, the Certificate Administrator and the Special Servicer that the Special Servicer's determination of the Fair Value of such Mortgage Loan is consistent with or greater than what the Trustee considers to be the Fair Value of such Mortgage Loan; provided that the Special Servicer may, at its own expense, revise any such Fair Value determination that is rejected by the Trustee, it being understood and agreed that such revised Fair Value determination will likewise be subject to confirmation in accordance with this clause (vi). Notwithstanding anything contained in clause (vi) of the preceding paragraph to the contrary, if the Trustee is required to confirm or reject the Special Servicer's Fair Value determination as contemplated by such clause (vi), the Trustee may (at its option and at the expense of the Trust Fund) designate an Independent third party expert in real estate or commercial mortgage loan matters with at least 5 years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Pooled Mortgage Loan, that has been selected with reasonable care by the Trustee to confirm that the Special Servicer's Fair Value determination as contemplated by such clause (vi) is consistent with or greater than what the Independent third party considers to be the Fair Value of such Mortgage Loan. In the event that the Trustee designates such a third party to make such determination, the Trustee shall be entitled to rely upon such third party's determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Trustee or any such third party pursuant to this paragraph or clause (vi) of the preceding paragraph shall be advanced by the applicable Master Servicer and shall constitute, and be reimbursable as, Servicing Advances; provided that, the Trustee shall not so engage a third party expert whose fees exceed a commercially reasonable sum as determined by the Trustee. The Special Servicer shall provide the Trustee with all information that the Special Servicer utilized in determining the Fair Value that is being confirmed. Any party entitled to do so may exercise the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by providing to the Certificate Administrator, the Trustee, the applicable Master Servicer and the Special Servicer:
(i) written notice of its intention to purchase such Mortgage Loan at the Option Price; and
(ii) if such party is the assignee of the Special Servicer or the Majority Controlling Class Certificateholder(s), evidence of its right to exercise such Purchase Option. The actual purchase of such Specially Designated Defaulted Pooled Mortgage Loan shall occur (by delivery of cash in the amount of the applicable Option Price to the Special Servicer for deposit in the applicable Master Servicer's Collection Account) no later than ten days after the later of (i) such exercise of the Purchase Option with respect to such Mortgage Loan and (ii) if applicable, the confirmation of the Special Servicer's Fair Value determination with respect to such Mortgage Loan in accordance with clause (vi) of the first paragraph of this Section 3.18(c) and/or in accordance with the second paragraph of this Section 3.18(c). If any Person to which the Purchase Option has been assigned as provided above exercises the Purchase Option but fails to consummate the actual purchase of the Specially Designated Defaulted Pooled Mortgage Loan in accordance with the preceding sentence, then the Purchase Option shall automatically thereupon be reinstated, revert to and be exercisable by the Controlling Class Representative or the Special Servicer, as applicable. Notwithstanding the Purchase Option provided for in this Section 3.18(c), the Special Servicer shall proceed in respect of any Specially Designated Defaulted Pooled Mortgage Loan in accordance with Section 3.09 and/or Section 3.20, without regard to such Purchase Option. In no event shall there be a Purchase Option hereunder with respect to a Non-Trust-Serviced Pooled Mortgage Loan. However, in the event of the exercise of a similar option under the related Non-Trust Servicing Agreement and/or pursuant to the related Mortgage Loan Group Intercreditor Agreement, the Trustee shall sell such Non-Trust-Serviced Pooled Mortgage Loan in accordance with such agreement.
(d) The Special Servicer shall use its reasonable efforts, consistent with the Servicing Standard, to solicit cash bids for each Administered REO Property in such manner as will be reasonably likely to realize a fair price (determined pursuant to Section 3.18(e) below) for any Administered REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period provided for by Section 3.16(a)). The Special Servicer shall accept the first (and, if multiple cash bids are received by a specified bid date, the highest) cash bid received from any Person that constitutes a fair price (determined pursuant to Section 3.18(e) below) for such Administered REO Property. If the Special Servicer reasonably believes that it will be unable to realize a fair price (determined pursuant to Section 3.18(e) below) with respect to any Administered REO Property within the time constraints imposed by Section 3.16(a), then the Special Servicer shall, consistent with the Servicing Standard, dispose
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2004-Pwr4)
Fair Value Option; Sale of Administered REO Properties. Sale of the Non-Trust- Serviced Pooled Mortgage Loan.
(a) The applicable Master Servicer, the applicable Special Servicer or the Trustee may sell or purchase, or permit the sale or purchase of, a Pooled Mortgage Loan or REO Property (or, in the case of any REO Property related to a Mortgage Loan Group, such REO Property and/or the beneficial interest of the Trust Fund in such REO Property) only (i) on the terms and subject to the conditions set forth in this Section 3.18, (ii) as otherwise expressly provided in or contemplated by Sections 2.03 and 9.01 of this Agreement, (iii) in the case of a Pooled Mortgage Loan (or REO Property related thereto) with a related mezzanine loan, in connection with a Mortgage Loan default if and as set forth in the related intercreditor agreement, (iv) in the case of a Pooled Mortgage Loan (or REO Property related thereto) included in a Serviced Mortgage Loan Group, in connection with a Mortgage Loan default if and as set forth in the related Mortgage Loan Group Intercreditor Agreement, or (v) in the case of a Non-Trust-Serviced Pooled Mortgage Loan (or REO Property related thereto), pursuant to a purchase option under the related Mortgage Loan Group Intercreditor Agreement and/or the related Non-Trust Servicing Agreement.
(b) If any Pooled Mortgage Loan becomes a Specially Designated Defaulted Pooled Mortgage Loan, then the applicable Special Servicer shall so notify the Certificate Administrator, the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class (and, if the affected Pooled Mortgage Loan is included in a Serviced Mortgage Loan Group that includes one or more Serviced Non-Pooled Subordinate Loans, the related Non-Pooled Noteholder(s)), in writing. In addition, the applicable Special Servicer shall determine (in accordance with the Servicing Standard, taking into account the considerations contemplated by the following paragraph, but without regard to the Purchase Option provided for in Section 3.18(c) below), and report to the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class, the Fair Value of such Pooled Mortgage Loan. The applicable Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan shall be made as soon as reasonably practicable, but in no event later than 30 days after the applicable Special Servicer receives the requisite Appraisal or any other third-party reports that it deems necessary to make the determination. If at any time the applicable Special Servicer becomes aware of any circumstances or conditions that have occurred or arisen with respect to any Specially Designated Defaulted Pooled Mortgage Loan or the related Mortgaged Property subsequent to, and that would, in the applicable Special Servicer's reasonable judgment, materially affect, the applicable Special Servicer's most recent Fair Value determination with respect to such Specially Designated Defaulted Pooled Mortgage Loan, then the applicable Special Servicer shall redetermine (in a manner as is permitted above, but taking into account any such new circumstances or conditions known to the applicable Special Servicer), and report to the Certificate Administrator, the Trustee, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan. In addition, if the applicable Special Servicer has not accepted a bid at the Fair Value of the Mortgage Loan, as most recently determined by the applicable Special Servicer, prior to the expiration of 90 days from such determination, and thereafter the applicable Special Servicer receives a bid at such Fair Value or a request from a holder of the Purchase Option for an updated determination of the Fair Value of the Mortgage Loan, the applicable Special Servicer shall redetermine (in the same manner as provided above, but taking into account any such new circumstances or conditions known to the applicable Special Servicer), and report to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan; provided, however, that the applicable Special Servicer may rely on the existing third-party information if it deems such reliance to be reasonable. In determining the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan, the applicable Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the related Mortgaged Property is located, and the time and expense associated with and the expected recovery from a purchaser's foreclosing on the related Mortgaged Property or working out such Mortgage Loan. In addition, the applicable Special Servicer shall refer to all relevant information contained in the Servicing File, shall take into account the most recent Appraisal obtained or conducted with respect to the related Mortgaged Property in the preceding 12-month period in accordance with this Agreement and shall not determine the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan without such an Appraisal; provided that the applicable Special Servicer shall take account of any change in the circumstances regarding or the condition of the related Mortgaged Property actually known to the applicable Special Servicer that has occurred or arisen subsequent to, and that would materially affect the value of the related Mortgaged Property reflected in, such Appraisal. Furthermore, the applicable Special Servicer may shall consider available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the applicable Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The applicable Special Servicer may, to the extent it is reasonable to do so in accordance with the Servicing Standard, conclusively rely on any opinions or reports of qualified Independent third parties expert in real estate or commercial mortgage loan matters with at least 5 years experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan in making such determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the applicable Special Servicer pursuant to this Section 3.18(b) shall constitute, and be reimbursable as, Servicing Advances. The other parties to this Agreement shall cooperate with all reasonable requests for information made by the applicable Special Servicer in order to allow the applicable Special Servicer to perform its duties pursuant to this Section 3.18(b). Notwithstanding the foregoing, no Fair Value shall be determined under this Agreement with respect to a Non-Trust-Serviced Pooled Mortgage Loan.
(c) The Majority Controlling Class Certificateholder(s) or any assignee thereof may, at its or their option, purchase from the Trust any Specially Designated Defaulted Pooled Mortgage Loan (such option, the "Purchase Option"), at a cash price (the "Option Price") equal to the Fair Value of such Mortgage Loan (as most recently determined by the applicable Special Servicer and reported to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer as provided in Section 3.18(b) above) or, if no such Fair Value has yet been established as provided in Section 3.18(b) above or if the applicable Special Servicer is in the process of redetermining such Fair Value because of a change in circumstances, equal to the Purchase Price; provided that:
(i) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan will remain in effect only for the period (the "Option Period") that commences on the date that such Mortgage Loan first becomes a Specially Designated Defaulted Pooled Mortgage Loan and ends on the earlier of (A) the date on which such Mortgage Loan becomes a Corrected Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted Pooled Mortgage Loan and (B) the date on which a Liquidation Event occurs with respect to such Pooled Mortgage Loan or the related Mortgaged Property becomes an REO Property;
(ii) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan shall be assignable by the Majority Controlling Class Certificateholder(s) during the Option Period to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the parties hereto are notified in writing of the assignment;
(iii) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Majority Controlling Class Certificateholder(s) or any assignee thereof within 60 days after the Fair Value of such Mortgage Loan has initially been established as provided in Section 3.18(b) above, then the Majority Controlling Class Certificateholder(s) shall be deemed to have assigned such Purchase Option, for a 30-day period only, to the applicable Special Servicer;
(iv) during the 30-day period following the assignment to it of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan, the applicable Special Servicer shall be entitled to exercise such Purchase Option or to assign such Purchase Option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the other parties hereto are notified in writing of the assignment;
(v) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the applicable Special Servicer or its assignee within the 30-day period following the assignment of such Purchase Option to the applicable Special Servicer as contemplated by clause (iii) above, then such Purchase Option will automatically revert to the Majority Controlling Class Certificateholder(s); and
(vi) prior to any exercise of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by the applicable Special Servicer or any Affiliate thereof, subject to the following paragraph, the Trustee shall confirm and report to the applicable Master Servicer, the Certificate Administrator and the applicable Special Servicer that the applicable Special Servicer's determination of the Fair Value of such Mortgage Loan is consistent with or greater than what the Trustee considers to be the Fair Value of such Mortgage Loan; provided that the applicable Special Servicer may, at its own expense, revise any such Fair Value determination that is rejected by the Trustee, it being understood and agreed that such revised Fair Value determination will likewise be subject to confirmation in accordance with this clause (vi). Notwithstanding anything contained in clause (vi) of the preceding paragraph to the contrary, if the Trustee is required to confirm or reject the applicable Special Servicer's Fair Value determination as contemplated by such clause (vi), the Trustee may (at its option and at the expense of the Trust Fund) designate an Independent third party expert in real estate or commercial mortgage loan matters with at least 5 years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Pooled Mortgage Loan, that has been selected with reasonable care by the Trustee to confirm that the applicable Special Servicer's Fair Value determination as contemplated by such clause (vi) is consistent with or greater than what the Independent third party considers to be the Fair Value of such Mortgage Loan. In the event that the Trustee designates such a third party to make such determination, the Trustee shall be entitled to rely upon such third party's determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Trustee or any such third party pursuant to this paragraph or clause (vi) of the preceding paragraph shall be advanced by the applicable Master Servicer and shall constitute, and be reimbursable as, Servicing Advances; provided that, the Trustee shall not so engage a third party expert whose fees exceed a commercially reasonable sum as determined by the Trustee. The applicable Special Servicer shall provide the Trustee with all information that the applicable Special Servicer utilized in determining the Fair Value that is being confirmed. Any party entitled to do so may exercise the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by providing to the Certificate Administrator, the Trustee, the applicable Master Servicer and the applicable Special Servicer:
(i) written notice of its intention to purchase such Mortgage Loan at the Option Price; and
(ii) if such party is the assignee of the applicable Special Servicer or the Majority Controlling Class Certificateholder(s), evidence of its right to exercise such Purchase Option. The actual purchase of such Specially Designated Defaulted Pooled Mortgage Loan shall occur (by delivery of cash in the amount of the applicable Option Price to the applicable Special Servicer for deposit in the applicable Master Servicer's Collection Account) no later than ten days after the later of (i) such exercise of the Purchase Option with respect to such Mortgage Loan and (ii) if applicable, the confirmation of the applicable Special Servicer's Fair Value determination with respect to such Mortgage Loan in accordance with clause (vi) of the first paragraph of this Section 3.18(c) and/or in accordance with the second paragraph of this Section 3.18(c). If any Person to which the Purchase Option has been assigned as provided above exercises the Purchase Option but fails to consummate the actual purchase of the applicable Specially Designated Defaulted Pooled Mortgage Loan in accordance with the preceding sentence, then the Purchase Option shall automatically thereupon be reinstated, revert to and be exercisable by the Controlling Class Representative or the applicable Special Servicer, as applicable. Notwithstanding the Purchase Option provided for in this Section 3.18(c), the applicable Special Servicer shall proceed in respect of any Specially Designated Defaulted Pooled Mortgage Loan in accordance with Section 3.09 and/or Section 3.20, without regard to such Purchase Option. In no event shall there be a Purchase Option hereunder with respect to a Non-Trust-Serviced Pooled Mortgage Loan. However, in the event of the exercise of a similar option under the related Non-Trust Servicing Agreement and/or pursuant to the related Mortgage Loan Group Intercreditor Agreement, the Trustee shall sell such Non-Trust-Serviced Pooled Mortgage Loan in accordance with such agreement.
(d) The Special Servicer shall use its reasonable efforts, consistent with the Servicing Standard, to solicit cash bids for each Administered REO Property in such manner as will be reasonably likely to realize a fair price (determined pursuant to Section 3.18(e) below) for any Administered REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period provided for by Section 3.16(a)). The Special Servicer shall accept the first (and, if multiple cash bids are received by a specified bid date, the highest) cash bid received from any Person that constitutes a fair price (determined pursuant to Section 3.18(e) below) for such Administered REO Property. If the Special Servicer reasonably believes that it will be unable to realize a fair price (determined pursuant to Section 3.18(e) below) with respect to any Administered REO Property within the time constraints imposed by Section 3.16(a), then the Special Servicer shall, consistent with the Servicing Standard, dispose
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2005-Pwr8)
Fair Value Option; Sale of Administered REO Properties. Sale of the Non-Trust- Serviced Pooled Mortgage Loan.
(a) The applicable Master Servicer, the Special Servicer or the Trustee parties hereto may sell or purchase, or permit the sale or purchase of, a Pooled Mortgage Loan or Administered REO Property (or, in the case of any REO Property related to a Mortgage Loan Group, such REO Property and/or the beneficial interest of the Trust Fund in such REO Property) only (i) on the terms and subject to the conditions set forth in this Section 3.18, (ii) SECTION 3.18 or as otherwise expressly provided in or contemplated by Sections 2.03 and SECTION 2.03, SECTION 9.01 of this Agreementand/or the related Mortgage Loan Documents (including, (iii) in the case of a Pooled Mortgage Loan (or REO Property related thereto) with a related mezzanine loan, in connection with a Mortgage Loan default if and as set forth in the related intercreditor agreement, (iv) in the case of a Pooled Mortgage Loan (or REO Property related thereto) included in a [Separately Serviced Mortgage Loan GroupLoan], in connection with a the [Separately Serviced Mortgage Loan default if and as set forth in the related Mortgage Loan Group Loan] Intercreditor Agreement, or (v) in the case of a Non-Trust-Serviced Pooled Mortgage Loan (or REO Property related theretoAgreements), pursuant to a purchase option under the related Mortgage Loan Group Intercreditor Agreement and/or the related Non-Trust Servicing Agreement.
(b) If any Pooled Serviced Mortgage Loan becomes a Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall promptly so notify the Certificate Administrator, the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class (and, if the affected Pooled Mortgage Loan is included in a Serviced Mortgage Loan Group that includes one or more Serviced Non-Pooled Subordinate Loans, the related Non-Pooled Noteholder(s)), in writing. In addition, the Special Servicer shall determine (in accordance with the Servicing Standard, taking into account the considerations contemplated by the following paragraph, but without regard to the Purchase Option provided for in Section 3.18(c) below), and report to the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class, the Fair Value of such Pooled Mortgage Loan. The Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan shall be made as soon as reasonably practicable, but in no event later than 30 days after the Special Servicer receives the requisite Appraisal or any other third-party reports that it deems necessary to make the determination. If at any time the Special Servicer becomes aware of any circumstances or conditions that have occurred or arisen with respect to any Specially Designated Defaulted Pooled Mortgage Loan or the related Mortgaged Property subsequent to, and that would, in the Special Servicer's reasonable judgment, materially affect, the Special Servicer's most recent Fair Value determination with respect to such Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall redetermine (in a manner as is permitted above, but taking into account any such new circumstances or conditions known to the Special Servicer), and report to the Certificate Administrator, writing the Trustee, the Controlling Class Representative and the applicable Master Servicer Servicer, and shall concurrently, or as soon as reasonably practical (and the Certificate Administrator shalland, in turnany event, report within 30 days) thereafter, make a Fair Value Determination with respect to such Mortgage Loan based on the most recent Appraisal in respect of the related Mortgaged Property then in the Special Servicer's possession, together with such other third-party reports and other information then in the Special Servicer's possession that the Special Servicer reasonably believes to be relevant to the Holder(s) Special Servicer's Fair Value Determination with respect to such Mortgage Loan, including information regarding any change in circumstances regarding the related Mortgaged Property known to the Special Servicer that has occurred subsequent to, and that would materially affect the value of the Controlling Class)related Mortgaged Property reflected in, the updated Fair Value most recent Appraisal of the subject Specially Designated Defaulted Pooled Mortgage Loan. In additionrelated Mortgaged Property in the related Servicing File; PROVIDED that, if the Special Servicer has not accepted is then in the process of obtaining a bid at the Fair Value of the Mortgage Loan, as most recently determined by the Special Servicer, prior new Appraisal with respect to the expiration of 90 days from such determinationrelated Mortgaged Property pursuant to SECTION 3.19(C), and thereafter the Special Servicer receives a bid at such Fair Value or a request from a holder of the Purchase Option for an updated determination of the Fair Value of the Mortgage Loan, then the Special Servicer shall redetermine make its Fair Value Determination with respect to such Mortgage Loan in accordance with the Servicing Standard as soon as reasonably practicable (but in the same manner as provided above, but taking into account any such new circumstances or conditions known to event within 30 days) after the Special Servicer), and report to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) 's receipt of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan; provided, however, that the Special Servicer may rely on the existing third-party information if it deems such reliance to be reasonablenew Appraisal. In determining the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy and the commercial real estate market in the area where the related Mortgaged Property is located, and the time and expense associated with and the expected recovery from a purchaser's foreclosing on the related Mortgaged Property or working out such Mortgage Loan, but shall ignore the purchase option provided for in SECTION 3.18(c). In addition, the Special Servicer shall refer to all relevant information contained in the Servicing File, shall take into account including the most recent Appraisal obtained or conducted with respect to the related Mortgaged Property in the preceding 12-month period in accordance with this Agreement Agreement, and shall not determine the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan without such an Appraisal; provided PROVIDED that the Special Servicer shall take account of any change in the circumstances regarding or the condition of the related Mortgaged Property actually known to the Special Servicer that has occurred or arisen subsequent to, and that would would, in the Special Servicer's reasonable judgment, materially affect the value of the related Mortgaged Property reflected in, such Appraisal. Furthermore, the Special Servicer may shall consider available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The Special Servicer may, to the extent it is reasonable to do so in accordance with the Servicing Standard, conclusively rely on any opinions or reports of qualified Independent third parties expert experts in real estate or commercial mortgage loan matters with at least 5 years five years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan Loan, selected with reasonable care by the Special Servicer, in making such determination. The All reasonable costs of all appraisals, inspection reports and broker opinions of value, expenses incurred by the Special Servicer pursuant to this Section 3.18(bSECTION 3.18(B) shall constitute, and be reimbursable as, Servicing Advances. The other parties to this Agreement shall cooperate with all reasonable requests for information made by the Special Servicer in order to allow the Special Servicer to perform its duties pursuant to this Section 3.18(bSECTION 3.18(B). Notwithstanding the foregoing, no Fair Value shall be determined under this Agreement in the event that the Special Servicer or any Affiliate of the Special Servicer exercises the purchase option described in SECTION 3.18(C) with respect to a Non-Trust-Serviced Pooled any Specially Designated Defaulted Mortgage Loan., including as a Controlling Class Certificateholder or as the assignee of another option holder, then the Master Servicer will be required to confirm that the Special Servicer's Fair Value Determination of such Specially Designated Defaulted Mortgage Loan is no less than the amount that the Master Servicer considers to be the fair value of such Specially Designated Defaulted Mortgage Loan (such confirmation to be made within 10 days (or, if an Independent expert is to be retained as contemplated below, 20 days) after receipt of the Special Servicer's Fair Value Determination, together with the Appraisal and other information contemplated in the next sentence); PROVIDED that, if the Master Servicer is also acting as, or is an Affiliate of, the Special Servicer, then the Trustee, instead of the Master Servicer, shall so confirm the Special Servicer's Fair Value Determination. In such event, the Special Servicer shall promptly deliver to the Master Servicer or the Trustee, as applicable in accordance with the foregoing sentence, the most recent Appraisal in respect of the related Mortgaged Property then in the Special Servicer's possession, together with such other third-party reports (including any determination of an Independent real estate expert) and other information then in the Special Servicer's possession that the Master Servicer or Trustee reasonably believes to be relevant to the Master Servicer's or Trustee's, as the case may be, confirmation of the Special Servicer's Fair Value Determination with respect to such Mortgage Loan, including information regarding any change in circumstances regarding the related Mortgaged Property known to the Special Servicer that has occurred subsequent to, and that would materially affect the value of the related Mortgaged Property reflected in, the most recent Appraisal of the related Mortgaged Property in the related Servicing File. Notwithstanding the foregoing, and if the Special Servicer has not already done so, the Master Servicer or the Trustee, as the case may be, may (at its option) designate a qualified Independent expert in real estate or commercial mortgage loan matters with at least five years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan, selected with reasonable care by the Master Servicer or the Trustee, as the case may be, to confirm that the Special Servicer's Fair Value Determination is consistent with or greater than what the Independent expert considers to be the fair value of such Mortgage Loan. If the Master Servicer, the Trustee or the Special Servicer designates such an Independent expert to make such determination in accordance with this paragraph, the Master Servicer or Trustee, as the case may be, shall be entitled to rely upon such Independent expert's determination. The reasonable costs of all third party opinions of value and any appraisals and inspection reports incurred by the Master Servicer or Trustee, as the case may be, pursuant to this paragraph shall be advanced by the Master Servicer or Trustee, as the case may be, and shall constitute, and be reimbursable as, Servicing Advances. In addition, the Master Servicer or the Trustee, as the case may be, shall be entitled to receive out of the Collection Account a $__________ fee for the initial confirmation of the Special Servicer's Fair Value Determination (but no fee for any subsequent confirmation of the Special Servicer's Fair Value Determination required by SECTION 3.18(C)(VI) below) that is made by it with respect to any Specially Designated Defaulted Mortgage Loan, in accordance with this SECTION 3.18(B). -152-
(c) The Majority Promptly following its determination of the Fair Value of any Specially Designated Defaulted Mortgage Loan in accordance with SECTION 3.18(B), the Special Servicer shall deliver to the Master Servicer and the Trustee an Officer's Certificate setting forth such Fair Value Determination. Within five Business Days of the Special Servicer's providing the Trustee with the Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Mortgage Loan in accordance with SECTION 3.18(B), the Trustee shall promptly notify all of the Controlling Class Certificateholder(s) Certificateholders of such Fair Value Determination. Upon being informed of the Special Servicer's initial Fair Value Determination with respect to any Specially Designated Defaulted Mortgage Loan, any single Holder or any assignee thereof group of Holders of Certificates representing a majority of the Voting Rights allocated to the Controlling Class may, at its or their option, purchase such Mortgage Loan from the Trust any Specially Designated Defaulted Pooled Mortgage Loan (such option, the "Purchase Option")Trust, at a cash price (the "Option Price") equal to the Special Servicer's determination of Fair Value of for such Mortgage Loan (as most recently determined by the Special Servicer and reported to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer as provided in Section 3.18(b) above) or, if no such Fair Value has yet been established as provided in Section 3.18(b) above or if the Special Servicer is in the process of redetermining such Fair Value because of a change in circumstances, equal to the Purchase PriceLoan; provided PROVIDED that:
(i) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan foregoing purchase option will remain in effect last only for until the period (the "Option Period") that commences on the date that such Mortgage Loan first becomes a Specially Designated Defaulted Pooled Mortgage Loan and ends on the earlier earliest of (A) the date on which such Mortgage Loan becomes a Corrected Serviced Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted Pooled Mortgage Loan and at least 60 days' delinquent, (B) the date on which a Liquidation Event occurs with respect to such Pooled Mortgage Loan or the related Mortgaged Property becomes an REO Property, and (C) the second anniversary of the date on which such Mortgage Loan first became a Specially Designated Defaulted Mortgage Loan (the period during which any Specially Designated Defaulted Mortgage Loan is eligible for purchase pursuant to this SECTION 3.18(C) is herein referred to as the "PURCHASE OPTION PERIOD" for such Mortgage Loan);
(ii) any single Holder or group of Holders of Certificates representing a majority of the Purchase Option with respect Voting Rights allocated to any Specially Designated Defaulted Pooled Mortgage Loan shall be assignable by the Majority Controlling Class Certificateholder(s) during may assign the Option Period foregoing option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the parties hereto are notified in writing of the assignmentparty;
(iii) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is foregoing purchase option has not been exercised by any single Holder or group of Holders of Certificates representing a majority of the Majority Voting Rights allocated to the Controlling Class Certificateholder(s) or any assignee thereof within 60 days after by the Fair Value 60th day of such Mortgage Loan has initially been established as provided in Section 3.18(b) abovethe applicable Purchase Option Period, then the Majority Controlling Class Certificateholder(s) foregoing purchase option shall automatically be deemed to have assigned such Purchase Optionassigned, for a 30-day period only, to the Special Servicer;
(iv) at any time during the 30-day period following referred to in the assignment immediately preceding CLAUSE (III), the Special Servicer may exercise the foregoing purchase option or, for the remainder of such 30-day period, may assign the foregoing purchase option to any third party;
(v) if the foregoing purchase option has not been exercised by the Special Servicer or any assignee thereof during the 30-day period referred to in the immediately preceding CLAUSES (III) and (IV), then the foregoing purchase option shall automatically revert to the Holder or group of Holders of Certificates representing a majority of the Voting Rights allocated to the Controlling Class, who will again have the option of assigning the foregoing purchase option to any third party;
(vi) if any single Holder or group of Holders of Certificates representing a majority of the Voting Rights allocated to the Controlling Class or any assignee thereof desires to exercise the foregoing purchase option more than three months after the Special Servicer's most recent Fair Value Determination with respect to the subject Specially Designated Defaulted Mortgage Loan, then the Special Servicer shall, in accordance with SECTION 3.18(B), redetermine (and the Master Servicer or Trustee, as applicable, shall, in accordance with SECTION 3.18(B), if necessary, reconfirm the Special Servicer's determination of) the Fair Value of the subject Specially Designated Defaulted Mortgage Loan, which redetermined (and, if necessary, reconfirmed) Fair Value shall thereafter become the new price for the foregoing purchase option; and
(vii) if, and for so long as, the Depositor and/or its Affiliates and agents, or any Mortgage Loan Seller and/or its Affiliates and agents, shall at any time be the Majority Controlling Class Certificateholder(s), then the Depositor or such Mortgage Loan Seller may, solely as to itself and its Affiliates and agents, waive the right to exercise the foregoing purchase option as to any particular Serviced Mortgage Loan by delivering written notice to that effect to the Trustee, the Master Servicer and the Special Servicer at any time prior to, or within 15 days following, such Mortgage Loan's becoming a Specially Designated Defaulted Mortgage Loan (it being understood and agreed that such waiver shall be made on a loan-by-loan basis, shall not affect the right of the Depositor and/or its Affiliates and agents, or such Mortgage Loan Seller and/or its Affiliates and agents, as the case may be, to assign the foregoing purchase option with respect to the subject Mortgage Loan to an independent third party and shall remain in effect only until the Depositor and/or its Affiliates and agents, or such Mortgage Loan Seller and/or its Affiliates and agents, as the case may be, are no longer the Majority Controlling Class Certificateholder(s). Exercise of the purchase option in respect of any Specially Designated Defaulted Mortgage Loan in accordance with this SECTION 3.18(C) shall be effected by giving written notice to that effect to the Trustee, the Master Servicer and, unless it is the party exercising such purchase option, the Special Servicer. The price payable for any Specially Designated Defaulted Mortgage Loan purchased under this SECTION 3.18(C) must be delivered to the Master Servicer within 15 days of the prospective purchaser's delivery of such notice (or, if later, within 15 days of the determination and, if necessary, confirmation of, any updated Fair Value of such Specially Designated Defaulted Mortgage Loan in accordance with SECTION 3.18(C)(VI) above) or such exercise of the purchase option for such Specially Designated Defaulted Mortgage Loan shall be void. The Special Servicer shall act on behalf of the Trust in taking all actions necessary and appropriate in connection with the sale of any Specially Designated Defaulted Mortgage Loan pursuant to this SECTION 3.18(C) and the collection of all amounts payable in connection therewith. The price payable for any Specially Designated Defaulted Mortgage Loan purchased under this SECTION 3.18(C) shall be deposited into the Collection Account. Upon its receipt of an Officer's Certificate from the Master Servicer to the effect that such deposit has been made, the Trustee shall release or cause to be released to or at the direction of the purchaser, the related Mortgage File, and the Trustee or the Master Servicer on behalf of the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as shall be provided to it by the purchaser and are reasonably necessary to vest in the purchaser or any designee thereof the ownership of such Mortgage Loan. In connection with any such purchase by any Person other than it, the Special Servicer shall deliver the related Servicing File to or at the direction of the Purchase Option purchaser. Any sale of a Specially Designated Defaulted Mortgage Loan pursuant to this SECTION 3.18(C) shall be on a servicing released basis. Nothing in this SECTION 3.18(C) is intended to prevent, impair or delay the Special Servicer or the Master Servicer from taking any action permitted to be taken thereby with respect to any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall be entitled to exercise such Purchase Option or to assign such Purchase Option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18)pursuant to, provided that the other parties hereto are notified in writing of the assignment;
(v) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Special Servicer or its assignee within the 30-day period following the assignment of such Purchase Option to the Special Servicer as contemplated by clause (iii) above, then such Purchase Option will automatically revert to the Majority Controlling Class Certificateholder(s); and
(vi) prior to any exercise of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by the Special Servicer or any Affiliate thereof, subject to the following paragraph, the Trustee shall confirm and report to the applicable Master Servicer, the Certificate Administrator and the Special Servicer that the Special Servicer's determination of the Fair Value of such Mortgage Loan is consistent with or greater than what the Trustee considers to be the Fair Value of such Mortgage Loan; provided that the Special Servicer may, at its own expense, revise any such Fair Value determination that is rejected by the Trustee, it being understood and agreed that such revised Fair Value determination will likewise be subject to confirmation in accordance with this clause (vi). Notwithstanding anything contained in clause (vi) of the preceding paragraph to the contrary, if the Trustee is required to confirm or reject the Special Servicer's Fair Value determination as contemplated by such clause (vi), the Trustee may (at its option and at the expense of the Trust Fund) designate an Independent third party expert in real estate or commercial mortgage loan matters with at least 5 years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Pooled Mortgage Loan, that has been selected with reasonable care by the Trustee to confirm that the Special Servicer's Fair Value determination as contemplated by such clause (vi) is consistent with or greater than what the Independent third party considers to be the Fair Value of such Mortgage Loan. In the event that the Trustee designates such a third party to make such determination, the Trustee shall be entitled to rely upon such third party's determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Trustee or any such third party pursuant to this paragraph or clause (vi) of the preceding paragraph shall be advanced by the applicable Master Servicer and shall constitute, and be reimbursable as, Servicing Advances; provided that, the Trustee shall not so engage a third party expert whose fees exceed a commercially reasonable sum as determined by the Trustee. The Special Servicer shall provide the Trustee with all information that the Special Servicer utilized in determining the Fair Value that is being confirmed. Any party entitled to do so may exercise the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by providing to the Certificate Administrator, the Trustee, the applicable Master Servicer and the Special Servicer:
(i) written notice of its intention to purchase such Mortgage Loan at the Option Price; and
(ii) if such party is the assignee of the Special Servicer or the Majority Controlling Class Certificateholder(s), evidence of its right to exercise such Purchase Option. The actual purchase of such Specially Designated Defaulted Pooled Mortgage Loan shall occur (by delivery of cash in the amount of the applicable Option Price to the Special Servicer for deposit in the applicable Master Servicer's Collection Account) no later than ten days after the later of (i) such exercise of the Purchase Option with respect to such Mortgage Loan and (ii) if applicable, the confirmation of the Special Servicer's Fair Value determination with respect to such Mortgage Loan in accordance with clause (vi) of the first paragraph of this Section 3.18(c) and/or in accordance with the second paragraph of this Section 3.18(c). If any Person to which the Purchase Option has been assigned as provided above exercises the Purchase Option but fails to consummate the actual purchase of the Specially Designated Defaulted Pooled Mortgage Loan in accordance with the preceding sentence, then the Purchase Option shall automatically thereupon be reinstated, revert to and be exercisable by the Controlling Class Representative or the Special Servicer, as applicable. Notwithstanding the Purchase Option provided for in this Section 3.18(c), the Special Servicer shall proceed in respect of any Specially Designated Defaulted Pooled Mortgage Loan in accordance with Section 3.09 and/or Section 3.20, without regard to such Purchase Option. In no event shall there be a Purchase Option hereunder concurrently with respect to a Non-Trust-Serviced Pooled Mortgage Loan. However, in the event of the exercise of a similar option under the related Non-Trust Servicing Agreement and/or pursuant to the related Specially Designated Defaulted Mortgage Loan Group Intercreditor Agreement, the Trustee shall sell such Non-Trust-Serviced Pooled Mortgage Loan in accordance with such agreement.
(d) The Special Servicer shall use its reasonable efforts, consistent with the Servicing Standard, without regard to solicit cash bids for each Administered REO Property in such manner as will be reasonably likely to realize a fair price (determined pursuant to Section 3.18(e) below) for any Administered REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period provided for by Section 3.16(a)). The Special Servicer shall accept the first (and, if multiple cash bids are received by a specified bid date, the highest) cash bid received from any Person that constitutes a fair price (determined pursuant to Section 3.18(e) below) for such Administered REO Property. If the Special Servicer reasonably believes that it will be unable to realize a fair price (determined pursuant to Section 3.18(e) below) with respect to any Administered REO Property within the time constraints imposed by Section 3.16(a), then the Special Servicer shall, consistent with the Servicing Standard, dispose this SECTION 3
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Citigroup Mortgage Loan Trust Inc)
Fair Value Option; Sale of Administered REO Properties. Sale of the Non-Trust- Serviced Pooled Mortgage LoanLoans.
(a) The applicable Master Servicer, the Special Servicer or the Trustee may sell or purchase, or permit the sale or purchase of, a Pooled Mortgage Loan or REO Property (or, in the case of any REO Property related to a Mortgage Loan Group, such REO Property and/or the beneficial interest of the Trust Fund in such REO Property) only (i) on the terms and subject to the conditions set forth in this Section 3.18, (ii) as otherwise expressly provided in or contemplated by Sections 2.03 and 9.01 of this Agreement, (iii) in the case of a Pooled Mortgage Loan (or REO Property related thereto) with a related mezzanine loan, in connection with a Mortgage Loan default if and as set forth in the related intercreditor agreement, agreement or (iv) in the case of a Pooled Mortgage Loan (or REO Property related thereto) included in a Serviced Mortgage Loan Group, in connection with a Mortgage Loan default if and as set forth in the related Mortgage Loan Group Intercreditor Agreement, or (v) in the case of a Non-Trust-Serviced Pooled Mortgage Loan (or REO Property related thereto), pursuant to a purchase option (if any) under the related Mortgage Loan Group Intercreditor Agreement and/or the related Non-Trust Servicing Agreement.
(b) If any Pooled Mortgage Loan becomes a Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall so notify the Certificate Administrator, the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class (and, if the affected Pooled Mortgage Loan is included in a Serviced Mortgage Loan Group that includes one or more Serviced Non-Pooled Subordinate Loans, the related Non-Pooled Noteholder(s))Class, in writing. In addition, the Special Servicer shall determine (in accordance with the Servicing Standard, taking into account the considerations contemplated by the following paragraph, but without regard to the Purchase Option provided for in Section 3.18(c) below), and report to the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class, the Fair Value of such Pooled Mortgage Loan. The Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan shall be made as soon as reasonably practicable, but in no event later than 30 days after the Special Servicer receives the requisite Appraisal or any other third-party reports that it deems necessary to make the determination. If at any time the Special Servicer becomes aware of any circumstances or conditions that have occurred or arisen with respect to any Specially Designated Defaulted Pooled Mortgage Loan or the related Mortgaged Property subsequent to, and that would, in the Special Servicer's reasonable judgment, materially affect, the Special Servicer's most recent Fair Value determination with respect to such Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall redetermine (in a manner as is permitted above, but taking into account any such new circumstances or conditions known to the Special Servicer), and report to the Certificate Administrator, the Trustee, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan. In addition, if the Special Servicer has not accepted a bid at the Fair Value of the Mortgage Loan, as most recently determined by the Special Servicer, prior to the expiration of 90 days from such determination, and thereafter the Special Servicer receives a bid at such Fair Value or a request from a holder of the Purchase Option for an updated determination of the Fair Value of the Mortgage Loan, the Special Servicer shall redetermine (in the same manner as provided above, but taking into account any such new circumstances or conditions known to the Special Servicer), and report to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan; provided, however, that the Special Servicer may rely on the existing third-party information if it deems such reliance to be reasonable. In determining the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the related Mortgaged Property is located, and the time and expense associated with and the expected recovery from a purchaser's foreclosing on the related Mortgaged Property or working out such Mortgage Loan. In addition, the Special Servicer shall refer to all relevant information contained in the Servicing File, shall take into account the most recent Appraisal obtained or conducted with respect to the related Mortgaged Property in the preceding 12-month period in accordance with this Agreement and shall not determine the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan without such an Appraisal; provided that the Special Servicer shall take account of any change in the circumstances regarding or the condition of the related Mortgaged Property actually known to the Special Servicer that has occurred or arisen subsequent to, and that would materially affect the value of the related Mortgaged Property reflected in, such Appraisal. Furthermore, the Special Servicer may shall consider available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The Special Servicer may, to the extent it is reasonable to do so in accordance with the Servicing Standard, conclusively rely on any opinions or reports of qualified Independent third parties expert in real estate or commercial mortgage loan matters with at least 5 years experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan in making such determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Special Servicer pursuant to this Section 3.18(b) shall constitute, and be reimbursable as, Servicing Advances. The other parties to this Agreement shall cooperate with all reasonable requests for information made by the Special Servicer in order to allow the Special Servicer to perform its duties pursuant to this Section 3.18(b). Notwithstanding the foregoing, no Fair Value shall be determined under this Agreement with respect to a the Non-Trust-Serviced Pooled Mortgage Loan.
(c) The Majority Controlling Class Certificateholder(s) or any assignee thereof may, at its or their option, purchase from the Trust any Specially Designated Defaulted Pooled Mortgage Loan (such option, the "Purchase Option"), at a cash price (the "Option Price") equal to the Fair Value of such Mortgage Loan (as most recently determined by the Special Servicer and reported to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer as provided in Section 3.18(b) above) or, if no such Fair Value has yet been established as provided in Section 3.18(b) above or if the Special Servicer is in the process of redetermining such Fair Value because of a change in circumstances, equal to the Purchase Price; provided that:
(i) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan will remain in effect only for the period (the "Option Period") that commences on the date that such Mortgage Loan first becomes a Specially Designated Defaulted Pooled Mortgage Loan and ends on the earlier of (A) the date on which such Mortgage Loan becomes a Corrected Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted Pooled Mortgage Loan and (B) the date on which a Liquidation Event occurs with respect to such Pooled Mortgage Loan or the related Mortgaged Property becomes an REO Property;
(ii) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan shall be assignable by the Majority Controlling Class Certificateholder(s) during the Option Period to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the parties hereto are notified in writing of the assignment;
(iii) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Majority Controlling Class Certificateholder(s) or any assignee thereof within 60 days after the Fair Value of such Mortgage Loan has initially been established as provided in Section 3.18(b) above, then the Majority Controlling Class Certificateholder(s) shall be deemed to have assigned such Purchase Option, for a 30-day period only, to the Special Servicer;
(iv) during the 30-day period following the assignment to it of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall be entitled to exercise such Purchase Option or to assign such Purchase Option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the other parties hereto are notified in writing of the assignment;
(v) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Special Servicer or its assignee within the 30-day period following the assignment of such Purchase Option to the Special Servicer as contemplated by clause (iii) above, then such Purchase Option will automatically revert to the Majority Controlling Class Certificateholder(s); and
(vi) prior to any exercise of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by the Special Servicer or any Affiliate thereof, subject to the following paragraph, the Trustee shall confirm and report to the applicable Master Servicer, the Certificate Administrator and the Special Servicer that the Special Servicer's determination of the Fair Value of such Mortgage Loan is consistent with or greater than what the Trustee considers to be the Fair Value of such Mortgage Loan; provided that the Special Servicer may, at its own expense, revise any such Fair Value determination that is rejected by the Trustee, it being understood and agreed that such revised Fair Value determination will likewise be subject to confirmation in accordance with this clause (vi). Notwithstanding anything contained in clause (vi) of the preceding paragraph to the contrary, if the Trustee is required to confirm or reject the Special Servicer's Fair Value determination as contemplated by such clause (vi), the Trustee may (at its option and at the expense of the Trust Fund) designate an Independent third party expert in real estate or commercial mortgage loan matters with at least 5 years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Pooled Mortgage Loan, that has been selected with reasonable care by the Trustee to confirm that the Special Servicer's Fair Value determination as contemplated by such clause (vi) is consistent with or greater than what the Independent third party considers to be the Fair Value of such Mortgage Loan. In the event that the Trustee designates such a third party to make such determination, the Trustee shall be entitled to rely upon such third party's determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Trustee or any such third party pursuant to this paragraph or clause (vi) of the preceding paragraph shall be advanced by the applicable Master Servicer and shall constitute, and be reimbursable as, Servicing Advances; provided that, the Trustee shall not so engage a third party expert whose fees exceed a commercially reasonable sum as determined by the Trustee. The Special Servicer shall provide the Trustee with all information that the Special Servicer utilized in determining the Fair Value that is being confirmed. Any party entitled to do so may exercise the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by providing to the Certificate Administrator, the Trustee, the applicable Master Servicer and the Special Servicer:
(i) written notice of its intention to purchase such Mortgage Loan at the Option Price; and
(ii) if such party is the assignee of the Special Servicer or the Majority Controlling Class Certificateholder(s), evidence of its right to exercise such Purchase Option. The actual purchase of such Specially Designated Defaulted Pooled Mortgage Loan shall occur (by delivery of cash in the amount of the applicable Option Price to the Special Servicer for deposit in the applicable Master Servicer's Collection Account) no later than ten days after the later of (i) such exercise of the Purchase Option with respect to such Mortgage Loan and (ii) if applicable, the confirmation of the Special Servicer's Fair Value determination with respect to such Mortgage Loan in accordance with clause (vi) of the first paragraph of this Section 3.18(c) and/or in accordance with the second paragraph of this Section 3.18(c). If any Person to which the Purchase Option has been assigned as provided above exercises the Purchase Option but fails to consummate the actual purchase of the applicable Specially Designated Defaulted Pooled Mortgage Loan in accordance with the preceding sentence, then the Purchase Option shall automatically thereupon be reinstated, revert to and be exercisable by the Controlling Class Representative or the Special Servicer, as applicable. Notwithstanding the Purchase Option provided for in this Section 3.18(c), the Special Servicer shall proceed in respect of any Specially Designated Defaulted Pooled Mortgage Loan in accordance with Section 3.09 and/or Section 3.20, without regard to such Purchase Option. In no event shall there be a Purchase Option hereunder with respect to a the Non-Trust-Serviced Pooled Mortgage Loan. However, in the event of the exercise of a similar option under the related Non-Trust Servicing Agreement and/or pursuant to the related Mortgage Loan Group Intercreditor Agreement, the Trustee shall sell such Non-Trust-Serviced Pooled Mortgage Loan in accordance with such agreement.
(d) The Special Servicer shall use its reasonable efforts, consistent with the Servicing Standard, to solicit cash bids for each Administered REO Property in such manner as will be reasonably likely to realize a fair price (determined pursuant to Section 3.18(e) below) for any Administered REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period provided for by Section 3.16(a)). The Special Servicer shall accept the first (and, if multiple cash bids are received by a specified bid date, the highest) cash bid received from any Person that constitutes a fair price (determined pursuant to Section 3.18(e) below) for such Administered REO Property. If the Special Servicer reasonably believes that it will be unable to realize a fair price (determined pursuant to Section 3.18(e) below) with respect to any Administered REO Property within the time constraints imposed by Section 3.16(a), then the Special Servicer shall, consistent with the Servicing Standard, dispose of such REO Property upon such terms and conditions as it shall deem necessary and desirable to maximize the recovery thereon under the circumstances. The Special Servicer shall give the Certificate Administrator, the Trustee, the applicable Master Servicer and the Controlling Class Representative not less than five (5) Business Days' prior written notice of its intention to sell any Administered REO Property pursuant to this Section 3
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2004-Pwr6)
Fair Value Option; Sale of Administered REO Properties. Sale of the Non-Trust- Serviced Pooled Mortgage Loan.
(a) The applicable Master Servicer, the Special Servicer or the Trustee parties hereto may sell or purchase, or permit the sale or purchase of, a Pooled Mortgage Loan or Administered REO Property (or, in the case of any REO Property related to a Mortgage Loan Group, such REO Property and/or the beneficial interest of the Trust Fund in such REO Property) only (i) on the terms and subject to the conditions set forth in this Section 3.18, (ii) 3.18 or as otherwise expressly provided in or contemplated by Sections 2.03 and Section 2.03, Section 9.01 of this Agreementand/or the related Mortgage Loan Documents (including, (iii) in the case of a Pooled Mortgage Loan (or REO Property related thereto) with a related mezzanine loan, in connection with a Mortgage Loan default if and as set forth in the related intercreditor agreement, (iv) in the case of a Pooled Mortgage Loan (or REO Property related thereto) included in a [Separately Serviced Mortgage Loan GroupLoan], in connection with a the [Separately Serviced Mortgage Loan default if and as set forth in the related Mortgage Loan Group Loan] Intercreditor Agreement, or (v) in the case of a Non-Trust-Serviced Pooled Mortgage Loan (or REO Property related theretoAgreements), pursuant to a purchase option under the related Mortgage Loan Group Intercreditor Agreement and/or the related Non-Trust Servicing Agreement.
(b) If any Pooled Serviced Mortgage Loan becomes a Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall promptly so notify the Certificate Administrator, the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class (and, if the affected Pooled Mortgage Loan is included in a Serviced Mortgage Loan Group that includes one or more Serviced Non-Pooled Subordinate Loans, the related Non-Pooled Noteholder(s)), in writing. In addition, the Special Servicer shall determine (in accordance with the Servicing Standard, taking into account the considerations contemplated by the following paragraph, but without regard to the Purchase Option provided for in Section 3.18(c) below), and report to the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class, the Fair Value of such Pooled Mortgage Loan. The Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan shall be made as soon as reasonably practicable, but in no event later than 30 days after the Special Servicer receives the requisite Appraisal or any other third-party reports that it deems necessary to make the determination. If at any time the Special Servicer becomes aware of any circumstances or conditions that have occurred or arisen with respect to any Specially Designated Defaulted Pooled Mortgage Loan or the related Mortgaged Property subsequent to, and that would, in the Special Servicer's reasonable judgment, materially affect, the Special Servicer's most recent Fair Value determination with respect to such Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall redetermine (in a manner as is permitted above, but taking into account any such new circumstances or conditions known to the Special Servicer), and report to the Certificate Administrator, writing the Trustee, the Controlling Class Representative and the applicable Master Servicer Servicer, and shall concurrently, or as soon as reasonably practical (and the Certificate Administrator shalland, in turnany event, report within 30 days) thereafter, make a Fair Value Determination with respect to such Mortgage Loan based on the most recent Appraisal in respect of the related Mortgaged Property then in the Special Servicer's possession, together with such other third-party reports and other information then in the Special Servicer's possession that the Special Servicer reasonably believes to be relevant to the Holder(s) Special Servicer's Fair Value Determination with respect to such Mortgage Loan, including information regarding any change in circumstances regarding the related Mortgaged Property known to the Special Servicer that has occurred subsequent to, and that would materially affect the value of the Controlling Class)related Mortgaged Property reflected in, the updated Fair Value most recent Appraisal of the subject Specially Designated Defaulted Pooled Mortgage Loan. In additionrelated Mortgaged Property in the related Servicing File; provided that, if the Special Servicer has not accepted is then in the process of obtaining a bid at the Fair Value of the Mortgage Loan, as most recently determined by the Special Servicer, prior new Appraisal with respect to the expiration of 90 days from such determinationrelated Mortgaged Property pursuant to Section 3.19(c), and thereafter the Special Servicer receives a bid at such Fair Value or a request from a holder of the Purchase Option for an updated determination of the Fair Value of the Mortgage Loan, then the Special Servicer shall redetermine make its Fair Value Determination with respect to such Mortgage Loan in accordance with the Servicing Standard as soon as reasonably practicable (but in the same manner as provided above, but taking into account any such new circumstances or conditions known to event within 30 days) after the Special Servicer), and report to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) 's receipt of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan; provided, however, that the Special Servicer may rely on the existing third-party information if it deems such reliance to be reasonablenew Appraisal. In determining the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy and the commercial real estate market in the area where the related Mortgaged Property is located, and the time and expense associated with and the expected recovery from a purchaser's foreclosing on the related Mortgaged Property or working out such Mortgage Loan. In addition, but shall ignore the Special Servicer shall refer to relevant information contained in the Servicing File, shall take into account the most recent Appraisal obtained or conducted with respect to the related Mortgaged Property in the preceding 12-month period in accordance with this Agreement and shall not determine the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan without such an Appraisal; provided that the Special Servicer shall take account of any change in the circumstances regarding or the condition of the related Mortgaged Property actually known to the Special Servicer that has occurred or arisen subsequent to, and that would materially affect the value of the related Mortgaged Property reflected in, such Appraisal. Furthermore, the Special Servicer may consider available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The Special Servicer may, to the extent it is reasonable to do so in accordance with the Servicing Standard, conclusively rely on any opinions or reports of qualified Independent third parties expert in real estate or commercial mortgage loan matters with at least 5 years experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan in making such determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Special Servicer pursuant to this Section 3.18(b) shall constitute, and be reimbursable as, Servicing Advances. The other parties to this Agreement shall cooperate with all reasonable requests for information made by the Special Servicer in order to allow the Special Servicer to perform its duties pursuant to this Section 3.18(b). Notwithstanding the foregoing, no Fair Value shall be determined under this Agreement with respect to a Non-Trust-Serviced Pooled Mortgage Loan.
(c) The Majority Controlling Class Certificateholder(s) or any assignee thereof may, at its or their option, purchase from the Trust any Specially Designated Defaulted Pooled Mortgage Loan (such option, the "Purchase Option"), at a cash price (the "Option Price") equal to the Fair Value of such Mortgage Loan (as most recently determined by the Special Servicer and reported to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer as provided in Section 3.18(b) above) or, if no such Fair Value has yet been established as provided in Section 3.18(b) above or if the Special Servicer is in the process of redetermining such Fair Value because of a change in circumstances, equal to the Purchase Price; provided that:
(i) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan will remain in effect only for the period (the "Option Period") that commences on the date that such Mortgage Loan first becomes a Specially Designated Defaulted Pooled Mortgage Loan and ends on the earlier of (A) the date on which such Mortgage Loan becomes a Corrected Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted Pooled Mortgage Loan and (B) the date on which a Liquidation Event occurs with respect to such Pooled Mortgage Loan or the related Mortgaged Property becomes an REO Property;
(ii) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan shall be assignable by the Majority Controlling Class Certificateholder(s) during the Option Period to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the parties hereto are notified in writing of the assignment;
(iii) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Majority Controlling Class Certificateholder(s) or any assignee thereof within 60 days after the Fair Value of such Mortgage Loan has initially been established as provided in Section 3.18(b) above, then the Majority Controlling Class Certificateholder(s) shall be deemed to have assigned such Purchase Option, for a 30-day period only, to the Special Servicer;
(iv) during the 30-day period following the assignment to it of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall be entitled to exercise such Purchase Option or to assign such Purchase Option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the other parties hereto are notified in writing of the assignment;
(v) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Special Servicer or its assignee within the 30-day period following the assignment of such Purchase Option to the Special Servicer as contemplated by clause (iii) above, then such Purchase Option will automatically revert to the Majority Controlling Class Certificateholder(s); and
(vi) prior to any exercise of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by the Special Servicer or any Affiliate thereof, subject to the following paragraph, the Trustee shall confirm and report to the applicable Master Servicer, the Certificate Administrator and the Special Servicer that the Special Servicer's determination of the Fair Value of such Mortgage Loan is consistent with or greater than what the Trustee considers to be the Fair Value of such Mortgage Loan; provided that the Special Servicer may, at its own expense, revise any such Fair Value determination that is rejected by the Trustee, it being understood and agreed that such revised Fair Value determination will likewise be subject to confirmation in accordance with this clause (vi). Notwithstanding anything contained in clause (vi) of the preceding paragraph to the contrary, if the Trustee is required to confirm or reject the Special Servicer's Fair Value determination as contemplated by such clause (vi), the Trustee may (at its option and at the expense of the Trust Fund) designate an Independent third party expert in real estate or commercial mortgage loan matters with at least 5 years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Pooled Mortgage Loan, that has been selected with reasonable care by the Trustee to confirm that the Special Servicer's Fair Value determination as contemplated by such clause (vi) is consistent with or greater than what the Independent third party considers to be the Fair Value of such Mortgage Loan. In the event that the Trustee designates such a third party to make such determination, the Trustee shall be entitled to rely upon such third party's determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Trustee or any such third party pursuant to this paragraph or clause (vi) of the preceding paragraph shall be advanced by the applicable Master Servicer and shall constitute, and be reimbursable as, Servicing Advances; provided that, the Trustee shall not so engage a third party expert whose fees exceed a commercially reasonable sum as determined by the Trustee. The Special Servicer shall provide the Trustee with all information that the Special Servicer utilized in determining the Fair Value that is being confirmed. Any party entitled to do so may exercise the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by providing to the Certificate Administrator, the Trustee, the applicable Master Servicer and the Special Servicer:
(i) written notice of its intention to purchase such Mortgage Loan at the Option Price; and
(ii) if such party is the assignee of the Special Servicer or the Majority Controlling Class Certificateholder(s), evidence of its right to exercise such Purchase Option. The actual purchase of such Specially Designated Defaulted Pooled Mortgage Loan shall occur (by delivery of cash in the amount of the applicable Option Price to the Special Servicer for deposit in the applicable Master Servicer's Collection Account) no later than ten days after the later of (i) such exercise of the Purchase Option with respect to such Mortgage Loan and (ii) if applicable, the confirmation of the Special Servicer's Fair Value determination with respect to such Mortgage Loan in accordance with clause (vi) of the first paragraph of this Section 3.18(c) and/or in accordance with the second paragraph of this Section 3.18(c). If any Person to which the Purchase Option has been assigned as provided above exercises the Purchase Option but fails to consummate the actual purchase of the Specially Designated Defaulted Pooled Mortgage Loan in accordance with the preceding sentence, then the Purchase Option shall automatically thereupon be reinstated, revert to and be exercisable by the Controlling Class Representative or the Special Servicer, as applicable. Notwithstanding the Purchase Option provided for in this Section 3.18(c), the Special Servicer shall proceed in respect of any Specially Designated Defaulted Pooled Mortgage Loan in accordance with Section 3.09 and/or Section 3.20, without regard to such Purchase Option. In no event shall there be a Purchase Option hereunder with respect to a Non-Trust-Serviced Pooled Mortgage Loan. However, in the event of the exercise of a similar option under the related Non-Trust Servicing Agreement and/or pursuant to the related Mortgage Loan Group Intercreditor Agreement, the Trustee shall sell such Non-Trust-Serviced Pooled Mortgage Loan in accordance with such agreement.
(d) The Special Servicer shall use its reasonable efforts, consistent with the Servicing Standard, to solicit cash bids for each Administered REO Property in such manner as will be reasonably likely to realize a fair price (determined pursuant to Section 3.18(e) below) for any Administered REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period provided for by Section 3.16(a)). The Special Servicer shall accept the first (and, if multiple cash bids are received by a specified bid date, the highest) cash bid received from any Person that constitutes a fair price (determined pursuant to Section 3.18(e) below) for such Administered REO Property. If the Special Servicer reasonably believes that it will be unable to realize a fair price (determined pursuant to Section 3.18(e) below) with respect to any Administered REO Property within the time constraints imposed by Section 3.16(a), then the Special Servicer shall, consistent with the Servicing Standard, dispose in
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Citigroup Commercial Mortgage Securities Inc)
Fair Value Option; Sale of Administered REO Properties. Sale of the Non-Trust- Serviced Pooled Mortgage Loan.
(a) The applicable Master Servicer, the applicable Special Servicer or the Trustee may sell or purchase, or permit the sale or purchase of, a Pooled Mortgage Loan or REO Property (or, in the case of any REO Property related to a Mortgage Loan Group, such REO Property and/or the beneficial interest of the Trust Fund in such REO Property) only (i) on the terms and subject to the conditions set forth in this Section 3.18, (ii) as otherwise expressly provided in or contemplated by Sections 2.03 and 9.01 of this Agreement, (iii) in the case of a Pooled Mortgage Loan (or REO Property related thereto) with a related mezzanine loan, in connection with a Mortgage Loan default if and as set forth in the related intercreditor agreement, (iv) in the case of a Pooled Mortgage Loan (or REO Property related thereto) included in a Serviced Mortgage Loan Group, in connection with a Mortgage Loan default if and as set forth in the related Mortgage Loan Group Intercreditor Agreement, or (v) in the case of a Non-Trust-Serviced Pooled Mortgage Loan (or REO Property related thereto), pursuant to a purchase option under the related Mortgage Loan Group Intercreditor Agreement and/or the related Non-Trust Servicing Agreement.
(b) If any Pooled Mortgage Loan becomes a Specially Designated Defaulted Pooled Mortgage Loan, then the applicable Special Servicer shall so notify the Certificate Administrator, the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class (and, if the affected Pooled Mortgage Loan is included in a Serviced Mortgage Loan Group that includes one or more Serviced Non-Pooled Subordinate Loans, the related Non-Pooled Noteholder(s)), in writing. In addition, the applicable Special Servicer shall determine (in accordance with the Servicing Standard, taking into account the considerations contemplated by the following paragraph, but without regard to the Purchase Option provided for in Section 3.18(c) below), and report to the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class, the Fair Value of such Pooled Mortgage Loan. The applicable Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan shall be made as soon as reasonably practicable, but in no event later than 30 days after the applicable Special Servicer receives the requisite Appraisal or any other third-party reports that it deems necessary to make the determination. If at any time the applicable Special Servicer becomes aware of any circumstances or conditions that have occurred or arisen with respect to any Specially Designated Defaulted Pooled Mortgage Loan or the related Mortgaged Property subsequent to, and that would, in the applicable Special Servicer's reasonable judgment, materially affect, the applicable Special Servicer's most recent Fair Value determination with respect to such Specially Designated Defaulted Pooled Mortgage Loan, then the applicable Special Servicer shall redetermine (in a manner as is permitted above, but taking into account any such new circumstances or conditions known to the applicable Special Servicer), and report to the Certificate Administrator, the Trustee, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan. In addition, if the applicable Special Servicer has not accepted a bid at the Fair Value of the Mortgage Loan, as most recently determined by the applicable Special Servicer, prior to the expiration of 90 days from such determination, and thereafter the applicable Special Servicer receives a bid at such Fair Value or a request from a holder of the Purchase Option for an updated determination of the Fair Value of the Mortgage Loan, the applicable Special Servicer shall redetermine (in the same manner as provided above, but taking into account any such new circumstances or conditions known to the applicable Special Servicer), and report to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan; provided, however, that the applicable Special Servicer may rely on the existing third-party information if it deems such reliance to be reasonable. In determining the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan, the applicable Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the related Mortgaged Property is located, and the time and expense associated with and the expected recovery from a purchaser's foreclosing on the related Mortgaged Property or working out such Mortgage Loan. In addition, the applicable Special Servicer shall refer to all relevant information contained in the Servicing File, shall take into account the most recent Appraisal obtained or conducted with respect to the related Mortgaged Property in the preceding 12-month period in accordance with this Agreement and shall not determine the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan without such an Appraisal; provided that the applicable Special Servicer shall take account of any change in the circumstances regarding or the condition of the related Mortgaged Property actually known to the applicable Special Servicer that has occurred or arisen subsequent to, and that would materially affect the value of the related Mortgaged Property reflected in, such Appraisal. Furthermore, the applicable Special Servicer may consider available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the applicable Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The applicable Special Servicer may, to the extent it is reasonable to do so in accordance with the Servicing Standard, conclusively rely on any opinions or reports of qualified Independent third parties expert in real estate or commercial mortgage loan matters with at least 5 years experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan in making such determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the applicable Special Servicer pursuant to this Section 3.18(b) shall constitute, and be reimbursable as, Servicing Advances. The other parties to this Agreement shall cooperate with all reasonable requests for information made by the applicable Special Servicer in order to allow the applicable Special Servicer to perform its duties pursuant to this Section 3.18(b). Notwithstanding the foregoing, no Fair Value shall be determined under this Agreement with respect to a Non-Trust-Serviced Pooled Mortgage Loan.
(c) The Majority Controlling Class Certificateholder(s) or any assignee thereof may, at its or their option, purchase from the Trust any Specially Designated Defaulted Pooled Mortgage Loan (such option, the "Purchase Option"), at a cash price (the "Option Price") equal to the Fair Value of such Mortgage Loan (as most recently determined by the applicable Special Servicer and reported to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer as provided in Section 3.18(b) above) or, if no such Fair Value has yet been established as provided in Section 3.18(b) above or if the applicable Special Servicer is in the process of redetermining such Fair Value because of a change in circumstances, equal to the Purchase Price; provided that:
(i) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan will remain in effect only for the period (the "Option Period") that commences on the date that such Mortgage Loan first becomes a Specially Designated Defaulted Pooled Mortgage Loan and ends on the earlier of (A) the date on which such Mortgage Loan becomes a Corrected Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted Pooled Mortgage Loan and (B) the date on which a Liquidation Event occurs with respect to such Pooled Mortgage Loan or the related Mortgaged Property becomes an REO Property;
(ii) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan shall be assignable by the Majority Controlling Class Certificateholder(s) during the Option Period to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the parties hereto are notified in writing of the assignment;
(iii) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Majority Controlling Class Certificateholder(s) or any assignee thereof within 60 days after the Fair Value of such Mortgage Loan has initially been established as provided in Section 3.18(b) above, then the Majority Controlling Class Certificateholder(s) shall be deemed to have assigned such Purchase Option, for a 30-day period only, to the applicable Special Servicer;
(iv) during the 30-day period following the assignment to it of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan, the applicable Special Servicer shall be entitled to exercise such Purchase Option or to assign such Purchase Option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the other parties hereto are notified in writing of the assignment;
(v) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the applicable Special Servicer or its assignee within the 30-day period following the assignment of such Purchase Option to the applicable Special Servicer as contemplated by clause (iii) above, then such Purchase Option will automatically revert to the Majority Controlling Class Certificateholder(s); and
(vi) prior to any exercise of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by the applicable Special Servicer or any Affiliate thereof, subject to the following paragraph, the Trustee shall confirm and report to the applicable Master Servicer, the Certificate Administrator and the applicable Special Servicer that the applicable Special Servicer's determination of the Fair Value of such Mortgage Loan is consistent with or greater than what the Trustee considers to be the Fair Value of such Mortgage Loan; provided that the applicable Special Servicer may, at its own expense, revise any such Fair Value determination that is rejected by the Trustee, it being understood and agreed that such revised Fair Value determination will likewise be subject to confirmation in accordance with this clause (vi). Notwithstanding anything contained in clause (vi) of the preceding paragraph to the contrary, if the Trustee is required to confirm or reject the applicable Special Servicer's Fair Value determination as contemplated by such clause (vi), the Trustee may (at its option and at the expense of the Trust Fund) designate an Independent third party expert in real estate or commercial mortgage loan matters with at least 5 years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Pooled Mortgage Loan, that has been selected with reasonable care by the Trustee to confirm that the applicable Special Servicer's Fair Value determination as contemplated by such clause (vi) is consistent with or greater than what the Independent third party considers to be the Fair Value of such Mortgage Loan. In the event that the Trustee designates such a third party to make such determination, the Trustee shall be entitled to rely upon such third party's determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Trustee or any such third party pursuant to this paragraph or clause (vi) of the preceding paragraph shall be advanced by the applicable Master Servicer and shall constitute, and be reimbursable as, Servicing Advances; provided that, the Trustee shall not so engage a third party expert whose fees exceed a commercially reasonable sum as determined by the Trustee. The applicable Special Servicer shall provide the Trustee with all information that the applicable Special Servicer utilized in determining the Fair Value that is being confirmed. Any party entitled to do so may exercise the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by providing to the Certificate Administrator, the Trustee, the applicable Master Servicer and the applicable Special Servicer:
(i) written notice of its intention to purchase such Mortgage Loan at the Option Price; and
(ii) if such party is the assignee of the applicable Special Servicer or the Majority Controlling Class Certificateholder(s), evidence of its right to exercise such Purchase Option. The actual purchase of such Specially Designated Defaulted Pooled Mortgage Loan shall occur (by delivery of cash in the amount of the applicable Option Price to the applicable Special Servicer for deposit in the applicable Master Servicer's Collection Account) no later than ten days after the later of (i) such exercise of the Purchase Option with respect to such Mortgage Loan and (ii) if applicable, the confirmation of the applicable Special Servicer's Fair Value determination with respect to such Mortgage Loan in accordance with clause (vi) of the first paragraph of this Section 3.18(c) and/or in accordance with the second paragraph of this Section 3.18(c). If any Person to which the Purchase Option has been assigned as provided above exercises the Purchase Option but fails to consummate the actual purchase of the applicable Specially Designated Defaulted Pooled Mortgage Loan in accordance with the preceding sentence, then the Purchase Option shall automatically thereupon be reinstated, revert to and be exercisable by the Controlling Class Representative or the applicable Special Servicer, as applicable. Notwithstanding the Purchase Option provided for in this Section 3.18(c), the applicable Special Servicer shall proceed in respect of any Specially Designated Defaulted Pooled Mortgage Loan in accordance with Section 3.09 and/or Section 3.20, without regard to such Purchase Option. In no event shall there be a Purchase Option hereunder with respect to a Non-Trust-Serviced Pooled Mortgage Loan. However, in the event of the exercise of a similar option under the related Non-Trust Servicing Agreement and/or pursuant to the related Mortgage Loan Group Intercreditor Agreement, the Trustee shall sell such Non-Trust-Serviced Pooled Mortgage Loan in accordance with such agreement.
(d) The applicable Special Servicer shall use its reasonable efforts, consistent with the Servicing Standard, to solicit cash bids for each Administered REO Property in such manner as will be reasonably likely to realize a fair price (determined pursuant to Section 3.18(e) below) for any Administered REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period provided for by Section 3.16(a)). The applicable Special Servicer shall accept the first (and, if multiple cash bids are received by a specified bid date, the highest) cash bid received from any Person that constitutes a fair price (determined pursuant to Section 3.18(e) below) for such Administered REO Property. If the Special Servicer reasonably believes that it will be unable to realize a fair price (determined pursuant to Section 3.18(e) below) with respect to any Administered REO Property within the time constraints imposed by Section 3.16(a), then the Special Servicer shall, consistent with the Servicing Standard, dispose
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Inc)
Fair Value Option; Sale of Administered REO Properties. Sale of the Non-Trust- Trust-Serviced Pooled Mortgage Loan.
(a) The applicable Master Servicer, the applicable Special Servicer or the Trustee may sell or purchase, or permit the sale or purchase of, a Pooled Mortgage Loan or REO Property (or, in the case of any REO Property related to a Mortgage Loan Group, such REO Property and/or the beneficial interest of the Trust Fund in such REO Property) only (i) on the terms and subject to the conditions set forth in this Section 3.18, (ii) as otherwise expressly provided in or contemplated by Sections 2.03 and 9.01 of this Agreement, (iii) in the case of a Pooled Mortgage Loan (or REO Property related thereto) with a related mezzanine loan, in connection with a Mortgage Loan default if and as set forth in the related intercreditor agreement, (iv) in the case of a Pooled Mortgage Loan (or REO Property related thereto) included in a Serviced Mortgage Loan Group, in connection with a Mortgage Loan default if and as set forth in the related Mortgage Loan Group Intercreditor Agreement, or (v) in the case of a Non-Trust-Serviced Pooled Mortgage Loan (or REO Property related thereto), pursuant to a purchase option (if any) under the related Mortgage Loan Group Intercreditor Agreement and/or the related Non-Trust Servicing Agreement.
(b) If any Pooled Mortgage Loan becomes a Specially Designated Defaulted Pooled Mortgage Loan, then the applicable Special Servicer shall so notify the Certificate Administrator, the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class (and, if the affected Pooled Mortgage Loan is included in a Serviced Mortgage Loan Group that includes one or more Serviced Non-Pooled Subordinate Loans, the related Non-Pooled Mortgage Loan Noteholder(s)), in writing. In addition, the applicable Special Servicer shall determine (in accordance with the Servicing Standard, taking into account the considerations contemplated by the following paragraph, but without regard to the Purchase Option provided for in Section 3.18(c) below), and report to the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class, the Fair Value of such Pooled Mortgage Loan. The applicable Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan shall be made as soon as reasonably practicable, but in no event later than 30 days after the applicable Special Servicer receives the requisite Appraisal or any other third-party reports that it deems necessary to make the determination. If at any time the applicable Special Servicer becomes aware of any circumstances or conditions that have occurred or arisen with respect to any Specially Designated Defaulted Pooled Mortgage Loan or the related Mortgaged Property subsequent to, and that would, in the applicable Special Servicer's reasonable judgment, materially affect, the applicable Special Servicer's most recent Fair Value determination with respect to such Specially Designated Defaulted Pooled Mortgage Loan, then the applicable Special Servicer shall redetermine (in a manner as is permitted above, but taking into account any such new circumstances or conditions known to the applicable Special Servicer), and report to the Certificate Administrator, the Trustee, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan. In addition, if the applicable Special Servicer has not accepted a bid at the Fair Value of the Mortgage Loan, as most recently determined by the applicable Special Servicer, prior to the expiration of 90 days from such determination, and thereafter the applicable Special Servicer receives a bid at such Fair Value or a request from a holder of the Purchase Option for an updated determination of the Fair Value of the Mortgage Loan, the applicable Special Servicer shall redetermine (in the same manner as provided above, but taking into account any such new circumstances or conditions known to the applicable Special Servicer), and report to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan; provided, however, that the applicable Special Servicer may rely on the existing third-party information if it deems such reliance to be reasonable. In determining the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan, the applicable Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the related Mortgaged Property is located, and the time and expense associated with and the expected recovery from a purchaser's foreclosing on the related Mortgaged Property or working out such Mortgage Loan. In addition, the applicable Special Servicer shall refer to all relevant information contained in the Servicing File, shall take into account the most recent Appraisal obtained or conducted with respect to the related Mortgaged Property in the preceding 12-month period in accordance with this Agreement and shall not determine the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan without such an Appraisal; provided that the applicable Special Servicer shall take account of any change in the circumstances regarding or the condition of the related Mortgaged Property actually known to the applicable Special Servicer that has occurred or arisen subsequent to, and that would materially affect the value of the related Mortgaged Property reflected in, such Appraisal. Furthermore, the applicable Special Servicer may consider available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the applicable Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The applicable Special Servicer may, to the extent it is reasonable to do so in accordance with the Servicing Standard, conclusively rely on any opinions or reports of qualified Independent third parties expert in real estate or commercial mortgage loan matters with at least 5 years experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan in making such determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the applicable Special Servicer pursuant to this Section 3.18(b) shall constitute, and be reimbursable as, Servicing Advances. The other parties to this Agreement shall cooperate with all reasonable requests for information made by the applicable Special Servicer in order to allow the applicable Special Servicer to perform its duties pursuant to this Section 3.18(b). Notwithstanding the foregoing, in connection with the DRA/Colonial Office Portfolio Pooled Mortgage Loan, following any notice or report by the related Non-Trust Master Servicer to the applicable Master Servicer hereunder to the effect that an event similar to an Appraisal Trigger Event has occurred with respect to the related Mortgage Loan Group for purposes of such Non-Trust Servicing Agreement, the General Special Servicer, but only at its own election or upon the direction of the Controlling Class Representative, shall determine the Fair Value of the DRA/Colonial Office Portfolio Pooled Mortgage Loan. Notwithstanding the foregoing, no Fair Value shall be determined under this Agreement with respect to a Non-Trust-Serviced the RRI Hotel Portfolio Pooled Mortgage Loan. Instead, the Fair Value shall be deemed to be equal to the fair value thereof as determined by the applicable Non-Trust Special Servicer pursuant to the provisions of the applicable Non-Trust Servicing Agreement.
(c) The Majority Controlling Class Certificateholder(s) or any assignee thereof may, at its or their option, purchase from the Trust any Specially Designated Defaulted Pooled Mortgage Loan (such option, the "Purchase Option"), at a cash price (the "Option Price") equal to the Fair Value of such Mortgage Loan (as most recently determined by the applicable Special Servicer and reported to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer as provided in Section 3.18(b) above) or, if no such Fair Value has yet been established as provided in Section 3.18(b) above or if the applicable Special Servicer is in the process of redetermining such Fair Value because of a change in circumstances, equal to the Purchase Price; provided that:
(i) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan will remain in effect only for the period (the "Option Period") that commences on the date that such Mortgage Loan first becomes a Specially Designated Defaulted Pooled Mortgage Loan and ends on the earlier of (A) the date on which such Mortgage Loan becomes a Corrected Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted Pooled Mortgage Loan and (B) the date on which a Liquidation Event occurs with respect to such Pooled Mortgage Loan or the related Mortgaged Property becomes an REO Property;
(ii) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan shall be assignable by the Majority Controlling Class Certificateholder(s) during the Option Period to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the parties hereto are notified in writing of the assignment;
(iii) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Majority Controlling Class Certificateholder(s) or any assignee thereof within 60 days after the Fair Value of such Mortgage Loan has initially been established as provided in Section 3.18(b) above, then the Majority Controlling Class Certificateholder(s) shall be deemed to have assigned such Purchase Option, for a 30-day period only, to the applicable Special Servicer;
(iv) during the 30-day period following the assignment to it of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan, the applicable Special Servicer shall be entitled to exercise such Purchase Option or to assign such Purchase Option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the other parties hereto are notified in writing of the assignment;
(v) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the applicable Special Servicer or its assignee within the 30-day period following the assignment of such Purchase Option to the applicable Special Servicer as contemplated by clause (iii) above, then such Purchase Option will automatically revert to the Majority Controlling Class Certificateholder(s); and
(vi) prior to any exercise of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by the applicable Special Servicer or any Affiliate thereof, subject to the following paragraph, the Trustee shall confirm and report to the applicable Master Servicer, the Certificate Administrator and the applicable Special Servicer that the applicable Special Servicer's determination of the Fair Value of such Mortgage Loan is consistent with or greater than what the Trustee considers to be the Fair Value of such Mortgage Loan; provided that the applicable Special Servicer may, at its own expense, revise any such Fair Value determination that is rejected by the Trustee, it being understood and agreed that such revised Fair Value determination will likewise be subject to confirmation in accordance with this clause (vi). Notwithstanding anything contained in clause (vi) of the preceding paragraph to the contrary, if the Trustee is required to confirm or reject the applicable Special Servicer's Fair Value determination as contemplated by such clause (vi), the Trustee may (at its option and at the expense of the Trust Fund) designate an Independent third party expert in real estate or commercial mortgage loan matters with at least 5 years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Pooled Mortgage Loan, that has been selected with reasonable care by the Trustee to confirm that the applicable Special Servicer's Fair Value determination as contemplated by such clause (vi) is consistent with or greater than what the Independent third party considers to be the Fair Value of such Mortgage Loan. In the event that the Trustee designates such a third party to make such determination, the Trustee shall be entitled to rely upon such third party's determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Trustee or any such third party pursuant to this paragraph or clause (vi) of the preceding paragraph shall be advanced by the applicable Master Servicer and shall constitute, and be reimbursable as, Servicing Advances; provided that, the Trustee shall not so engage a third party expert whose fees exceed a commercially reasonable sum as determined by the Trustee. The applicable Special Servicer shall provide the Trustee with all information that the applicable Special Servicer utilized in determining the Fair Value that is being confirmed. Any party entitled to do so may exercise the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by providing to the Certificate Administrator, the Trustee, the applicable Master Servicer and the applicable Special Servicer:
(i) written notice of its intention to purchase such Mortgage Loan at the Option Price; and
(ii) if such party is the assignee of the applicable Special Servicer or the Majority Controlling Class Certificateholder(s), evidence of its right to exercise such Purchase Option. The actual purchase of such Specially Designated Defaulted Pooled Mortgage Loan shall occur (by delivery of cash in the amount of the applicable Option Price to the applicable Special Servicer for deposit in the applicable Master Servicer's Collection Account) no later than ten days after the later of (i) such exercise of the Purchase Option with respect to such Mortgage Loan and (ii) if applicable, the confirmation of the applicable Special Servicer's Fair Value determination with respect to such Mortgage Loan in accordance with clause (vi) of the first paragraph of this Section 3.18(c) and/or in accordance with the second paragraph of this Section 3.18(c). If any Person to which the Purchase Option has been assigned as provided above exercises the Purchase Option but fails to consummate the actual purchase of the applicable Specially Designated Defaulted Pooled Mortgage Loan in accordance with the preceding sentence, then the Purchase Option shall automatically thereupon be reinstated, revert to and be exercisable by the Controlling Class Representative or the applicable Special Servicer, as applicable. Notwithstanding the Purchase Option provided for in this Section 3.18(c), the applicable Special Servicer shall proceed in respect of any Specially Designated Defaulted Pooled Mortgage Loan in accordance with Section 3.09 and/or Section 3.20, without regard to such Purchase Option. In no event shall there be a For the avoidance of doubt, the Purchase Option hereunder with respect to a Non-Trust-Serviced Pooled Mortgage Loan. However, in the event of the exercise of a similar option under the related Non-Trust Servicing Agreement and/or pursuant to the related Mortgage Loan Group Intercreditor Agreement, the Trustee shall sell such Non-Trust-Serviced Pooled Mortgage Loan in accordance with such agreement.
(d) The Special Servicer shall use its reasonable efforts, consistent with the Servicing Standard, to solicit cash bids for each Administered REO Property in such manner as will be reasonably likely to realize a fair price (determined pursuant to Section 3.18(e) below) for any Administered REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period provided for by in this Section 3.16(a)). The Special Servicer shall accept the first (and, if multiple cash bids are received by a specified bid date, the highest) cash bid received from any Person that constitutes a fair price (determined pursuant to Section 3.18(e) below) for such Administered REO Property. If the Special Servicer reasonably believes that it will be unable to realize a fair price (determined pursuant to Section 3.18(e) below) with respect to any Administered REO Property within the time constraints imposed by Section 3.16(a), then the Special Servicer shall, consistent with the Servicing Standard, dispose 3
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2007-Pwr18)
Fair Value Option; Sale of Administered REO Properties. Sale of the Non-Trust- Trust-Serviced Pooled Mortgage LoanLoans.
(a) The applicable Master Servicer, the applicable Special Servicer or the Trustee may sell or purchase, or permit the sale or purchase of, a Pooled Mortgage Loan or REO Property (or, in the case of any REO Property related to a the Lion Industrial Portfolio Pooled Mortgage Loan GroupLoans, such REO Property and/or the beneficial interest of the Trust Fund in such REO Property, or, in the case of any Non-Trust-Serviced Pooled Mortgage Loan, the beneficial interest of the Trust Fund in such REO Property) only (i) on the terms and subject to the conditions set forth in this Section 3.18, (ii) as otherwise expressly provided in or contemplated by Sections 2.03 and 9.01 of this Agreement, (iii) in the case of a Pooled Mortgage Loan (or REO Property related thereto) with a related mezzanine loan, in connection with a Mortgage Loan default if and as set forth in the related intercreditor agreement, (iv) in the case of a Pooled Mortgage Loan (or REO Property related thereto) included in a Serviced Mortgage the Lion Industrial Portfolio Loan Group, in connection with a Mortgage Loan default if and as set forth in the Lion Industrial Portfolio Intercreditor Agreement, (v) in the case of each of the Pooled Mortgage Loans (or an REO Property related thereto) described in Section 3.01(h), in connection with a Mortgage Loan default as set forth in the related Mortgage Loan Group Intercreditor Agreement, intercreditor agreement or (vvi) in the case of a Non-Trust-Serviced Pooled Mortgage Loan (or REO Property related thereto), pursuant to a purchase option under the related Mortgage Loan Group Intercreditor Agreement and/or the related Non-Trust Servicing Agreement.
(b) If any Pooled Mortgage Loan becomes a Specially Designated Defaulted Pooled Mortgage Loan, then the applicable Special Servicer shall so notify the Certificate Administrator, the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class (and, if the affected Pooled Mortgage Loan is included in a Serviced Lion Industrial Portfolio Pooled Mortgage Loan Group that includes one or more Serviced Loan, the Lion Industrial Portfolio Non-Pooled Subordinate Loans, the related Non-Pooled Noteholder(s)Noteholder), in writing. In addition, the applicable Special Servicer shall determine (in accordance with the Servicing Standard, taking into account the considerations contemplated by the following paragraph, but without regard to the Purchase Option provided for in Section 3.18(c) below), and report to the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class, the Fair Value of such Pooled Mortgage Loan. The applicable Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan shall be made as soon as reasonably practicable, but in no event later than 30 days after the applicable Special Servicer receives the requisite Appraisal or any other third-party reports that it deems necessary to make the determination. If at any time the applicable Special Servicer becomes aware of any circumstances or conditions that have occurred or arisen with respect to any Specially Designated Defaulted Pooled Mortgage Loan or the related Mortgaged Property subsequent to, and that would, in the applicable Special Servicer's reasonable judgment, materially affect, the applicable Special Servicer's most recent Fair Value determination with respect to such Specially Designated Defaulted Pooled Mortgage Loan, then the applicable Special Servicer shall redetermine (in a manner as is permitted above, but taking into account any such new circumstances or conditions known to the applicable Special Servicer), and report to the Certificate Administrator, the Trustee, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan. In addition, if the applicable Special Servicer has not accepted a bid at the Fair Value of the Mortgage Loan, as most recently determined by the applicable Special Servicer, prior to the expiration of 90 days from such determination, and thereafter the applicable Special Servicer receives a bid at such Fair Value or a request from a holder of the Purchase Option for an updated determination of the Fair Value of the Mortgage Loan, the applicable Special Servicer shall redetermine (in the same manner as provided above, but taking into account any such new circumstances or conditions known to the applicable Special Servicer), and report to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan; provided, however, that the applicable Special Servicer may rely on the existing third-party information if it deems such reliance to be reasonable. In determining the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan, the applicable Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the related Mortgaged Property is located, and the time and expense associated with and the expected recovery from a purchaser's foreclosing on the related Mortgaged Property or working out such Mortgage Loan. In addition, the applicable Special Servicer shall refer to all relevant information contained in the Servicing File, shall take into account the most recent Appraisal obtained or conducted with respect to the related Mortgaged Property in the preceding 12-month period in accordance with this Agreement and shall not determine the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan without such an Appraisal; provided that the applicable Special Servicer shall take account of any change in the circumstances regarding or the condition of the related Mortgaged Property actually known to the applicable Special Servicer that has occurred or arisen subsequent to, and that would materially affect the value of the related Mortgaged Property reflected in, such Appraisal. Furthermore, the applicable Special Servicer may shall consider available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the applicable Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The applicable Special Servicer may, to the extent it is reasonable to do so in accordance with the Servicing Standard, conclusively rely on any opinions or reports of qualified Independent third parties expert in real estate or commercial mortgage loan matters with at least 5 years experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan in making such determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the applicable Special Servicer pursuant to this Section 3.18(b) shall constitute, and be reimbursable as, Servicing Advances. The other parties to this Agreement shall cooperate with all reasonable requests for information made by the applicable Special Servicer in order to allow the applicable Special Servicer to perform its duties pursuant to this Section 3.18(b). Notwithstanding the foregoing, no Fair Value shall be determined under this Agreement with respect to a any Non-Trust-Serviced Pooled Mortgage Loan.
(c) The Majority Controlling Class Certificateholder(s) or any assignee thereof may, at its or their option, purchase from the Trust any Specially Designated Defaulted Pooled Mortgage Loan (such option, the "Purchase Option"), at a cash price (the "Option Price") equal to the Fair Value of such Mortgage Loan (as most recently determined by the applicable Special Servicer and reported to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer as provided in Section 3.18(b) above) or, if no such Fair Value has yet been established as provided in Section 3.18(b) above or if the applicable Special Servicer is in the process of redetermining such Fair Value because of a change in circumstances, equal to the Purchase Price; provided that:
(i) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan will remain in effect only for the period (the "Option Period") that commences on the date that such Mortgage Loan first becomes a Specially Designated Defaulted Pooled Mortgage Loan and ends on the earlier of (A) the date on which such Mortgage Loan becomes a Corrected Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted Pooled Mortgage Loan and (B) the date on which a Liquidation Event occurs with respect to such Pooled Mortgage Loan or the related Mortgaged Property becomes an REO Property;
(ii) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan shall be assignable by the Majority Controlling Class Certificateholder(s) during the Option Period to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the parties hereto are notified in writing of the assignment);
(iii) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Majority Controlling Class Certificateholder(s) or any assignee thereof within 60 days after the Fair Value of such Mortgage Loan has initially been established as provided in Section 3.18(b) above, then the Majority Controlling Class Certificateholder(s) shall be deemed to have assigned such Purchase Option, for a 30-day period only, to the applicable Special Servicer;
(iv) during the 30-day period following the assignment to it of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan, the applicable Special Servicer shall be entitled to exercise such Purchase Option or to assign such Purchase Option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the other parties hereto are notified in writing of the assignment);
(v) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the applicable Special Servicer or its assignee within the 30-day period following the assignment of such Purchase Option to the applicable Special Servicer as contemplated by clause (iii) above, then such Purchase Option will automatically revert to the Majority Controlling Class Certificateholder(s); and
(vi) prior to any exercise of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by the applicable Special Servicer or any Affiliate or assignee thereof, subject to the following paragraph, the Trustee applicable Master Servicer shall confirm and report to the applicable Master ServicerTrustee, the Certificate Administrator and the applicable Special Servicer (or, if the applicable Master Servicer and the applicable Special Servicer are the same Person or Affiliates, the Trustee, upon reasonable notice, shall confirm and report to the Certificate Administrator and the applicable Special Servicer) that the applicable Special Servicer's determination of the Fair Value of such Mortgage Loan is consistent with or greater than what the Trustee applicable Master Servicer (or, if applicable, the Trustee) considers to be the Fair Value of such Mortgage Loan; provided that the applicable Special Servicer may, at its own expense, revise any such Fair Value determination that is rejected by the applicable Master Servicer (or, if applicable, the Trustee), it being understood and agreed that such revised Fair Value determination will likewise be subject to confirmation in accordance with this clause (vi). Notwithstanding anything contained in clause (vi) of the preceding paragraph to the contrary, if the applicable Master Servicer or the Trustee is required to confirm or reject the applicable Special Servicer's Fair Value determination as contemplated by such clause (vi), the Trustee either such party may (at its option and at the expense of the Trust Fund) designate an Independent third party expert in real estate or commercial mortgage loan matters with at least 5 years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Pooled Mortgage Loan, that has been selected with reasonable care by the Trustee applicable Master Servicer (or, if applicable, the Trustee) to confirm that the applicable Special Servicer's Fair Value determination as contemplated by such clause (vi) is consistent with or greater than what the Independent third party considers to be the Fair Value of such Mortgage Loan. In the event that the Trustee applicable Master Servicer or the Trustee, as the case may be, designates such a third party to make such determination, the Trustee applicable Master Servicer or the Trustee, as applicable, shall be entitled to rely upon such third party's determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by such Master Servicer, the Trustee or any such third party pursuant to this paragraph or clause (vi) of the preceding paragraph shall be advanced by the applicable Master Servicer and shall constitute, and be reimbursable as, Servicing Advances; provided that, the Trustee shall not so engage a third party expert whose fees exceed a commercially reasonable sum as determined by the Trustee. The applicable Special Servicer shall provide the Trustee applicable Master Servicer (or, if applicable, the Trustee) with all information that the applicable Special Servicer utilized in determining the Fair Value that is being confirmed. Any party entitled to do so may exercise the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by providing to the Certificate Administrator, the Trustee, the applicable Master Servicer and the applicable Special Servicer:
(i) written notice of its intention to purchase such Mortgage Loan at the Option Price; and
(ii) if such party is the assignee of the applicable Special Servicer or the Majority Controlling Class Certificateholder(s), evidence of its right to exercise such Purchase Option. The actual purchase of such Specially Designated Defaulted Pooled Mortgage Loan shall occur (by delivery of cash in the amount of the applicable Option Price to the applicable Special Servicer for deposit in the applicable Master Servicer's Collection Account) no later than ten days after the later of (i) such exercise of the Purchase Option with respect to such Mortgage Loan and (ii) if applicable, the confirmation of the applicable Special Servicer's Fair Value determination with respect to such Mortgage Loan in accordance with clause (vi) of the first paragraph of this Section 3.18(c) and/or in accordance with the second paragraph of this Section 3.18(c). If any Person to which the Purchase Option has been assigned as provided above exercises the Purchase Option but fails to consummate the actual purchase of the Specially Designated Defaulted Pooled Mortgage Loan in accordance with the preceding sentence, then the Purchase Option shall automatically thereupon be reinstated, revert to and be exercisable by the Controlling Class Representative or the Special Servicer, as applicable. Notwithstanding the Purchase Option provided for in this Section 3.18(c), the Special Servicer shall proceed in respect of any Specially Designated Defaulted Pooled Mortgage Loan in accordance with Section 3.09 and/or Section 3.20, without regard to such Purchase Option. In no event shall there be a Purchase Option hereunder with respect to a Non-Trust-Serviced Pooled Mortgage Loan. However, in the event of the exercise of a similar option under the related Non-Trust Servicing Agreement and/or pursuant to the related Mortgage Loan Group Intercreditor Agreement, the Trustee shall sell such Non-Trust-Serviced Pooled Mortgage Loan in accordance with such agreement.
(d) The Special Servicer shall use its reasonable efforts, consistent with the Servicing Standard, to solicit cash bids for each Administered REO Property in such manner as will be reasonably likely to realize a fair price (determined pursuant to Section 3.18(e) below) for any Administered REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period provided for by Section 3.16(a)). The Special Servicer shall accept the first (and, if multiple cash bids are received by a specified bid date, the highest) cash bid received from any Person that constitutes a fair price (determined pursuant to Section 3.18(e) below) for such Administered REO Property. If the Special Servicer reasonably believes that it will be unable to realize a fair price (determined pursuant to Section 3.18(e) below) with respect to any Administered REO Property within the time constraints imposed by Section 3.16(a), then the Special Servicer shall, consistent with the Servicing Standard, dispose this
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2004-Pwr3)
Fair Value Option; Sale of Administered REO Properties. Sale of the Non-Trust- Serviced Pooled Mortgage Loan.
(a) The applicable Master Servicer, the applicable Special Servicer or the Trustee may sell or purchase, or permit the sale or purchase of, a Pooled Mortgage Loan or REO Property (or, in the case of any REO Property related to a Mortgage Loan Group, such REO Property and/or the beneficial interest of the Trust Fund in such REO Property) only (i) on the terms and subject to the conditions set forth in this Section 3.18, (ii) as otherwise expressly provided in or contemplated by Sections 2.03 and 9.01 of this Agreement, (iii) in the case of a Pooled Mortgage Loan (or REO Property related thereto) with a related mezzanine loan, in connection with a Mortgage Loan default if and as set forth in the related intercreditor agreement, (iv) in the case of a Pooled Mortgage Loan (or REO Property related thereto) included in a Serviced Mortgage Loan Group, in connection with a Mortgage Loan default if and as set forth in the related Mortgage Loan Group Intercreditor Agreement, or (v) in the case of a Non-Trust-Serviced Pooled Mortgage Loan (or REO Property related thereto), pursuant to a purchase option (if any) under the related Mortgage Loan Group Intercreditor Agreement and/or the related Non-Trust Servicing Agreement.
(b) If any Pooled Mortgage Loan becomes a Specially Designated Defaulted Pooled Mortgage Loan, then the applicable Special Servicer shall so notify the Certificate Administrator, the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class (and, if the affected Pooled Mortgage Loan is included in a Serviced Mortgage Loan Group that includes one or more Serviced Non-Pooled Subordinate Loans, the related Non-Pooled Mortgage Loan Noteholder(s)), in writing. In addition, the applicable Special Servicer shall determine (in accordance with the Servicing Standard, taking into account the considerations contemplated by the following paragraph, but without regard to the Purchase Option provided for in Section 3.18(c) below), and report to the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class, the Fair Value of such Pooled Mortgage Loan. The applicable Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan shall be made as soon as reasonably practicable, but in no event later than 30 days after the applicable Special Servicer receives the requisite Appraisal or any other third-party reports that it deems necessary to make the determination. If at any time the applicable Special Servicer becomes aware of any circumstances or conditions that have occurred or arisen with respect to any Specially Designated Defaulted Pooled Mortgage Loan or the related Mortgaged Property subsequent to, and that would, in the applicable Special Servicer's reasonable judgment, materially affect, the applicable Special Servicer's most recent Fair Value determination with respect to such Specially Designated Defaulted Pooled Mortgage Loan, then the applicable Special Servicer shall redetermine (in a manner as is permitted above, but taking into account any such new circumstances or conditions known to the applicable Special Servicer), and report to the Certificate Administrator, the Trustee, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan. In addition, if the applicable Special Servicer has not accepted a bid at the Fair Value of the Mortgage Loan, as most recently determined by the applicable Special Servicer, prior to the expiration of 90 days from such determination, and thereafter the applicable Special Servicer receives a bid at such Fair Value or a request from a holder of the Purchase Option for an updated determination of the Fair Value of the Mortgage Loan, the applicable Special Servicer shall redetermine (in the same manner as provided above, but taking into account any such new circumstances or conditions known to the applicable Special Servicer), and report to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan; provided, however, that the applicable Special Servicer may rely on the existing third-party information if it deems such reliance to be reasonable. In determining the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan, the applicable Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the related Mortgaged Property is located, and the time and expense associated with and the expected recovery from a purchaser's foreclosing on the related Mortgaged Property or working out such Mortgage Loan. In addition, the applicable Special Servicer shall refer to all relevant information contained in the Servicing File, shall take into account the most recent Appraisal obtained or conducted with respect to the related Mortgaged Property in the preceding 12-month period in accordance with this Agreement and shall not determine the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan without such an Appraisal; provided that the applicable Special Servicer shall take account of any change in the circumstances regarding or the condition of the related Mortgaged Property actually known to the applicable Special Servicer that has occurred or arisen subsequent to, and that would materially affect the value of the related Mortgaged Property reflected in, such Appraisal. Furthermore, the applicable Special Servicer may consider available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the applicable Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The applicable Special Servicer may, to the extent it is reasonable to do so in accordance with the Servicing Standard, conclusively rely on any opinions or reports of qualified Independent third parties expert in real estate or commercial mortgage loan matters with at least 5 years experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan in making such determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the applicable Special Servicer pursuant to this Section 3.18(b) shall constitute, and be reimbursable as, Servicing Advances. The other parties to this Agreement shall cooperate with all reasonable requests for information made by the applicable Special Servicer in order to allow the applicable Special Servicer to perform its duties pursuant to this Section 3.18(b). Notwithstanding the foregoing, no Fair Value shall be determined under this Agreement with respect to a Non-Trust-Serviced Pooled Mortgage Loan.
(c) The Majority Controlling Class Certificateholder(s) or any assignee thereof may, at its or their option, purchase from the Trust any Specially Designated Defaulted Pooled Mortgage Loan (such option, the "Purchase Option"), at a cash price (the "Option Price") equal to the Fair Value of such Mortgage Loan (as most recently determined by the applicable Special Servicer and reported to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer as provided in Section 3.18(b) above) or, if no such Fair Value has yet been established as provided in Section 3.18(b) above or if the applicable Special Servicer is in the process of redetermining such Fair Value because of a change in circumstances, equal to the Purchase Price; provided that:
(i) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan will remain in effect only for the period (the "Option Period") that commences on the date that such Mortgage Loan first becomes a Specially Designated Defaulted Pooled Mortgage Loan and ends on the earlier of (A) the date on which such Mortgage Loan becomes a Corrected Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted Pooled Mortgage Loan and (B) the date on which a Liquidation Event occurs with respect to such Pooled Mortgage Loan or the related Mortgaged Property becomes an REO Property;
(ii) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan shall be assignable by the Majority Controlling Class Certificateholder(s) during the Option Period to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the parties hereto are notified in writing of the assignment;
(iii) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Majority Controlling Class Certificateholder(s) or any assignee thereof within 60 days after the Fair Value of such Mortgage Loan has initially been established as provided in Section 3.18(b) above, then the Majority Controlling Class Certificateholder(s) shall be deemed to have assigned such Purchase Option, for a 30-day period only, to the applicable Special Servicer;
(iv) during the 30-day period following the assignment to it of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan, the applicable Special Servicer shall be entitled to exercise such Purchase Option or to assign such Purchase Option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the other parties hereto are notified in writing of the assignment;
(v) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the applicable Special Servicer or its assignee within the 30-day period following the assignment of such Purchase Option to the applicable Special Servicer as contemplated by clause (iii) above, then such Purchase Option will automatically revert to the Majority Controlling Class Certificateholder(s); and
(vi) prior to any exercise of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by the applicable Special Servicer or any Affiliate thereof, subject to the following paragraph, the Trustee shall confirm and report to the applicable Master Servicer, the Certificate Administrator and the applicable Special Servicer that the applicable Special Servicer's determination of the Fair Value of such Mortgage Loan is consistent with or greater than what the Trustee considers to be the Fair Value of such Mortgage Loan; provided that the applicable Special Servicer may, at its own expense, revise any such Fair Value determination that is rejected by the Trustee, it being understood and agreed that such revised Fair Value determination will likewise be subject to confirmation in accordance with this clause (vi). Notwithstanding anything contained in clause (vi) of the preceding paragraph to the contrary, if the Trustee is required to confirm or reject the applicable Special Servicer's Fair Value determination as contemplated by such clause (vi), the Trustee may (at its option and at the expense of the Trust Fund) designate an Independent third party expert in real estate or commercial mortgage loan matters with at least 5 years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Pooled Mortgage Loan, that has been selected with reasonable care by the Trustee to confirm that the applicable Special Servicer's Fair Value determination as contemplated by such clause (vi) is consistent with or greater than what the Independent third party considers to be the Fair Value of such Mortgage Loan. In the event that the Trustee designates such a third party to make such determination, the Trustee shall be entitled to rely upon such third party's determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Trustee or any such third party pursuant to this paragraph or clause (vi) of the preceding paragraph shall be advanced by the applicable Master Servicer and shall constitute, and be reimbursable as, Servicing Advances; provided that, the Trustee shall not so engage a third party expert whose fees exceed a commercially reasonable sum as determined by the Trustee. The applicable Special Servicer shall provide the Trustee with all information that the applicable Special Servicer utilized in determining the Fair Value that is being confirmed. Any party entitled to do so may exercise the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by providing to the Certificate Administrator, the Trustee, the applicable Master Servicer and the applicable Special Servicer:
(i) written notice of its intention to purchase such Mortgage Loan at the Option Price; and
(ii) if such party is the assignee of the applicable Special Servicer or the Majority Controlling Class Certificateholder(s), evidence of its right to exercise such Purchase Option. The actual purchase of such Specially Designated Defaulted Pooled Mortgage Loan shall occur (by delivery of cash in the amount of the applicable Option Price to the applicable Special Servicer for deposit in the applicable Master Servicer's Collection Account) no later than ten days after the later of (i) such exercise of the Purchase Option with respect to such Mortgage Loan and (ii) if applicable, the confirmation of the applicable Special Servicer's Fair Value determination with respect to such Mortgage Loan in accordance with clause (vi) of the first paragraph of this Section 3.18(c) and/or in accordance with the second paragraph of this Section 3.18(c). If any Person to which the Purchase Option has been assigned as provided above exercises the Purchase Option but fails to consummate the actual purchase of the applicable Specially Designated Defaulted Pooled Mortgage Loan in accordance with the preceding sentence, then the Purchase Option shall automatically thereupon be reinstated, revert to and be exercisable by the Controlling Class Representative or the applicable Special Servicer, as applicable. Notwithstanding the Purchase Option provided for in this Section 3.18(c), the applicable Special Servicer shall proceed in respect of any Specially Designated Defaulted Pooled Mortgage Loan in accordance with Section 3.09 and/or Section 3.20, without regard to such Purchase Option. In no event shall there be a Purchase Option hereunder with respect to a Non-Trust-Serviced Pooled Mortgage Loan. However, in the event of the exercise of a similar option under the related Non-Trust Servicing Agreement and/or pursuant to the related Mortgage Loan Group Intercreditor Agreement, the Trustee shall sell such Non-Trust-Serviced Pooled Mortgage Loan in accordance with such agreement.
(d) The applicable Special Servicer shall use its reasonable efforts, consistent with the Servicing Standard, to solicit cash bids for each Administered REO Property in such manner as will be reasonably likely to realize a fair price (determined pursuant to Section 3.18(e) below) for any Administered REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period provided for by Section 3.16(a)). The applicable Special Servicer shall accept the first (and, if multiple cash bids are received by a specified bid date, the highest) cash bid received from any Person that constitutes a fair price (determined pursuant to Section 3.18(e) below) for such Administered REO Property. If the Special Servicer reasonably believes that it will be unable to realize a fair price (determined pursuant to Section 3.18(e) below) with respect to any Administered REO Property within the time constraints imposed by Section 3.16(a), then the Special Servicer shall, consistent with the Servicing Standard, dispose shal
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2006-Pwr14)
Fair Value Option; Sale of Administered REO Properties. Sale of the Non-Trust- Trust-Serviced Pooled Mortgage LoanLoans.
(a) The applicable Master Servicer, the Special Servicer or the Trustee may sell or purchase, or permit the sale or purchase of, a Pooled Mortgage Loan or REO Property (or, in the case of any REO Property related to a Mortgage Loan Group, such REO Property and/or the beneficial interest of the Trust Fund in such REO Property) only (i) on the terms and subject to the conditions set forth in this Section 3.18, (ii) as otherwise expressly provided in or contemplated by Sections 2.03 and 9.01 of this Agreement, (iii) in the case of a Pooled Mortgage Loan (or REO Property related thereto) with a related mezzanine loan or subordinate loan, in connection with a Mortgage Loan default if and as set forth in the related intercreditor agreement, agreement or (iv) in the case of a Pooled Mortgage Loan (or REO Property related thereto) included in a Serviced Mortgage Loan Group, in connection with a Mortgage Loan default if and as set forth in the related Mortgage Loan Group Intercreditor Agreement, or (v) in the case of a any Non-Trust-Serviced Pooled Mortgage Loan (or REO Property related thereto), by the applicable Master Servicer and/or the Trustee pursuant to a purchase option (if any) under the related Mortgage Loan Group Intercreditor Agreement and/or the related Non-Trust Servicing Agreement.
(b) If any Pooled Mortgage Loan becomes a Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall so notify the Certificate Administrator, the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class (and, if the affected Pooled Mortgage Loan is included in a Serviced Mortgage Loan Group that includes one or more Serviced Non-Pooled Subordinate Loans, the related Non-Pooled Noteholder(s))Class, in writing. In addition, the Special Servicer shall determine (in accordance with the Servicing Standard, taking into account the considerations contemplated by the following paragraph, but without regard to the Purchase Option provided for in Section 3.18(c) below), and report to the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class, the Fair Value of such Pooled Mortgage Loan. The Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan shall be made as soon as reasonably practicablepracticable upon written request from the holder of the Purchase Option, but in no event later than 30 days after the Special Servicer receives such written request and the requisite Appraisal or any other third-party reports that it deems necessary to make the determination. If at any time the Special Servicer becomes aware of any circumstances or conditions that have occurred or arisen with respect to any Specially Designated Defaulted Pooled Mortgage Loan or the related Mortgaged Property subsequent to, and that would, in the Special Servicer's reasonable judgment, materially affect, the Special Servicer's most recent Fair Value determination with respect to such Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall redetermine (in a manner as is permitted above, but taking into account any such new circumstances or conditions known to the Special Servicer), and report to the Certificate Administrator, the Trustee, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan. In addition, if the Special Servicer has not accepted a bid at the Fair Value of the Mortgage Loan, as most recently determined by the Special Servicer, prior to the expiration of 90 days from such determination, and thereafter the Special Servicer receives a bid at such Fair Value or a request from a holder of the Purchase Option for an updated determination of the Fair Value of the Mortgage Loan, the Special Servicer shall redetermine (in the same manner as provided above, but taking into account any such new circumstances or conditions known to the Special Servicer), and report to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan; provided, however, that the Special Servicer may rely on the existing third-party information if it deems such reliance to be reasonable. In determining the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the related Mortgaged Property is located, and the time and expense associated with and the expected recovery from a purchaser's foreclosing on the related Mortgaged Property or working out such Mortgage Loan. In addition, the Special Servicer shall refer to all relevant information contained in the Servicing File, shall take into account the most recent Appraisal obtained or conducted with respect to the related Mortgaged Property in the preceding 12-month period in accordance with this Agreement and shall not determine the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan without such an Appraisal; provided that the Special Servicer shall take account of any change in the circumstances regarding or the condition of the related Mortgaged Property actually known to the Special Servicer that has occurred or arisen subsequent to, and that would materially affect the value of the related Mortgaged Property reflected in, such Appraisal. Furthermore, the Special Servicer may shall consider available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The Special Servicer may, to the extent it is reasonable to do so in accordance with the Servicing Standard, conclusively rely on any opinions or reports of qualified Independent third parties expert in real estate or commercial mortgage loan matters with at least 5 years experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan in making such determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Special Servicer pursuant to this Section 3.18(b) shall constitute, and be reimbursable as, Servicing Advances. The other parties to this Agreement shall cooperate with all reasonable requests for information made by the Special Servicer in order to allow the Special Servicer to perform its duties pursuant to this Section 3.18(b). Notwithstanding the foregoing, no Fair Value shall be determined under this Agreement with respect to a Non-Trust-Serviced Pooled Mortgage Loan.
(c) The Majority Controlling Class Certificateholder(s) or any assignee thereof may, at its or their option, purchase from the Trust any Specially Designated Defaulted Pooled Mortgage Loan (such option, the "Purchase Option"), at a cash price (the "Option Price") equal to the Fair Value of such Mortgage Loan (as most recently determined by the Special Servicer and reported to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer as provided in Section 3.18(b) above) or, if no such Fair Value has yet been established as provided in Section 3.18(b) above or if the Special Servicer is in the process of redetermining such Fair Value because of a change in circumstances, equal to the Purchase Price; provided that:
(i) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan will remain in effect only for the period (the "Option Period") that commences on the date that such Mortgage Loan first becomes a Specially Designated Defaulted Pooled Mortgage Loan and ends on the earlier of (A) the date on which such Mortgage Loan becomes a Corrected Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted Pooled Mortgage Loan and (B) the date on which a Liquidation Event occurs with respect to such Pooled Mortgage Loan or the related Mortgaged Property becomes an REO Property;
(ii) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan shall be assignable by the Majority Controlling Class Certificateholder(s) during the Option Period to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the parties hereto are notified in writing of the assignment;
(iii) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Majority Controlling Class Certificateholder(s) or any assignee thereof within 60 days after the Fair Value of such Mortgage Loan has initially been established as provided in Section 3.18(b) above, then the Majority Controlling Class Certificateholder(s) shall be deemed to have assigned such Purchase Option, for a 30-day period only, to the Special Servicer;
(iv) during the 30-day period following the assignment to it of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall be entitled to exercise such Purchase Option or to assign such Purchase Option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the other parties hereto are notified in writing of the assignment;
(v) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Special Servicer or its assignee within the 30-day period following the assignment of such Purchase Option to the Special Servicer as contemplated by clause (iii) above, then such Purchase Option will automatically revert to the Majority Controlling Class Certificateholder(s); and
(vi) prior to any exercise of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by the Special Servicer or any Affiliate thereof, subject to the following paragraph, the Trustee shall confirm and report to the applicable Master Servicer, the Certificate Administrator and the Special Servicer that the Special Servicer's determination of the Fair Value of such Mortgage Loan is consistent with or greater than what the Trustee considers to be the Fair Value of such Mortgage Loan; provided that the Special Servicer may, at its own expense, revise any such Fair Value determination that is rejected by the Trustee, it being understood and agreed that such revised Fair Value determination will likewise be subject to confirmation in accordance with this clause (vi). Notwithstanding anything contained in clause (vi) of the preceding paragraph to the contrary, if the Trustee is required to confirm or reject the Special Servicer's Fair Value determination as contemplated by such clause (vi), the Trustee may (at its option and at the expense of the Trust Fund) designate an Independent third party expert in real estate or commercial mortgage loan matters with at least 5 years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Pooled Mortgage Loan, that has been selected with reasonable care by the Trustee to confirm that the Special Servicer's Fair Value determination as contemplated by such clause (vi) is consistent with or greater than what the Independent third party considers to be the Fair Value of such Mortgage Loan. In the event that the Trustee designates such a third party to make such determination, the Trustee shall be entitled to rely upon such third party's determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Trustee or any such third party pursuant to this paragraph or clause (vi) of the preceding paragraph shall be advanced by the applicable Master Servicer and shall constitute, and be reimbursable as, Servicing Advances; provided that, the Trustee shall not so engage a third party expert whose fees exceed a commercially reasonable sum as determined by the Trustee. The Special Servicer shall provide the Trustee with all information that the Special Servicer utilized in determining the Fair Value that is being confirmed. Any party entitled to do so may exercise the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by providing to the Certificate Administrator, the Trustee, the applicable Master Servicer and the Special Servicer:
(i) written notice of its intention to purchase such Mortgage Loan at the Option Price; and
(ii) if such party is the assignee of the Special Servicer or the Majority Controlling Class Certificateholder(s), evidence of its right to exercise such Purchase Option. The actual purchase of such Specially Designated Defaulted Pooled Mortgage Loan shall occur (by delivery of cash in the amount of the applicable Option Price to the Special Servicer for deposit in the applicable Master Servicer's Collection Account) no later than ten days after the later of (i) such exercise of the Purchase Option with respect to such Mortgage Loan and (ii) if applicable, the confirmation of the Special Servicer's Fair Value determination with respect to such Mortgage Loan in accordance with clause (vi) of the first paragraph of this Section 3.18(c) and/or in accordance with the second paragraph of this Section 3.18(c). If any Person to which the Purchase Option has been assigned as provided above exercises the Purchase Option but fails to consummate the actual purchase of the Specially Designated Defaulted Pooled Mortgage Loan in accordance with the preceding sentence, then the Purchase Option shall automatically thereupon be reinstated, revert to and be exercisable by the Controlling Class Representative or the Special Servicer, as applicable. Notwithstanding the Purchase Option provided for in this Section 3.18(c), the Special Servicer shall proceed in respect of any Specially Designated Defaulted Pooled Mortgage Loan in accordance with Section 3.09 and/or Section 3.20, without regard to such Purchase Option. In no event shall there be a Purchase Option hereunder with respect to a Lincoln Square Non-Trust-Serviced Pooled Mortgage Loan. However, in Notwithstanding any provision set forth above to the event contrary and upon the written request of the exercise holder of a similar option under the Purchase Option, (i) the Special Servicer shall be entitled to make its Fair Value determination with respect to the World Apparel Center Pooled Mortgage Loan on the basis of the appraisal and other "determination information" furnished to it by the related Non-Trust Special Servicer pursuant to the terms of the related Non-Trust Servicing Agreement and/or pursuant to (but the related Mortgage Loan Group Special Servicer shall nonetheless make its own Fair Value determination without reliance on the fair value analysis or conclusion of such Non-Trust Special Servicer) and (ii) in accordance with the collective arrangements evidenced by such Non-Trust Servicing Agreement and the World Apparel Center Intercreditor Agreement, the Trustee shall sell such Non-Trust-Serviced Pooled Mortgage Loan in accordance with such agreement.
(d) The Special Servicer shall use its reasonable efforts, consistent with notify the Servicing Standard, to solicit cash bids for each Administered REO Property in such manner as will be reasonably likely to realize a fair price holders of the World Apparel Center Non-Pooled Pari Passu Companion Loans of the Special Servicer's proposed Fair Value determination (determined or any revision thereof made pursuant to the terms of this subsection (b) or Section 3.18(e3.18(c) below) for below and shall deliver to them a copy of any Administered REO Property within a customary and normal time frame for the sale of comparable properties documentation supporting such Fair Value determination (and, in any event, within the time period provided for by Section 3.16(aor such revision thereof)). The Special Servicer shall accept the first (and, if multiple cash bids are received by a specified bid date, the highest) cash bid received from any Person that constitutes a fair price (determined pursuant to Section 3.18(e) below) for such Administered REO Property. If the Special Servicer reasonably believes that it will be unable to realize a fair price (determined pursuant to Section 3.18(e) below) with respect to any Administered REO Property within the time constraints imposed by Section 3.16(a), then the Special Servicer shall, consistent with the Servicing Standard, dispose .
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2004-Pwr5)
Fair Value Option; Sale of Administered REO Properties. Sale of the Non-Trust- Serviced Pooled Mortgage Loan.
(a) The applicable Master Servicer, the Special Servicer or the Trustee may sell or purchase, or permit the sale or purchase of, a Pooled Mortgage Loan or REO Property (or, in the case of any REO Property related to a Mortgage Loan Group, such REO Property and/or the beneficial interest of the Trust Fund in such REO Property) only (i) on the terms and subject to the conditions set forth in this Section 3.18, (ii) as otherwise expressly provided in or contemplated by Sections 2.03 and 9.01 of this Agreement, (iii) in the case of a Pooled Mortgage Loan (or REO Property related thereto) with a related mezzanine loan, in connection with a Mortgage Loan default if and as set forth in the related intercreditor agreement, (iv) in the case of a Pooled Mortgage Loan (or REO Property related thereto) included in a Serviced Mortgage Loan Group, in connection with a Mortgage Loan default if and as set forth in the related Mortgage Loan Group Intercreditor Agreement, or (v) in the case of a Non-Trust-Serviced Pooled Mortgage Loan (or REO Property related thereto), pursuant to a purchase option under the related Mortgage Loan Group Intercreditor Agreement and/or the related Non-Trust Servicing Agreement.
(b) If any Pooled Mortgage Loan becomes a Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall so notify the Certificate Administrator, the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class (and, if the affected Pooled Mortgage Loan is included in a Serviced Mortgage Loan Group that includes one or more Serviced Non-Pooled Subordinate Loans, the related Non-Pooled Noteholder(s)), in writing. In addition, the Special Servicer shall determine (in accordance with the Servicing Standard, taking into account the considerations contemplated by the following paragraph, but without regard to the Purchase Option provided for in Section 3.18(c) below), and report to the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class, the Fair Value of such Pooled Mortgage Loan. The Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan shall be made as soon as reasonably practicable, but in no event later than 30 days after the Special Servicer receives the requisite Appraisal or any other third-party reports that it deems necessary to make the determination. If at any time the Special Servicer becomes aware of any circumstances or conditions that have occurred or arisen with respect to any Specially Designated Defaulted Pooled Mortgage Loan or the related Mortgaged Property subsequent to, and that would, in the Special Servicer's reasonable judgment, materially affect, the Special Servicer's most recent Fair Value determination with respect to such Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall redetermine (in a manner as is permitted above, but taking into account any such new circumstances or conditions known to the Special Servicer), and report to the Certificate Administrator, the Trustee, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan. In addition, if the Special Servicer has not accepted a bid at the Fair Value of the Mortgage Loan, as most recently determined by the Special Servicer, prior to the expiration of 90 days from such determination, and thereafter the Special Servicer receives a bid at such Fair Value or a request from a holder of the Purchase Option for an updated determination of the Fair Value of the Mortgage Loan, the Special Servicer shall redetermine (in the same manner as provided above, but taking into account any such new circumstances or conditions known to the Special Servicer), and report to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan; provided, however, that the Special Servicer may rely on the existing third-party information if it deems such reliance to be reasonable. In determining the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the related Mortgaged Property is located, and the time and expense associated with and the expected recovery from a purchaser's foreclosing on the related Mortgaged Property or working out such Mortgage Loan. In addition, the Special Servicer shall refer to relevant information contained in the Servicing File, shall take into account the most recent Appraisal obtained or conducted with respect to the related Mortgaged Property in the preceding 12-month period in accordance with this Agreement and shall not determine the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan without such an Appraisal; provided that the Special Servicer shall take account of any change in the circumstances regarding or the condition of the related Mortgaged Property actually known to the Special Servicer that has occurred or arisen subsequent to, and that would materially affect the value of the related Mortgaged Property reflected in, such Appraisal. Furthermore, the Special Servicer may consider available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The Special Servicer may, to the extent it is reasonable to do so in accordance with the Servicing Standard, conclusively rely on any opinions or reports of qualified Independent third parties expert in real estate or commercial mortgage loan matters with at least 5 years experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan in making such determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Special Servicer pursuant to this Section 3.18(b) shall constitute, and be reimbursable as, Servicing Advances. The other parties to this Agreement shall cooperate with all reasonable requests for information made by the Special Servicer in order to allow the Special Servicer to perform its duties pursuant to this Section 3.18(b). Notwithstanding the foregoing, no Fair Value shall be determined under this Agreement with respect to a Non-Trust-Serviced Pooled Mortgage Loan.
(c) The Majority Controlling Class Certificateholder(s) or any assignee thereof may, at its or their option, purchase from the Trust any Specially Designated Defaulted Pooled Mortgage Loan (such option, the "Purchase Option"), at a cash price (the "Option Price") equal to the Fair Value of such Mortgage Loan (as most recently determined by the Special Servicer and reported to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer as provided in Section 3.18(b) above) or, if no such Fair Value has yet been established as provided in Section 3.18(b) above or if the Special Servicer is in the process of redetermining such Fair Value because of a change in circumstances, equal to the Purchase Price; provided that:
(i) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan will remain in effect only for the period (the "Option Period") that commences on the date that such Mortgage Loan first becomes a Specially Designated Defaulted Pooled Mortgage Loan and ends on the earlier of (A) the date on which such Mortgage Loan becomes a Corrected Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted Pooled Mortgage Loan and (B) the date on which a Liquidation Event occurs with respect to such Pooled Mortgage Loan or the related Mortgaged Property becomes an REO Property;
(ii) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan shall be assignable by the Majority Controlling Class Certificateholder(s) during the Option Period to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the parties hereto are notified in writing of the assignment;
(iii) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Majority Controlling Class Certificateholder(s) or any assignee thereof within 60 days after the Fair Value of such Mortgage Loan has initially been established as provided in Section 3.18(b) above, then the Majority Controlling Class Certificateholder(s) shall be deemed to have assigned such Purchase Option, for a 30-day period only, to the Special Servicer;
(iv) during the 30-day period following the assignment to it of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall be entitled to exercise such Purchase Option or to assign such Purchase Option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the other parties hereto are notified in writing of the assignment;
(v) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Special Servicer or its assignee within the 30-day period following the assignment of such Purchase Option to the Special Servicer as contemplated by clause (iii) above, then such Purchase Option will automatically revert to the Majority Controlling Class Certificateholder(s); and
(vi) prior to any exercise of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by the Special Servicer or any Affiliate thereof, subject to the following paragraph, the Trustee shall confirm and report to the applicable Master Servicer, the Certificate Administrator and the Special Servicer that the Special Servicer's determination of the Fair Value of such Mortgage Loan is consistent with or greater than what the Trustee considers to be the Fair Value of such Mortgage Loan; provided that the Special Servicer may, at its own expense, revise any such Fair Value determination that is rejected by the Trustee, it being understood and agreed that such revised Fair Value determination will likewise be subject to confirmation in accordance with this clause (vi). Notwithstanding anything contained in clause (vi) of the preceding paragraph to the contrary, if the Trustee is required to confirm or reject the Special Servicer's Fair Value determination as contemplated by such clause (vi), the Trustee may (at its option and at the expense of the Trust Fund) designate an Independent third party expert in real estate or commercial mortgage loan matters with at least 5 years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Pooled Mortgage Loan, that has been selected with reasonable care by the Trustee to confirm that the Special Servicer's Fair Value determination as contemplated by such clause (vi) is consistent with or greater than what the Independent third party considers to be the Fair Value of such Mortgage Loan. In the event that the Trustee designates such a third party to make such determination, the Trustee shall be entitled to rely upon such third party's determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Trustee or any such third party pursuant to this paragraph or clause (vi) of the preceding paragraph shall be advanced by the applicable Master Servicer and shall constitute, and be reimbursable as, Servicing Advances; provided that, the Trustee shall not so engage a third party expert whose fees exceed a commercially reasonable sum as determined by the Trustee. The Special Servicer shall provide the Trustee with all information that the Special Servicer utilized in determining the Fair Value that is being confirmed. Any party entitled to do so may exercise the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by providing to the Certificate Administrator, the Trustee, the applicable Master Servicer and the Special Servicer:
(i) written notice of its intention to purchase such Mortgage Loan at the Option Price; and
(ii) if such party is the assignee of the Special Servicer or the Majority Controlling Class Certificateholder(s), evidence of its right to exercise such Purchase Option. The actual purchase of such Specially Designated Defaulted Pooled Mortgage Loan shall occur (by delivery of cash in the amount of the applicable Option Price to the Special Servicer for deposit in the applicable Master Servicer's Collection Account) no later than ten days after the later of (i) such exercise of the Purchase Option with respect to such Mortgage Loan and (ii) if applicable, the confirmation of the Special Servicer's Fair Value determination with respect to such Mortgage Loan in accordance with clause (vi) of the first paragraph of this Section 3.18(c) and/or in accordance with the second paragraph of this Section 3.18(c). If any Person to which the Purchase Option has been assigned as provided above exercises the Purchase Option but fails to consummate the actual purchase of the Specially Designated Defaulted Pooled Mortgage Loan in accordance with the preceding sentence, then the Purchase Option shall automatically thereupon be reinstated, revert to and be exercisable by the Controlling Class Representative or the Special Servicer, as applicable. Notwithstanding the Purchase Option provided for in this Section 3.18(c), the Special Servicer shall proceed in respect of any Specially Designated Defaulted Pooled Mortgage Loan in accordance with Section 3.09 and/or Section 3.20, without regard to such Purchase Option. In no event shall there be a Purchase Option hereunder with respect to a Non-Trust-Serviced Pooled Mortgage Loan. However, in the event of the exercise of a similar option under the related Non-Trust Servicing Agreement and/or pursuant to the related Mortgage Loan Group Intercreditor Agreement, the Trustee shall sell such Non-Trust-Serviced Pooled Mortgage Loan in accordance with such agreement.
(d) The Special Servicer shall use its reasonable efforts, consistent with the Servicing Standard, to solicit cash bids for each Administered REO Property in such manner as will be reasonably likely to realize a fair price (determined pursuant to Section 3.18(e) below) for any Administered REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period provided for by Section 3.16(a)). The Special Servicer shall accept the first (and, if multiple cash bids are received by a specified bid date, the highest) cash bid received from any Person that constitutes a fair price (determined pursuant to Section 3.18(e) below) for such Administered REO Property. If the Special Servicer reasonably believes that it will be unable to realize a fair price (determined pursuant to Section 3.18(e) below) with respect to any Administered REO Property within the time constraints imposed by Section 3.16(a), then the Special Servicer shall, consistent with the Servicing Standard, dispose
Appears in 1 contract
Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Trust 2005-Pwr10)
Fair Value Option; Sale of Administered REO Properties. Sale of the Non-Trust- Serviced Pooled Mortgage LoanLoans.
(a) The applicable Master Servicer, the Special Servicer or the Trustee may sell or purchase, or permit the sale or purchase of, a Pooled Mortgage Loan or REO Property (or, in the case of any REO Property related to a Mortgage Loan Group, such REO Property and/or the beneficial interest of the Trust Fund in such REO Property) only (i) on the terms and subject to the conditions set forth in this Section 3.18, (ii) as otherwise expressly provided in or contemplated by Sections 2.03 and 9.01 of this Agreement, (iii) in the case of a Pooled Mortgage Loan (or REO Property related thereto) with a related mezzanine loan, in connection with a Mortgage Loan default if and as set forth in the related intercreditor agreement, agreement or (iv) in the case of a Pooled Mortgage Loan (or REO Property related thereto) included in a Serviced Mortgage Loan Group, in connection with a Mortgage Loan default if and as set forth in the related Mortgage Loan Group Intercreditor Agreement, or (v) in the case of a Non-Trust-Serviced Pooled Mortgage Loan (or REO Property related thereto), pursuant to a purchase option (if any) under the related Mortgage Loan Group Intercreditor Agreement and/or the related Non-Trust Servicing Agreement.
(b) If any Pooled Mortgage Loan becomes a Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall so notify the Certificate Administrator, the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class (and, if the affected Pooled Mortgage Loan is included in a Serviced Mortgage Loan Group that includes one or more Serviced Non-Pooled Subordinate Loans, the related Non-Pooled Noteholder(s))Class, in writing. In addition, the Special Servicer shall determine (in accordance with the Servicing Standard, taking into account the considerations contemplated by the following paragraph, but without regard to the Purchase Option provided for in Section 3.18(c) below), and report to the Trustee, the applicable Master Servicer, the Controlling Class Representative and the Holder(s) of the Controlling Class, the Fair Value of such Pooled Mortgage Loan. The Special Servicer's determination of the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan shall be made as soon as reasonably practicable, but in no event later than 30 days after the Special Servicer receives the requisite Appraisal or any other third-party reports that it deems necessary to make the determination. If at any time the Special Servicer becomes aware of any circumstances or conditions that have occurred or arisen with respect to any Specially Designated Defaulted Pooled Mortgage Loan or the related Mortgaged Property subsequent to, and that would, in the Special Servicer's reasonable judgment, materially affect, the Special Servicer's most recent Fair Value determination with respect to such Specially Designated Defaulted Pooled Mortgage Loan, then the Special Servicer shall redetermine (in a manner as is permitted above, but taking into account any such new circumstances or conditions known to the Special Servicer), and report to the Certificate Administrator, the Trustee, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan. In addition, if the Special Servicer has not accepted a bid at the Fair Value of the Mortgage Loan, as most recently determined by the Special Servicer, prior to the expiration of 90 days from such determination, and thereafter the Special Servicer receives a bid at such Fair Value or a request from a holder of the Purchase Option for an updated determination of the Fair Value of the Mortgage Loan, the Special Servicer shall redetermine (in the same manner as provided above, but taking into account any such new circumstances or conditions known to the Special Servicer), and report to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer (and the Certificate Administrator shall, in turn, report to the Holder(s) of the Controlling Class), the updated Fair Value of the subject Specially Designated Defaulted Pooled Mortgage Loan; provided, however, that the Special Servicer may rely on the existing third-party information if it deems such reliance to be reasonable. In determining the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall take into account, among other factors, the period and amount of the delinquency on such Mortgage Loan, the occupancy level and physical condition of the related Mortgaged Property, the state of the local economy in the area where the related Mortgaged Property is located, and the time and expense associated with and the expected recovery from a purchaser's foreclosing on the related Mortgaged Property or working out such Mortgage Loan. In addition, the Special Servicer shall refer to all relevant information contained in the Servicing File, shall take into account the most recent Appraisal obtained or conducted with respect to the related Mortgaged Property in the preceding 12-month period in accordance with this Agreement and shall not determine the Fair Value of any Specially Designated Defaulted Pooled Mortgage Loan without such an Appraisal; provided that the Special Servicer shall take account of any change in the circumstances regarding or the condition of the related Mortgaged Property actually known to the Special Servicer that has occurred or arisen subsequent to, and that would materially affect the value of the related Mortgaged Property reflected in, such Appraisal. Furthermore, the Special Servicer may shall consider available objective third-party information obtained from generally available sources, as well as information obtained from vendors providing real estate services to the Special Servicer, concerning the market for distressed real estate loans and the real estate market for the subject property type in the area where the related Mortgaged Property is located. The Special Servicer may, to the extent it is reasonable to do so in accordance with the Servicing Standard, conclusively rely on any opinions or reports of qualified Independent third parties expert in real estate or commercial mortgage loan matters with at least 5 years experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Mortgage Loan in making such determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Special Servicer pursuant to this Section 3.18(b) shall constitute, and be reimbursable as, Servicing Advances. The other parties to this Agreement shall cooperate with all reasonable requests for information made by the Special Servicer in order to allow the Special Servicer to perform its duties pursuant to this Section 3.18(b). Notwithstanding the foregoing, no Fair Value shall be determined under this Agreement with respect to a Non-Trust-Serviced Pooled Mortgage Loan.
(c) The Majority Controlling Class Certificateholder(s) or any assignee thereof may, at its or their option, purchase from the Trust any Specially Designated Defaulted Pooled Mortgage Loan (such option, the "Purchase Option"), at a cash price (the "Option Price") equal to the Fair Value of such Mortgage Loan (as most recently determined by the Special Servicer and reported to the Trustee, the Certificate Administrator, the Controlling Class Representative and the applicable Master Servicer as provided in Section 3.18(b) above) or, if no such Fair Value has yet been established as provided in Section 3.18(b) above or if the Special Servicer is in the process of redetermining such Fair Value because of a change in circumstances, equal to the Purchase Price; provided that:
(i) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan will remain in effect only for the period (the "Option Period") that commences on the date that such Mortgage Loan first becomes a Specially Designated Defaulted Pooled Mortgage Loan and ends on the earlier of (A) the date on which such Mortgage Loan becomes a Corrected Mortgage Loan or otherwise ceases to be a Specially Designated Defaulted Pooled Mortgage Loan and (B) the date on which a Liquidation Event occurs with respect to such Pooled Mortgage Loan or the related Mortgaged Property becomes an REO Property;
(ii) the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan shall be assignable by the Majority Controlling Class Certificateholder(s) during the Option Period to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the parties hereto are notified in writing of the assignment;
(iii) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Majority Controlling Class Certificateholder(s) or any assignee thereof within 60 days after the Fair Value of such Mortgage Loan has initially been established as provided in Section 3.18(b) above, then the Majority Controlling Class Certificateholder(s) shall be deemed to have assigned such Purchase Option, for a 30-day period only, to the Special Servicer;
(iv) during the 30-day period following the assignment to it of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan, the Special Servicer shall be entitled to exercise such Purchase Option or to assign such Purchase Option to any third party (but in any event any assignment of the Purchase Option to the related Borrower under such Specially Designated Defaulted Pooled Mortgage Loan or any Affiliate of such Borrower shall constitute a violation of this Section 3.18), provided that the other parties hereto are notified in writing of the assignment;
(v) if the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan is not exercised by the Special Servicer or its assignee within the 30-day period following the assignment of such Purchase Option to the Special Servicer as contemplated by clause (iii) above, then such Purchase Option will automatically revert to the Majority Controlling Class Certificateholder(s); and
(vi) prior to any exercise of the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by the Special Servicer or any Affiliate thereof, subject to the following paragraph, the Trustee shall confirm and report to the applicable Master Servicer, the Certificate Administrator and the Special Servicer that the Special Servicer's determination of the Fair Value of such Mortgage Loan is consistent with or greater than what the Trustee considers to be the Fair Value of such Mortgage Loan; provided that the Special Servicer may, at its own expense, revise any such Fair Value determination that is rejected by the Trustee, it being understood and agreed that such revised Fair Value determination will likewise be subject to confirmation in accordance with this clause (vi). Notwithstanding anything contained in clause (vi) of the preceding paragraph to the contrary, if the Trustee is required to confirm or reject the Special Servicer's Fair Value determination as contemplated by such clause (vi), the Trustee may (at its option and at the expense of the Trust Fund) designate an Independent third party expert in real estate or commercial mortgage loan matters with at least 5 years' experience in valuing or investing in loans similar to the subject Specially Designated Defaulted Pooled Mortgage Loan, that has been selected with reasonable care by the Trustee to confirm that the Special Servicer's Fair Value determination as contemplated by such clause (vi) is consistent with or greater than what the Independent third party considers to be the Fair Value of such Mortgage Loan. In the event that the Trustee designates such a third party to make such determination, the Trustee shall be entitled to rely upon such third party's determination. The reasonable costs of all appraisals, inspection reports and broker opinions of value, incurred by the Trustee or any such third party pursuant to this paragraph or clause (vi) of the preceding paragraph shall be advanced by the applicable Master Servicer and shall constitute, and be reimbursable as, Servicing Advances; provided that, the Trustee shall not so engage a third party expert whose fees exceed a commercially reasonable sum as determined by the Trustee. The Special Servicer shall provide the Trustee with all information that the Special Servicer utilized in determining the Fair Value that is being confirmed. Any party entitled to do so may exercise the Purchase Option with respect to any Specially Designated Defaulted Pooled Mortgage Loan by providing to the Certificate Administrator, the Trustee, the applicable Master Servicer and the Special Servicer:
(i) written notice of its intention to purchase such Mortgage Loan at the Option Price; and
(ii) if such party is the assignee of the Special Servicer or the Majority Controlling Class Certificateholder(s), evidence of its right to exercise such Purchase Option. The actual purchase of such Specially Designated Defaulted Pooled Mortgage Loan shall occur (by delivery of cash in the amount of the applicable Option Price to the Special Servicer for deposit in the applicable Master Servicer's Collection Account) no later than ten days after the later of (i) such exercise of the Purchase Option with respect to such Mortgage Loan and (ii) if applicable, the confirmation of the Special Servicer's Fair Value determination with respect to such Mortgage Loan in accordance with clause (vi) of the first paragraph of this Section 3.18(c) and/or in accordance with the second paragraph of this Section 3.18(c). If any Person to which the Purchase Option has been assigned as provided above exercises the Purchase Option but fails to consummate the actual purchase of the applicable Specially Designated Defaulted Pooled Mortgage Loan in accordance with the preceding sentence, then the Purchase Option shall automatically thereupon be reinstated, revert to and be exercisable by the Controlling Class Representative or the Special Servicer, as applicable. Notwithstanding the Purchase Option provided for in this Section 3.18(c), the Special Servicer shall proceed in respect of any Specially Designated Defaulted Pooled Mortgage Loan in accordance with Section 3.09 and/or Section 3.20, without regard to such Purchase Option. In no event shall there be a Purchase Option hereunder with respect to a Non-Trust-Serviced Pooled Mortgage Loan. However, in the event of the exercise of a similar option under the related a Non-Trust Servicing Agreement and/or pursuant to the related Mortgage Loan Group Intercreditor Agreement, the Trustee shall sell such related Non-Trust-Serviced Pooled Mortgage Loan in accordance with such agreement.
(d) The Special Servicer shall use its reasonable efforts, consistent with the Servicing Standard, to solicit cash bids for each Administered REO Property in such manner as will be reasonably likely to realize a fair price (determined pursuant to Section 3.18(e) below) for any Administered REO Property within a customary and normal time frame for the sale of comparable properties (and, in any event, within the time period provided for by Section 3.16(a)). The Special Servicer shall accept the first (and, if multiple cash bids are received by a specified bid date, the highest) cash bid received from any Person that constitutes a fair price (determined pursuant to Section 3.18(e) below) for such Administered REO Property. If the Special Servicer reasonably believes that it will be unable to realize a fair price (determined pursuant to Section 3.18(e) below) with respect to any Administered REO Property within the time constraints imposed by Section 3.16(a), then the Special Servicer shall, consistent with the Servicing Standard, dispose of such REO Property upon such terms and conditions as it shall deem necessary and desirable to maximize the recovery thereon under the circumstances. The Special Servicer shall give the Certificate Administrator, the Trustee, the applicable Master Servicer and the Controlling Class Representative not less than five (5) Business Days' prior written notice of its intention to sell any Administered REO Property pursuant to this S
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Sources: Pooling and Servicing Agreement (Bear Stearns Commercial Mortgage Securities Inc)